1st Nov 2006 07:00
ITIS Holdings PLC01 November 2006 ITIS Holdings plc (the "Company" or "ITIS") Results for the six months ended 30th September 2006 ITIS Holdings plc, a leading road traffic information and data specialist, ispleased to announce its results for the six months ended 30th September 2006. Highlights • Turnover up 41% to £8.9m (Six months ended 30th September 2005: £6.3m); • Profit before tax up 298% to £1.8m (Six months ended 30th September 2005: £0.45m); • UK business continues to trade ahead of expectations; • Contracts renewed for RDS-TMC with the BMW Group, Ford Motor Company and TomTom; • Cash balance increased to £7.2m from £5.7m at 31st March 2006. Stuart Marks, Chief Executive of ITIS Holdings plc, commented: "We are very pleased with this excellent set of results which underline thestrength of our business strategy. The Company has continued to deliversubstantial growth which has led to our profits for the first half of thiscurrent financial year exceeding the pre-exceptional profits that we achievedduring the whole of the last year. Within our AGM statement on 20th September2006 we reported that "all areas of our UK business have traded strongly". Thishas continued to be the case and, therefore, our current expectations for fullyear profits are now slightly ahead of those we had anticipated in September. ITIS is now established as a highly profitable and leading supplier of real timetraffic information with largely fixed costs and a broad base of customers andapplications. We now have over 350,000 users of our RDS-TMC service acrosseighteen car manufacturers and seventeen aftermarket providers. The market forboth line fit and aftermarket satellite navigation systems is forecast tocontinue to grow in the UK and we expect ITIS will remain the preferred providerof information to this market. With substantial and increasing cash reserves,strong management and proven services the Board are confident that ITIS is wellpositioned to take advantage of the world wide demand for accurate trafficinformation." Financial Overview For the six months ended 30th September 2006, Group turnover increased 41% to£8.88m (2005: £6.29m). This increase in turnover came predominantly from theGroup's UK business - from traffic data sales to RDS-TMC customers; from datasales to local and central Government and other third party organisations; andfrom customers using the Group's various mobile telephone information services. The Group continued to invest heavily in its research and development centre inIsrael during the period, spending £0.46m (2005 research and developmentexpenditure: £0.41m). On a Group basis, profit before taxation increased 298% to £1.78m (2005: profitbefore taxation £0.45m). These results again demonstrate that the Group'soperational infrastructure is capable of supporting incremental business andthat we are able to control our costs effectively. Basic and diluted earnings per ordinary share were 1.8p, up 350% (2005 earningsper ordinary share: 0.4p). Cash balances at 30th September 2006 strengthened to £7.2m as against £5.7m at31st March 2006. As a sign of its confidence in the continuing growth and cash generation in thebusiness, the Board is considering the most efficient deployment of its cashreserves. We will update shareholders further at the time of release of ourpreliminary results for the year ending 31st March 2007. UK Business Review ITIS continues to derive almost all of its revenues from the UK. Our sustainedsuccess in this competitive and still developing market is proof that ITISpossesses strong management, high quality information and scaleable systems.Our focus has been on supporting our customers by becoming an integral part oftheir customer solutions rather than by competing with them by developing ourown hardware. When we announced our contract renewal with BMW for a furtherfive years on 11th September 2006, they commented "We have conducted ongoingtesting of the service and are completely satisfied that the traffic informationwhich ITIS supplies meets all of our quality criteria whilst their understandingand experience of TMC is significantly ahead of anyone else in this market." Weexpect the UK market to continue growing and as we have consistentlydemonstrated, ITIS is ideally placed to take advantage of this. RDS-TMC (Radio Data Service - Traffic Message Channel) ITIS continues to dominate the delivery of real time traffic information tofactory fitted navigation systems, personal navigation devices and mobilephones. Our service