Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
Hi Muzzletoff,
Hope you are keeping safe in these difficult times.
Not expecting much this financial year. Outdoor events and data collection team could suffer a £6-8m hit to revenues this financial year. Hope Tracsis can protect as many staff positions as possible. Interim/final dividends likely to be cancelled.
Tracsis will secure many renewals/new contracts but benefits will come through late this calendar year and beyond. RCM Team and Ontrac (Rail safety products) serve Network rail and so sheltered to some extent but they also rely on production facilities being maintained to complete contracts. Vivacity and Compass are bright spots for the future.
Very challenging 6 months ahead for everyone. Protecting health and jobs must come first.
Stay safe.
I hold Tracsis shares. Do your own research etc, etc
Hi Muzzletoff,
Interim results due tomorrow.
Missed those reports but here are some interesting links from the Vivacity Labs twitter page:
https://www.linkedin.com/pulse/social-distancing-data-from-oxford-peter-mildon/
https://vivacitylabs.com/talking-heads-highways-uk-using-ai-to-monitor-the-impact-of-covid-19-on-our-highways/
http://sut4.co.uk/l/c.php?c=40550&ct=426864
I hold Tracsis shares. Do your own research, etc, etc
Hefty, hefty price paid for IBlocks but it is high margin market leader with a highly strategic role in the UK rail industry. I hope they are working on proposals to produce cross TOC ticketing systems. I suspect a large wad of the extra £3.4 is cash in the net current assets. Timing?
3 weeks ago, I was not overly concerned about a hit (say £2-3m) to the outdoor market this summer as the rest of the group appear very busy. But it could get worst. I do sympathise with event day staff who will be hit hard by the loss of income. Revenues/profits could easily be flat or down for the year. The slowdown in normal business activity will impact service delivery to clients. Can software upgrades/contracts delivery be cosseted in this challenging environment?
Will TOCs or other clients defer contract announcements if their revenues are hit over the next 6-12 months? Work with network rail and TFL are less of issue as they have the funding. The CEO Interviews at the time of the interims will need to reassure investors about the short to medium term prospects. Longer term, the business prospects are healthy but this could be a challenging year.
I hold Tracsis. Do your own research, etc, etc.
Hi Muzzletoff,
Apologies for the delay.
Re trading update & Covid; plenty of food for thought.
Is this the new CEO tweaking historically conservative statements? Very up upbeat statement boarding on the bullish. 3 weeks early, why? A 30% increase in interim revenues “was in line with expectations?" Gulp.
Will the house broker upgrade the forecast for the year? Covid could force them to hold fire. No acquisitions to date could reflect confidence in meeting this year’s targets.
Strong hints about acquisitions in the Rail technology services. Companies serving Network rail would be highly complementary have strong long term prospects. NR is at the start of a funding cycle and is coming under increasing pressure to improve infrastructure performance.
A little early to say but Covid could affect the outdoor event market. Government spin their position on a six pence. Marquee events like the Cheltenham festival, Glastonbury and Silverstone could be at risk. Tracsis serve a large number of farming/country shows, music festivals and weekly race meetings up and down the country. This year, strong revenue growth across the group could cope with a hit to revenues in the outdoor team.
Last year the focus was software development/upgrade(acquisition of Bellvedi), this year it’s project implementation. The strong hint about tenders points to potential contract wins. Tracsis have been recruiting project managers. The recent highs over £8.20 may reduce downside. Don’t forget, the share price was £7.00 at Christmas.
Vivacity Labs are gaining traction with contracts for Highways England, TFL, and received Government funding for programmes across the country.
Interims due the first week in April. Look out for interviews with the CEO on the day for an update on the outdoor market. 3 weeks is a long time in this covid environment.
I hold Tracsis shares. Do your own research, etc. etc.
Hi Muzzletoff,
Agreed, I did not see the move to over £7 in this recent rally.
Good results given the challenging environment for the Train Operating Companies during 2019. Good to see the positive news from the RCM division.
