All18 Dec 2015 12:49
From today's Investors Chronicle - article by Simon Thompson headed Bumper contract win for Trakm8.
There seems to be no end in sight to the run of contract wins at telematics and data provider Trakm8 (360p). The company has just announced an extension to its current relationship with the AA. Trakm8 has supplied telematic systems to the AA for its fleet of 3000 roadside assistance and recovery vehicles for the past 4 years, and has recently been working with the organisation to develop a new business- to business fleet management system. The new product will be offered to 9.5m of the AA's buiness-to business customers, enabling them to to help manage the cost and logistics of running their fleets. It is expected to be attractive to large fleet operators as well as SMEs running fleets of five or more vehicles. Executive chairman John Watkins points out that "this is a substantial contract and an extremely interesting opportunity for Trakm8".
I wholeheartedly agree and, although analysts have yet to update their profit forecasts, I see obvious upside potential to EPS estimates of 16.5p for the 12 months to end march 17th 2017, up from 11.3p in the current financial year. Moeover if the company continues to win additional contracts, as it has been doing for the past 18 months, then I can only see momentum in the order book and profits building.
So having first advised buying Trakm8's shares at 92p ("zoning in on a profitable price move" 16th February 2015), and watched them re-rate by a third since my last update (" patience is paying off" 30th november 2015), Iwould run your 291% pap
er profits given the earnings risk is heavily skewed to the upside. Run Profits........End Of.
A very favourable report in my opinion and should in itself lend more positive publicity about the company to interested investors. Wish I had bought this long ago.