is established with eighteen car manufacturers; BMW,DaimlerChrysler, Ferrari, Ford, Jaguar, Land Rover, Lexus, MINI, Mitsubishi,Nissan, Porsche, Renault, Rolls Royce, Saab, Subaru, Toyota, Vauxhall (GM) andVolvo. In the period under review we announced contract renewals with BMW, theFord Motor Company and TomTom. BMW have been a customer since 2002 and this newcontract will see ITIS provide data until 2012. Aftermarket and portable devicecustomers include AA Navigator, Bose, Clarion, Co Pilot, Harman Becker,Navicore, Naviflash, Navman, Panasonic, Pioneer, Siemens VDO, Sony Europe,TomTom, ViaMichelin and Way Finder. The size and scope of our customer base isthe proof that ITIS provides the highest quality traffic information and hasunparalleled knowledge and experience of the Traffic Message Channel. Currently ITIS supports over 350,000 users of TMC and this is number increasingrapidly. We expect that the penetration of in-vehicle satellite navigationsystems in the UK will continue to rise as only 8% of new cars sold havenavigation fitted as standard or as an option compared to 24% in Germany. Thepersonal navigation device market is extremely competitive and is moving towardsa model where traffic information is bundled into the price of the unit ratherthan a monthly subscription. We expect to see our revenues grow in this marketas this strategy becomes widely adopted by all the leading manufacturers. Other Services We announced on 23rd October 2006 that we had entered into a partnership withClear Channel to operate a new cross network short dial traffic service called "The Hound" which is being promoted extensively on Clear Channel media sitesthroughout the country. ITIS has established short dial traffic informationservices with the AA, Vodafone, T-Mobile and various other networks. Throughall of these channels, customers express a high degree of satisfaction with theservices and once trialled, ongoing regular usage is likely. It is expectedthat the partnership with Clear Channel will be an effective means of generatinginitial customer trials. We announced on 26th October 2006 that the Department for Transport had extendedits contract with ITIS to supply historic traffic information until February2008. As part of this contract, all local authorities receive limited historicdata from ITIS and we have enjoyed some success in selling real time data andmore detailed historic information to a small number of them. Sales in thisarea take time because our data is relatively new and prospective customers needto undertake rigorous evaluation. In the medium term, as the Government seeksto understand better how congestion can be managed and continues to work moreclosely with the private sector, we are confident that this will become animportant revenue stream. International Business Review Internationally, we use both our Floating Vehicle Data and our Cellular FloatingVehicle Data (CFVD) technologies. CFVD works on a combination of our highlydeveloped algorithms and specific information provided by mobile networks.Cooperation from the networks and their ability to provide us with the data werequire can vary, not only from country to country but from network to network.Given the critical nature of the networks' involvement, we look for marketswhere we can develop a strong relationship with our chosen network partner,combined with private or public sector revenues. We have a significant R&D operation based in Israel focussed on furtherdeveloping our software and algorithms and a dedicated team in the UK currentlysupporting existing deployments. The size and experience of the team is suchthat additional business can be accommodated within the existing infrastructure. The Board recognises that progress in the US has been slower than we would haveliked following the encouraging start with the contract wins with the Marylandand Missouri Departments of Transport. However, our cost exposure in the USmarket is minimal due to our decision to partner with Delcan - a US basedorganisation which already has significant resources committed to serving theDOTs. We remain focussed on fulfilling our obligations to deliver traffic informationin the State of Missouri and continue to believe that the global market fortraffic information is vast and that ITIS will be able to compete effectively. We have proven with trials in the US, Belgium, Scotland and Israel that our CFVDtechnology is robust, highly accurate and scalable. We also have the necessaryexperience and resources to handle complex and