The possibility of an election and the delayed publication of the Williams review (due early next year) were major clouds of uncertainty throughout the year. Further delays to the Williams review and the new Government’s ambition to direct long overdue additional transport investment to the north could prolong the uncertainty for the TOCs.
Worth noting, Tracsis have a strong track record of adapting to the shifting environment for the TOCs and this year’s 20% plus increase in group turnover was impressive. I hope restoration of margins and EPS growth are higher objectives for this financial year. Not easy given the uncertainties ahead but I’ll be watching the news flow over the coming months. Any acquisitions early in the New Year could be a strong hint about shorter term prospects.
Do your own research, etc, etc. All the above are my opinion only. I hold Tracsis shares.
Hi Muzzletoff,
Well spotted.
I thought it would be some time (at least 12 months) before JM sold any shares. However, JM is driven and probably itching to get back into a more meaningful role. It will be interesting to see where JM surfaces and one to follow in the future.
Nutshell is a start up who offer code free apps (no software or technical knowledge required). Nutshell work closely with Ontrac (a division of Tracsis) who produce safety apps/digital products for rail worker safety.
Vivacity Labs develop machine learning and data analytics software and are a key strategic partner for Tracsis. I think Tracsis use VL software in many products. Tracsis have launched a new product that classifies movement into different categories i.e. pedestrian, bus, cycle, HGV, etc.
https://tracsistraffic.com/video-path-tracing-launch/
The analytics software in the new launch is similar to or software provided by VL. Again, huge opportunities to market to any location with large volumes of pedestrian or vehicle movement (venues, transport providers, shopping centres, etc).
VL is the much more significant strategic partner and I suspect the investment secures access to leading analytics software. If Tracsis are using VL software in these new products then revenues and profits should improve for both groups. Nutshell is a much smaller investment related to Ontrac and has broad market appeal but has quite not taken off yet outside the rail sector.
Again, well spotted. I was not aware of their profitability or JM’s involvement.
Most tech start-ups are loss making until they get their products out into the market place. VL has been expanding and secured project funding earlier in the summer to provide analytics software across the Highways England CCTV network. This looks promising.
https://www.costain.com/news/news-releases/costain-wins-innovation-competition-to-help-highways-england-accelerate-connected-digital-roads-infrastructure/
The final accounts due in November should shed more light on both investments and their valuations.
Thanks your post raised many useful points.
I hold Tracsis shares. Do your own research, etc, etc.
Solid results. Second half revenues restored and boosted by £7m compared to the previous year(£27.9m v £20.7m). January acquisitions lifted top line figures but margin improvements should materialise over the next 12-18 months. Huge scope for synergies and margin improvement between Sep events and CTM. The FD has a history of implementing healthy margin improvements 12 months after acquisitions join the group.
Office move, recruitment and technology investments reduced EBITDA by approx. £650K (noted in interims and probably increased for the full year) but we’ll have to wait for the annual statement to get more detailed commentary across the group.
The delayed decisions on franchise awards over the last 12 months must have impacted the Train Operating Companies investment decisions. I guess Tracsis have leaned this year towards product upgrades and creating new software products whilst still delivering against market expectations. The top line benefits of this investment should flow through over the next 18 months.
Recent franchise awards and extensions are good news but broader national policy guidance from the Williams review is urgently awaited. Policy guidance is long overdue for the TOCs.
Debt free and cash generation from this group is remarkable.
The UK customer referred to under ‘control period 5’ is Network Rail or one of their key suppliers. Could be good news concerning long standing trials with network rail.
With an impressive track record, Tracsis churn out solid results year after year and are well positioned for further growth. Solid long term hold.
I hold Tracsis shares. Do your own research etc, etc.
Hi Muzzletoff,
Thanks for the update.
JM’s position is certainly unusual and we’ll have to see how things pan out over the next 6-12 months and beyond. Lots to keep him busy on the acquisitions front.
Sep events managing the traffic/parking for the F1 race at Silverstone over the weekend. One of the largest events in the calendar.
The year end trading update is due in late August.
