Trakm8 Hldgs Regulatory News (TRAK)

26 April 2016

TRAKM8 HOLDINGS PLC

("Trakm8", the "Company" or the "Group")

Year End Trading Update

Trakm8, the AIM quoted telematics and data provider to the global market place, today announces a trading update for its financial year ended 31st March 2016.

Highlights

· Revenues up 44% year on year

o Strong organic growth with like for like revenues up 28% year on year

o Recurring revenue up c.50% to over £8m

· Orders received up 29% year on year (like for like basis), 151,000 units now reporting to our servers

· Reduced year-end net debt* of £0.97m, reflecting strong cash generation

· Maiden 2p final dividend per share to be proposed

· Recent substantial contract wins with Iceland Foods, Kubota UK, the AA and BT Fleet

· Two acquisitions completed in the year; integrations proceeding to plan

and trading in line with expectations

· Appointment of J.P. Morgan Cazenove as Financial Adviser to the Company

* Net debt defined as bank debt (£4.84m) less gross cash (£3.87m).

Trading

Trakm8 has achieved significant growth in revenues and profits compared to the prior year. Growth in group profitability is in line with expectations and driven by year on year revenue growth of 44% and a small improvement in gross margins.

Strong cash generation during the second half of the year resulted in year end net debt of £0.97m, being £1.3m better than expectations.

Like for like orders (excluding the DCS business and Route Monkey which were acquired during the year) were 29% higher than the previous year. Route Monkey recently received a three year contract extension from Iceland Foods amounting to circa £0.5m. In addition the Group has recently signed a number of new large contracts which are expected to start generating value for the Group in the new financial year.

Revenues on a like for like basis were 28% higher than last year. The DCS business and Route Monkey achieved revenues in line with our projections at the time of these acquisitions.

We achieved another large increase in connections with approximately 151,000 units reporting to our servers by year end (2015: approximately 102,000). On the back of this increase, recurring revenues increased strongly, being approximately 50% higher than the previous year at over £8m (2015: £5.6m).

BOX Telematics has further benefitted from the growth of manufacturing devices for Trakm8 and from the decision to reduce the level of lower margin product sales to third parties. Over 153,000 units were built and shipped both to other telematics companies and to report to our servers in the financial year as a whole, an increase of 51% compared to last year.

The Group continues to invest heavily in internal resources to manage its growth, particularly in engineering where the opportunities for new integrated camera, telematics and optimisation solutions has resulted in a significantly higher investment in IP.

The pipeline of new customer opportunities is growing, following investment to strengthen our sales force and marketing activities.

Outlook

The outlook for the new financial year is encouraging with strong revenue visibility reflecting the strength of Trakm8's business model. This is supported by recent contract wins including BT Fleet who will be reselling our Trakm8 solutions to its existing and new customers.

The Board is planning a significant increase in sales and marketing investment to support the strength of the Company's new products, solutions and algorithms in this fast growing market.

The full year benefit of the two acquisitions, recent contract wins, including the important new reseller contracts with the AA and BT Fleet, and the continuous increase in devices reporting to our servers means the Board expects another strong trading performance in the new financial year.

Appointment of Financial Adviser

J.P. Morgan Cazenove were appointed as the Company's Financial Adviser this month. The appointment reflects the Board's belief that it is appropriate to broaden its advisory relationships given the evolution of the business and the telematics industry and to help us take the next steps in the Company's development.

Dividend

The Board has considered the payment of a dividend in light of the Group's strong financial performance and its confidence in Trakm8's prospects. As a result, the Board intends proposing a maiden final dividend of 2 pence per ordinary share subject to shareholder approval at the Company's AGM in September. 

Notice of Results

The Group expects to announce its final results for the year ended 31 March 2016 on Monday, 4 July 2016.

John Watkins, Executive Chairman of Trakm8 commented:

"Trakm8 has continued to build on the momentum established over recent years based on strong organic growth supplemented by selective acquisitions. These acquisitions and our own significant investment has given the Group an unrivalled portfolio of in-house capabilities to take to market.

"The cash generative model of our business not only enables us to make considerable investments in capital assets, IP and acquisitions, but also now to join the list of AIM companies paying dividends.

"We are well positioned to build on the excellent platform that we have established and to capitalise on the outstanding current market opportunities."

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About Trakm8

Trakm8 is a UK based Big Data company utilising telematics as its primary enabler. Through IP owned technology, over two billion miles worth of data is collected annually through its fleet management solutions to create and fine tune algorithms used to score driver behaviour, monitor vehicle health and continuously improve the security and operational efficiencies of customers' vehicles.

With its headquarters in Dorset and a manufacturing facility in the West Midlands, the Group supplies a number of well-known customers in the fleet management and insurance sectors across the UK and further afield including customers such as the AA, Saint Gobain, EON, Direct Line Group and Young Marmalade.

The Group's portfolio offers complete telematics solutions, which since the acquisition of the business and assets of DCS Systems, includes dashboard cameras that enable customers to record driving incidents and mitigate the risk from "crash to cash" accidents. This is complemented through a comprehensive hardware range, which includes a self-install unit that is one of the smallest available on the global market.

Recently, the Group acquired Route Monkey, significantly enhancing the Group's logistics solution which offers both route scheduling and optimisation, including routing for electric vehicles.

Trakm8 has been listed on the AIM market of the London Stock Exchange since 2005.

www.trakm8.com / @Trakm8