large deployments. At our AGM on20th September 2006, we announced that we had been selected by one of theworld's largest mobile operators to demonstrate how we can provide trafficinformation in a large European metropolitan area. We are encouraged to see amajor network taking a lead in this technology. Our business model for international markets will be determined by the scope ofwork required, strength of local partners and geography. The Groups licensingmodel for entering into new markets allows for controlled expansion and we havealready proven this model in Australia. We are confident that such new marketscan be profitable for ITIS in the short to medium term. NavTrak NavTrak continued to grow its subscriber base predominantly through ourprinciple automotive customers - Bentley Motors, Ferrari and Maserati. Wecontinue to develop business outside the UK by partnering with organisationsthat can support the NavTrak brand and we currently have such relationships in32 countries. Consistency and quality of service are very important to theautomotive industry and therefore the ability for a manufacturer to make onevehicle tracking product standard throughout the world is an attractiveproposition. Current Trading & Prospects In recent years, ITIS has successfully delivered on its strategy to focus ontraffic information technologies through a largely fixed cost base and this hasturned the company into a respected and leading information provider. ITIS is now entering an exciting phase of its development. The UK marketcontinues to experience strong growth and the Board believes that the potentialexists to add to this growth outside the UK. These strong results combined withour excellent management, growing cash and proven technology, give the Boardgood reason to be confident about the Company's future. Contact: Stuart Marks, Chief Executive ITIS Holdings plc - 07768 454700 Ginny Pulbrook, Director Citigate Dewe Rogerson - 0207 282 2945 Consolidated profit and loss account Note Six months to Six months to Year ended 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited Restated Restated (Note 1) (Note 1) £ £ £Group turnover 8 8,884,515 6,289,853 14,416,113Cost of sales (3,672,885) (3,044,266) (6,982,244) __________ __________ __________Gross profit 5,211,630 3,245,587 7,433,869 Operating costs (3,544,723) (2,870,488) (5,630,145) __________ __________ __________Operating profit 1,666,907 375,099 1,803,724Operating profit before exceptional item 1,666,907 375,099 1,472,456Exceptional item 3 - - 331,268Operating profit 1,666,907 375,099 1,803,724Group interest receivable and similar income 116,433 73,214 158,723Group interest payable and similar charges - (729) (2,123) __________ __________ __________Profit on ordinary activities before taxation 8 1,783,340 447,584 1,960,324Tax on profit on ordinary activities - (6,528) 93,350 __________ __________ __________Profit on ordinary activities after taxation 1,783,340 441,056 2,053,674Minority interests (4,036) (4,578) (5,396) __________ __________ __________Profit for the financial period 1,779,304 436,478 2,048,278 __________ __________ __________Basic and diluted earnings per ordinary share (p) 4 1.8 0.4 2.1 __________ __________ __________ Consolidated statement of total recognised gains and losses Note Six months to Six months to Year ended 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited Restated Restated (Note 1) (Note 1) £ £ £Profit for the financial period 1,779,304 436,478 2,048,278Currency translation difference 2,078 1,893 1,858Prior period adjustment - adoption of FRS20 Share Based 1 26,128 - -Payments __________ __________ __________Total recognised gains relating to the period 1,807,510 438,371 2,050,136 __________ __________ __________ Consolidated Balance Sheet Note 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited Restated Restated (Note 1) (Note 1) £ £ £Fixed assetsIntangible assets 502,515 733,109 617,812Tangible assets 925,874 515,408 659,746 __________ __________ __________ 1,428,389 1,248,517 1,277,558 __________ __________ __________Current assetsStocks 283,442 286,493 374,998Debtors- due within one year 4,982,087 3,189,698 4,300,432- due after more than one year 27,500 55,000 40,000Cash at bank and in hand 7,169,519 4,718,100 5,697,498 __________ __________ __________ 12,462,548 8,249,291 10,412,928Creditors: Amounts falling due within one year (4,924,240) (3,605,133) (4,434,618) __________ __________ __________Net current assets 7,538,308 4,644,158 5,978,310 __________ __________ __________Total