I hold Tracsis shares. Do your own research, etc, etc
Hi Muzzletoff,
Glastonbury weekend. The summer outdoor events season is in full swing. The Tracsis teams very busy at Glastonbury, music festivals, country shows and race courses up and down the country. This should lead to a strong final quarter and restore key financials for the year end. IT investments and the new contract noted in the interims should also add revenues to the second half.
More work with Transport for London (bus networks and traffic analytics) which looks promising . Also, Tracsis are working with partners Vivacity to install sensors in a pilot project monitoring cyclist’s movements in Helsinki.
Continued delays at the DFT around franchise awards/renewals must have an impact on train operators and their investment plans. I hope the year end update includes some comment on how this is affecting the train operators (but I doubt there will be).
On Friday, Tracsis won a ‘Passenger experience award’(Railway Industry Innovation Awards) for their delay repay product and they recently launched new software to the train operators aimed at improving delay payments to passengers and reducing payment fraud. Tracsis has contracts with Transport for Wales and Greater Anglia so large opportunity with train operators (approx. 20). TTCS are extending their product range from individual passenger claims to software for train operators. This is an important strategic shift to securing larger contracts with high recurring revenues.
I’ll have a look at Trainline and their business model. I agree acquisitions at an attractive valuation area a challenge but Tracsis have a decent track record on this front. The Bellvedi acquisition adds significant industry software experience to the group.
Little news from compass but I’ll reserve judgement until I’ve done some more research. They are based in Irelend but have an office in the same building as Tracsis and work closely with a partner (Citi Logik).
Enjoy the weather.
I own Tracsis shares. Do your own research, etc, etc.
Hi Muzzletoff,
The modest increase in turnover looks unexciting (I didn’t see that coming) but the group should have a stronger second half and the January acquisitions should strengthen final year figures. Headline PTP was lower but includes £175k in acquisitions costs and £500k in technology improvement costs. Cash generation remains very strong. A larger than expected increase in the dividend (Is that a nudge towards institutional investors?).
The share price has shown remarkable resilience given that the hugely successful founder CEO is stepping into to a new role and the results were flattish.
However, on the other side of the ledger: the Dept. of Transport and the disruption to the franchise award timetable; no mention of the delayed opening of crossrail and its implications for the contract win announced in the summer last year.
I suspect the CEO reacted to the delay of contract wins/renewals in the first half and acted swiftly with two acquisitions in January. CTM offers synergies, immediate revenues and cash flow for the current year to July while Compass offers long term complimentary cross selling software opportunities.
The Bellvedi acquisition gives Tracsis immediate access to a team of experienced software developers with specific Rail transport sector knowledge. I suspect IT recruitment has been slower than Tracsis would have liked to meet product development demand. Bellvedi offers savings (both cost & time) in recruiting IT professionals, a very high margin business and should reduce the software development cycle on new products and upgrades.
Chris Barnes as the new CEO has sasquatch size boots to fill in delivering a new phase of expansion and unifying a diverse group of teams. I have the utmost respect for JM in building a near £200 market cap business.
I hold Tracsis shares. Do your own research, etc.
Had problems with gremlins in my PC over the last few weeks and could not post any comments.
Brief trading update due this week.
The house broker increased the EPS forecast for this year by 3% (Yes, 3%) and to 30p for next year to July 2020 due to recent acquisitions. This reinforces how conservative Tracsis handle profit upgrades. Increases in guidance from Tracsis are a collector’s item. The upgrade is reassuring but let’s see the numbers this week.
Activity on the ground across group looks positioned for solid growth. I think the cash position will also be very strong even after the recent acquisitions.
This is the first release by the new Chief Executive and full Interims due late March.
Two large institutions trimmed their holdings. This could be one of those short rallies ahead of the results/update.
I hold Tracsis shares. Do your own research, etc, etc, etc.
Hi Muzzletoff,
You wait ages for a bus and then...........
Compass is a long established partner of Citi Logik where Tracsis have a near 20% investment. Tracsis appear to be cementing relationships with key partners.
