8th Jun 2006 07:00
ITIS Holdings PLC08 June 2006 ITIS Holdings plc ("ITIS" or the "Company") Preliminary Results for the year ended 31st March 2006 ITIS Holdings plc, a leading road traffic information and data specialist ispleased to announce its preliminary results for the year ended 31st March 2006. HIGHLIGHTS • Full year profit before tax £1.66m (2005: loss of £1.35m) excluding an exceptional item. Profit before taxation including an exceptional profit of £0.33m was £1.99m (2005: loss of £1.35m). • Turnover up 39% to £14.10m (2005: £10.16m) excluding an exceptional item. The turnover including the exceptional item was £14.40m (2005: £10.16m) • Year end cash balance remains strong at £5.70m (2005: £3.41m) • UK business continues to experience strong growth and is highly profitable • Interest remains high in Cellular Floating Vehicle Data ("CFVD") from the US and other countries • First revenues from Missouri CFVD contract now expected to commence during the latter part of the current financial year Stuart Marks, Chief Executive of ITIS commented: "We are delighted with theseresults and, in particular, to announce our first full year of profitability.Our business in the UK is particularly strong and, through a combination of ourlargely fixed cost base and a growing number of customers, is becomingsubstantially profitable. Whilst the timing of new contracts is difficult topredict, we remain encouraged about our overseas expansion, particularly in theUS, and believe that demand for our services will only increase as road trafficcongestion worsens around the world." FINANCIAL OVERVIEW For the year ended 31st March 2006, pre-exceptional turnover increased by 39% to£14.06m (2005: £10.16m). Exceptional turnover of £354,000 (2005: nil) representsincome from UK customers relating to the year ended 31st March 2005 that was notdeclared to the Group until after the publication of the 2005 financialstatements. The costs related to this exceptional turnover were £23,000 and theGroup therefore recorded an exceptional profit in the year ended 31st March 2006of £331,000 (2005: nil). Turnover for the year ended 31st March 2006 came predominantly from the Group'sUK business - from traffic data sales to RDS-TMC customers; from data sales tolocal and central Government and other third party organisations; and fromcustomers using the Group's various mobile telephone information services. With the majority of its cost base fixed, the UK business made a pre-exceptionalprofit before taxation of £2.58m (2005: loss £0.76m) and a post exceptionalprofit before taxation of £2.92m (2005: loss £0.76m). These results againdemonstrate that the Group's operational infrastructure is capable of supportingincremental business without substantial increases to its cost base. The Group continued to invest heavily in its research and development centre inIsrael during the year, spending £871,000 (2005: £548,000). On a Group basis, pre-exceptional profit before taxation was £1.65m (2005: lossbefore taxation £1.35m), rising to £1.99m (2005: loss of £1.35m) on a postexceptional basis. Basic and diluted earnings per share were 2.1p (2005: lossper ordinary share of 1.3p). The year-end cash balance remains strong at £5.70m (2005: £3.41m). UK BUSINESS REVIEW Since ITIS shares were admitted to trading on the AIM Market in 2000, theCompany has become one of the UK's leading providers of traffic information andhas experienced a period of substantial growth leading to its first full year ofprofitability in 2006. The turnaround in our UK business from a loss of £0.76min the year ended 31st March 2005 to a pre tax profit of £2.58m for the yearunder review demonstrates the robustness of our business model, the quality ofour service and the advantages of our high operational gearing. Our traffic business began in early 2002 with the launch of our commercialRDS-TMC service in the UK initially supported by BMW and Toyota. We have sincedeveloped TMC into a business which now provides traffic information toseventeen car manufacturers and to seventeen personal navigation devices andaftermarket systems. We believe there are now over 250,000 users of our trafficinformation through these channels and we expect continued growth. Floating Vehicle Data ("FVD"), which covers the entire UK road network, hasproven itself to be of very high quality. This unique data set is at the heartof our real time and historic information and is presented in various formatsdependant on the requirements of the end user. FVD predominantly generates roadspeed and flow information and is supplemented with a rich incident data feedprovided to us, under an exclusive agreement, by Trafficlink, the UK's leadingprovider of incident based traffic information. Under the terms of our partnership with the AA, we support both web based andmobile phone services under our exclusive use of the AA Roadwatch brand. Mobilephone users can access our real time traffic information across all the majornetworks using unique short dial numbers. During the year under review, we haveadded greater functionality such as places of interest and specific incidentreports to enrich the quality of the service. We continue to focus NavTrak, our stolen vehicle tracking business, on the verytop end of the prestige car market and now factory install our system forBentley, Ferrari and Maserati. This has enabled us to concentrate on qualityengineering and customer service at a price point which sustains profitability. We expect to continue to win new business in