assets less current liabilities 8,966,697 5,892,675 7,255,868Creditors: Amounts falling due after more than one year - accruals and deferred income (516,732) (811,536) (601,991)Provisions for liabilities and charges (36,290) (109,766) (54,459) __________ __________ __________Net assets 8 8,413,675 4,971,373 6,599,418 __________ __________ __________ Capital and reservesCalled-up share capital 5,230,270 5,230,270 5,230,270Share premium account 38,070,740 38,070,740 38,070,740Profit and loss account (34,955,537) (38,348,684) (36,736,919)Other reserve 54,967 10,666 26,128 __________ __________ __________Equity shareholders' funds 8,400,440 4,962,992 6,590,219 7Minority Interests - equity 13,235 8,381 9,199 __________ __________ __________Total capital employed - equity 8,413,675 4,971,373 6,599,418 __________ __________ __________ Consolidated Cash Flow Statement Note Six months to Six months to Year ended 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited Restated Restated (Note 1) (Note 1) £ £ £Net cash inflow from operating activities 5 1,792,014 505,789 1,765,284 __________ __________ __________Returns on investments and servicing of financeInterest element of finance lease rental payments - (729) (2,123)Interest received 116,433 73,214 158,723 __________ __________ __________Net cash inflow from returns on investments and servicing of 116,433 72,485 156,600finance __________ __________ __________TaxationForeign tax paid - - (20,300)Research and development tax credit 20,924 128,613 127,124 __________ __________ __________Net cash inflow from taxation 20,924 128,613 106,824 __________ __________ __________Capital expenditure and financial investmentPurchase of tangible fixed assets (459,428) (161,523) (489,566) __________ __________ __________Net cash outflow from capital expenditure (459,428) (161,523) (489,566) __________ __________ __________Cash inflow before financing 1,469,943 545,364 1,539,142 __________ __________ __________FinancingIssue of share capital - 771,847 771,847Capital element of finance lease rental payments - (14,345) (28,690) __________ __________ __________Net cash inflow from financing - 757,502 743,157 __________ __________ __________Increase in cash 6 1,469,943 1,302,866 2,282,299 __________ __________ __________ Notes (unaudited) 1. Accounting policies The interim accounts have been prepared using accounting policies stated in theCompany's Report and Accounts for the year ended 31 March 2006 and have beenneither audited nor reviewed. FRS 20 Share Based Payments was adopted in the period. FRS 20 requires the Groupto recognise a charge in the Profit and Loss account and a credit in equity toreflect the fair value of outstanding share options issued to employees. Sharecompensation charges have been recognised in the period and comparative periodshave been restated to include a similar charge (see note 7). FRS 25 Financial Instruments: Disclosure and Presentation was adopted in theprior year. This has resulted in a change in the presentation of the Group'sdeferred shares. These are now classified as equity rather than non-equity. 2. Preparation of the interim financial information The summarised results for the six months to 30 September 2006 and thecomparative results for the half year to 30 September 2005 are non-statutoryaccounts within the meaning of Section 240 of the Companies Act 1985 and havenot been reported upon by the auditors under Section 235 of the Companies Act1985. The comparative figures for the year ended 31 March 2006 are an abridged versionof the Company's full accounts and, together with other financial informationcontained in these interim results, do not constitute statutory accounts of ITISHoldings PLC within the meaning of section 240 of the Companies Act 1985. Thestatutory accounts for the year ended 31 March 2006 have been delivered to theRegistrar of Companies. The report of the auditors was not qualified and did notcontain a statement under Sections 237 (2) and (3) of the Companies Act 1985. 3. Turnover Included within turnover for the year-ended 31 March 2006 is an amount of£354,297. This amount, net of associated expenses of £23,029, has been shown asan exceptional item of £331,268 on the face of the profit and loss account as itrelates to income from one of the Group's customers that related to the 2005financial year. This was not declared to the Group until after publication ofthe 2005 financial statements. 