CTM is an excellent complimentary acquisition to the rapidly expanding SEP events. This adds a strong client list (e.g. Glastonbury, London marathon and Southampton football club), access to event day staffing resources and synergies to improve margins. The timing with CTM will have an immediate impact on this year’s numbers. Based on the previous year’s total, CTM could easily add £1-2m in revenues this financial year as business is heavily weighted towards spring/summer months.
Both acquisitions looked like great value and could still leave Tracsis with £15m on the balance sheet by the Jan 2019 half year.
Tracsis recently secured a 5 year contract with Transport for Wales rail services to offer their delay repay compensation platform.
Signs on the ground remain encouraging but the CEO’s announcement came out of the blue so research can only take us so far. The stability in the share price has been impressive and the CEO has a solid following.
I hold Tracsis shares. Do your own research, etc, etc.
Agreed, the CEO has been the driving force for the last 10 years. However, the transition to new CEO appears to have been managed very well.
Tracsis in 2019 now a very different beast and I wonder if John McArthur(JA) prefers working on strategic rather than operational matters. Tracsis is now a near £200 mkt cap with 4 divisions and least 12 offices. Either way, JA is a very impressive CEO and his performance has been exceptional.
JA’s comments about his future role are available on stockopedia – small cap report dated 7th Jan 2019. I think he will be actively engaged for at least 12-18 months. The £20m on the balance sheet is earning very little in the Halifax!
Re - recent contract win. At least 3 rail franchises are up for award this year. Tracsis work with at least one partner in most of the bidding teams so they have put themselves in a great position to receive new contracts or extensions whoever is successful.
Tracsis have long standing product trials with Network Rail who are now awarding contracts under CP6 (2019/24 investment programme). Hope to hear contract news by the Spring/Summer.
Tracsis are opening a new office in north London to meet the growing demands for traffic sensor and camera installations in and around London. Tracsis and their partners are extending their reach with Highways England, London councils and TFL. However, not sure how the delay on crossrail will affect their recent contract win for Ontrac.
On the ground, things appear to be going well.
I hold Tracsis shares. Do your own research, etc, etc.
Solid results from my point of view.
The CEO reaffirmed the acquisition policy, a number of pipeline opportunities and converting the cash to purchasing profitable companies.
The CEO stated “there wasn’t much RNS newsworthy things to talk about overseas” but confirmed there were more pilots rolled out in the US. RNS statements only follow “significant” contracts wins/renewals. I’ll continue to burrow for signs of improved operational activity.
The various teams are marketing new software and looking at new markets. Pilot/trial activity remains good so I hope we hear news later in the financial year (more likely in the UK than overseas).
I remain a contented long term holder.
I hold Tracsis shares. I have no links with the company. Do you own research, etc.
In summary:
The post on the bulletin board is very positive about the conservative accounting policies of expensing software development and free cash flow regularly exceeding profits. Cash forecast is £22m as per trading update.
It mentions Tracsis record of exceeding broker expectations. The poster thinks Tracsis will beat the 24.5 EPS broker forecast and that it’s an attractive buy at this price (posted 2 days ago) given its fast growth momentum, quality earnings and possible upgrades next year.
The post is on the public board. Its free to join to access the public board. Another useful source of information/opinions.
The new non-executive has impressive experience with major companies both in and outside the transport industry. Tracsis have software/products which could perform across industrial sectors. Another striking strategic addition by Tracsis.
I agree, there should be a small bounce (today’s move?) following the results.
A positive statement confirming a solid start to the year will suffice for me but I back this management Team.
I hope Paul Scott does another interview as it provides reassurance if he endorses the numbers/accounting policies. There are recent comments on the advfn chat board concerning accounting policies and its impact on cashflow.
I hold Tracsis shares. Do your own research, etc, etc.
A £2m contract (not to be sniffed at) is very positive news for the team and a vote of confidence from the client. High levels of contract renewal opportunities do not happen by chance and form part of a forward thinking business expansion strategy by the CEO.