the UK and to renew existingcontracts as they fall due. OVERSEAS BUSINESS REVIEW Our UK customer base and the services we provide to them act as valuablereference points for our overseas development, especially in countries wherecommercial traffic information services are only now beginning to be launched.Our competitive position is materially enhanced by our ability to offer provenexperience and applications to these new markets. In many overseas markets, and especially in the US, there has been a marked rollout of on board navigation systems in the last eighteen months helped greatly bythe falling costs of hardware. Of greater interest to ITIS is the growth in thenumber of GPS equipped mobile phones in the US to support the E-911 legislationthat requires a mobile be locatable when an emergency call is placed.Penetration with some networks is now over 80%. The networks are moving quicklyto provide other Location Based Services of which navigation and trafficconsistently feature in the top three services most required. We believe thatworking directly with the mobile phone networks to produce traffic informationfrom their raw data will enhance their willingness to supply us and will createa new revenue stream for both ITIS and the networks. Our partnership with Delcan.NET in the US is proving very successful. Oursimilar cultures allowed for an effective handling of our first projects inBaltimore, Maryland and the current state-wide roll out of CFVD in Missouri. Bypartnering with Delcan we have been able to fully explore and develop ourbusiness in the US along side an organisation which already has successfulrelationships with many Government Departments Of Transport's ("DOT's"). Ourfirst goal is the successful delivery of existing projects in order to provide 'proof of concept' and ensure that we achieve a reputation for delivery andquality. We believe that this approach will enhance negotiations with otherDOT's. We have stated previously that the quality of our CFVD service and our roll outplans in the US are dependent upon support from mobile network operators andensuring a reliable supply of data from them. In this regard, there have beensome delays on the Missouri project outside of our control. Initial revenuesfrom this contract are now not expected until the latter part of the currentfinancial year. In the US our agreements with mobile network operators are likely to include afixed annual payment to ensure the delivery of data to us in a market readyformat. As a consequence, early stage costs of some US projects, includingMissouri will be proportionally higher. We remain optimistic about opportunities in Europe and are involved in a numberof advanced negotiations for the provision of traffic information. We are verypleased with the quality of data now being provided in Antwerp, Belgium whichhas become an important reference site for us. However, as we are predominantlyfocussing on Government agencies and large mobile operators, the exact timing ofwhen overseas contracts will be awarded is difficult to predict precisely. Our licensee in Australia, Traffic Intelligence Pty is making excellent progressand is already working with a major mobile operator. We expect our firstrevenues from this region in the current year. Our office in Israel is now exclusively managing the Group's R&D effort. Wehave a very bright and able team there focused on ensuring that we retain aleading position with our traffic technology. CURRENT TRADING & PROSPECTS The Board believes that ITIS has the ability to become a world leader in trafficinformation services. Revenues and profits from the UK business are showing consistent strong growthand, whilst we are still in the very early stages of developing our overseasbusiness, our performance in the UK is an excellent indicator of what we areable to achieve once we have established our presence in a market. The current financial year has started well and the Board is confident that ITISwill maintain its exciting high growth. ITIS Holdings plcPreliminary announcement of results for the year ended 31 March 2006 Consolidated profit and loss account 2006 2005 £ £Group turnover 14,416,113 10,159,268Cost of sales (6,982,244) (6,667,524) ________________ ________________Gross profit 7,433,869 3,491,744Distribution costs (106,179) (122,948)Administrative expenses (5,497,838) (4,890,305) ________________ ________________Operating profit (loss) 1,829,852 (1,521,509)Operating profit (loss) before exceptional item 1,498,584 (1,521,509)Exceptional item 331,268 -Operating profit (loss) 1,829,852 (1,521,509)Interest receivable and similar income 158,723 176,943Interest payable and similar charges (2,123) (1,414) ________________ ________________Profit (loss) on ordinary activities before taxation 1,986,452 (1,345,980)Tax on profit (loss) on ordinary activities 93,350 136,417 ________________ ________________Profit (loss) on ordinary activities after taxation 2,079,802 (1,209,563)Minority interests (5,396) (1,495) _______________ _______________Profit (loss) for the financial year 2,074,406 (1,211,058) _________ _________ p pBasic and diluted earnings (loss) per ordinary share 2.1 (1.3) _________ _________All activity has arisen from continuing operations. Consolidated statement of total recognised gains and losses 2006 2005 £ £Profit (loss) for the financial year 2,074,406 (1,211,058)Currency translation difference 1,858 (2,652) _______________ _______________Total recognised gains and losses relating to the year 2,076,264 (1,213,710) _________ _________ Consolidated balance sheet at 31 March 2006 2006 2005 £ £Fixed assetsIntangible assets 617,812 848,407Tangible assets 659,746 493,286 ________________ ________________ 1,277,558 1,341,693 ________________ ________________Current assetsStocks 374,998 353,551Debtors- due within one year 4,300,432 2,963,417- due after more than one year 40,000 70,000Cash at bank and in hand 5,697,498 3,413,341 ________________ ________________ 10,412,928 6,800,309Creditors: Amounts falling due within one year (4,434,618) (3,797,421) ________________ ________________Net current assets 5,978,310 3,002,888 ________________ ________________Total assets less current liabilities 7,255,868 4,344,581Creditors: Amounts falling due after more than one year (601,991) (403,177)Provisions for liabilities and charges (54,459) (195,493) ________________ ________________Net assets 6,599,418 3,745,911 _________ _________Capital and reservesCalled-up share capital 5,230,270 5,186,286Share premium account 38,070,740 37,342,877Profit and loss account (36,710,791) (38,787,055) ________________ ________________Shareholders' funds 6,590,219 3,742,108Minority interests - equity 9,199 3,803 ________________ ________________Total capital employed - equity 6,599,418 3,745,911 _________ _________ Consolidated cash flow statement for the year ended 31 March 2006 Notes 2006 2005 £ £Net cash inflow (outflow) from operating activities 2 1,765,284 (1,648,654) ________________ ________________Returns on investments and servicing of financeInterest element of finance lease rental payments (2,123) (1,414)Interest received 158,723 176,943 ________________ ________________Net cash inflow from returns on investments and servicing of finance 156,600 175,529 ________________ ________________TaxationForeign tax paid (20,300) (2,579)Research and development taxation credit 127,124 78,137 ________________ ________________Net cash inflow from taxation 106,824 75,558 ________________ ________________Capital expenditure and financial investmentPurchase of tangible fixed assets (489,566) (296,847)Sale of tangible fixed assets - 9,200Purchase of intangible fixed assets - (816,170) ________________ ________________Net cash outflow from capital expenditure (489,566) (1,103,817) ________________ ________________Cash inflow (outflow) before financing 1,539,142 (2,501,384) ________________ ________________FinancingProceeds on issue of shares 771,847 -Capital element of finance lease rental payments (28,690) (128,691) ________________ ________________Net cash inflow (outflow) from financing 743,157 (128,691) ________________ ________________Increase (decrease) in cash in the year 3 2,282,299 (2,630,075) _________ _________ Reconciliation of movements in group shareholders' funds for the year ended 31 March 2006 2006 2005 £ £Profit (loss) for the financial year 2,074,406 (1,211,058)Other recognised gains and losses relating to the year 1,858 (2,652)Proceeds on issue of shares 771,847 - ________________ ________________Net addition to (reduction in) group shareholders' 2,848,111 (1,213,710)fundsOpening group shareholders' funds 3,742,108 4,955,818 ________________ ________________Closing group shareholders' funds 6,590,219 3,742,108 _________ _________ Notes 1. Basis of Preparation The financial information set out in this preliminary announcement does not constitute the Group's statutory accountsfor the years ended 31 March 2005 or 2006, but is derived from those accounts. Statutory accounts for the year ended 31March 2005 have been delivered to the Registrar of Companies. The auditors have reported on the accounts for the years ended 31 March 2006 and 2005: their reports were unqualifiedand did not contain a statement under section 273(2) or (3) of the Companies Act 1985. The financial information set out in this preliminary announcement has been prepared on the basis of the accountingpolicies as stated in the accounts for the year ended 31 March 2005. A copy of the annual report and accounts will be circulated to all shareholders of the company shortly and copies willalso be available for members of the public upon application to the registered office at Fifth Floor, Station House,Stamford New Road, Altrincham, WA14 1EP and on the website www.itisholdings.com. 2. Reconciliation of operating profit (loss) to net cash inflow (outflow) from operating activities 2006 2005 £ £Operating profit (loss) 1,829,852 (1,521,509)Depreciation and amortisation of licenses 552,934 395,419Increase in stocks (21,447) (196,637)(Increase) decrease in debtors (1,322,584) 267,399Increase (decrease) in creditors 867,563 (463,545)Decrease in provisions (141,034) (132,836)Loss on disposal of fixed assets - 3,055 ________________ ________________Net cash outflow from operating activities 1,765,284 (1,648,654) _________ _________ 3. Reconciliation of net cash flow to movement in net funds 2006 2005 £ £Increase (decrease) in cash in the year 2,282,299 (2,630,075)Cash outflow from decrease in lease financing 28,690 128,691 ________________ ________________Change in net funds resulting from cash flows 2,310,989 (2,501,384)Other non cash changes - 242,619Translation differences 1,858 (2,652) ________________ ________________Change in net funds in the year 2,312,847 (2,261,417)Net funds brought forward 3,384,651 5,646,068 ________________ ________________Net funds carried forward 5,697,498 3,384,651 _________ _________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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