4. Basic and diluted earnings per ordinary share Six months to Six months to Year ended 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited Restated Restated £ £ £Profit for the financial period 1,779,304 436,478 2,048,278 __________ __________ __________Weighted average number of ordinary shares in issue 100,620,099 97,446,256 100,120,420 __________ __________ __________Basic and diluted earnings per ordinary share (p) 1.8 0.4 2.1 __________ __________ __________ 5. Reconciliation of operating profit to cash inflow from operating activities Six months to Six months to Year ended 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited Restated Restated (Note 1) (Note 1) £ £ £Operating profit 1,666,907 375,099 1,803,724Depreciation and amortisation of licences 308,597 254,699 552,934Decrease (increase) in stocks 91,556 67,058 (21,447)Increase in debtors (690,079) (339,894) (1,322,584)Increase in creditors 404,363 223,888 867,563Decrease in provisions (18,169) (85,727) (141,034)Share compensation charge 28,839 10,666 26,128 __________ __________ __________Net cash inflow from operating activities 1,792,014 505,789 1,765,284 __________ __________ __________ 6. Reconciliation of net cash flow to movement in net funds Six months to Six months to Year ended 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited £ £ £Increase in cash in the period 1,469,943 1,302,866 2,282,299Cash inflow from decrease in lease funding - 14,345 28,690 __________ __________ __________Change in net funds resulting from cash flows 1,469,943 1,317,211 2,310,989Translation differences 2,078 1,893 1,858 __________ __________ __________Change in net funds in the period 1,472,021 1,319,104 2,312,847Net funds brought forward 5,697,498 3,384,651 3,384,651 __________ __________ __________Net funds carried forward 7,169,519 4,703,755 5,697,498 __________ __________ __________ 7. Reconciliation of movements in Group shareholders' funds Six months to Six months to Year ended 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited Restated Restated (Note 1) (Note 1) £ £ £Profit for the financial period 1,779,304 436,478 2,048,278Other recognised gains and losses relating to the period 2,078 1,893 1,858Issue of share capital - 771,847 771,847Share compensation charge 28,839 10,666 26,128 __________ __________ __________Net increase in Group shareholders' funds 1,810,221 1,220,884 2,848,111Opening Group shareholders' funds 6,590,219 3,742,108 3,742,108 __________ __________ __________Closing Group shareholders' funds 8,400,440 4,962,992 6,590,219 __________ __________ __________ 8. Segmental analysis The Directors are of the opinion that the Group operates in a single segment,that of the provision of telematic products and services. Hence all turnover,profits and net assets relate to this class of business. Turnover by origin Turnover by destination Six months to Six months Six months to Six months to Year ended to Year ended 30 September 30 September 31 March 30 September 30 September 31 March 2006 2005 2006 2006 2005 2006 Unaudited Unaudited Audited Unaudited Unaudited Audited £ £ £ £ £ £ United Kingdom 8,761,263 6,108,977 14,216,022 8,713,317 6,103,852 14,187,833Mainland Europe - - - 47,946 5,125 28,189U.S.A. 28,252 180,876 200,091 28,252 180,876 200,091Other 95,000 - - 95,000 - - _________ _________ _________ _________ _________ _________Total 8,884,515 6,289,853 14,416,113 8,884,515 6,289,853 14,416,113 _________ _________ _________ _________ _________ _________ Profit (loss) before taxation Net assets Six months to Six months Year ended Six months to Six months Year ended to to 30 September 30 September 31 March 30 September 30 September 31 March 2006 2005 2006 2006 2005 2006 Unaudited Unaudited Audited Unaudited Unaudited Audited Restated Restated Restated Restated (Note 1) (Note 1) (Note 1) (Note 1) £ £ £ £ £ £United Kingdom 2,434,047 725,250 2,889,018 8,360,537 4,960,939 6,552,724Mainland Europe (121,326) (82,813) (123,796) - - -U.S.A. (167,250) 104,668 66,318 - - -Other (299,521) (871,216) 53,138 10,434 46,694 (362,131) _________ _________ _________ _________ _________ _________Total 1,783,340 447,584 1,960,324 8,413,675 4,971,373 6,599,418 _________ _________ _________ _________ _________ _________ 9. Interim statement A copy of this announcement will be circulated to all registered shareholders ofthe Company and copies will be available for members of the public uponapplication to the Registered Office at Station House, Stamford New Road,Altrincham, Cheshire, WA14 1EP. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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