The statement refers to “ Tracsis cementing its position as a valued supplier” and this augurs well for the future.
The fall in the share price looks a tad harsh to me but reflects broader market sentiment towards AIM and an opportunity for profit taking (surely a back handed compliment!).
In the budget, the Chancellor repeated positive news for Travel compensation Services (acquired in Feb 2018).
"The Budget confirms a more streamlined process for compensating passengers affected by rail delays. A one-click delay repay system will be introduced as a requirement for future rail franchises and will be available to those passengers with advance purchase and season tickets."
The Dept. of Transport will apply pressure to the rail companies to improve their delay compensation process. Nowt immediate but more opportunities for TCS.
I hold Tracsis shares. Do your own Research, etc, etc.
Impressive new product launched by Sep events. Visit Tracsis website, go to - our services, then Sep events website, then Sep news, scroll down the page and look for the Showman’s show section click "SEP unveils TLT at The Showman’s Show" IN BLUE.
I think this new kit will be really attractive to events/companies like Silverstone who manage large volumes of traffic on, and leading up to event days. I wonder if this kit would also be attractive to airports who manage high volumes of daily commercial/operational deliveries (i.e. not passenger parking). New product to offer to existing and new customers.
Also, really good training video showing train drivers (approx. 10 mins) how to record/report incidents/delays. Visit you tube, enter “hub demo driver”.
Results due in a fortnight. Looking forward to updates on progress in the current year & contract opportunities outside the UK.
I am a shareholder. No links to/with Tracsis. As ever, do your own research, etc.
Muzzletoff, I agree with your sentiments/comments.<br /><br />With a little digging, I was able to establish that activity across the divisions over the last 12 months was very strong. <br /><br />Agreed, there is always room to improve financial details for investors on any public company’s website but I would encourage investors to use google or visit the divisional websites to see how busy the operating units are across the group. I accept Google can’t give hard financial details across the group but signs of contract wins, promotional activity are very encouraging. I’m not dismissing the importance of the financial details.<br /><br />There is a brief voxpox on audioboom (14/09/18) with Russ Mould at stockbroker AJ Bell talking about Tracsis and its valuation. Tracsis starts at 22.05 (approx 4 mins). For me, Tracsis is a growth stock and justifiably trades at a premium PE. Many investors thought Tracsis was too expensive in PE terms at £3, £5 and now at £7. That’s fine as we are all entitled to our own investment strategy.<br /><br />The CEO is focused on building the business. The CEO is canny, straight talking and careful with money (presenting to investors can be relatively expensive). Profits fell slightly in 2016 and the CEO took immediate action to implement efficiencies and restore margins. I struggle to be too critical of the CEO and management team when you look at their performance over the years. <br /><br />I’m not convinced that the market appreciates how embedded Tracsis products are with train operating companies, network rail, TFL, etc. Tracsis are a key strategic partner for these organisations and will continue to offer new products to improve operational efficiencies.<br /><br />I prefer regular, consistent, smaller contract wins across the broad and these don’t always require an announcement to the stock exchange. For example, the recent contract win by Ontrac on Cross rail offers revenues over 5 years. HS2 is another opportunity for Tracsis. <br /><br />SEP events had a very busy year in managing traffic at outdoor events (Traffic management at race courses, Silverstone, country fairs/events, etc) and benefitted from the good weather over the summer months. <br /><br />There are videos on Youtube (search 1. tracsis canal trust & 2. Vivacity labs ) that gives a good flavour of the use of technology replacing traditional survey methods. <br /><br />Tracsis acquired Travel Compensation Service earlier this year and saw an increase revenues and profile following the timetabling issues across Thameslink and Northern rail. TCS just signed their first partnership with business travel organisation clarity to offer its delay repay compensation service to their clients. After the rail sector, TCS plan to enter the air and ground transportation sectors. <br /><br />I apologise, if the above reads like a party political broadcast on behalf of Tracsis but I'm sharing/sheding light on the strong performance across the group. <br /><br