Monitoring drivers' behaviour, measuring fuel emissions and tracking the location of vehicles helps motor insurers to price their policies and vehicle fleet managers to improve efficiency and security. Growing numbers turned to Trakm8 (TRAK) - which manufactures technology collecting such automotive data - in the first half, driving adjusted cash profits up 70 per cent to £1.9m.
The telematics group, whose customers include AA and Direct Line, grew its installed base of devices by about three-quarters to 135,000 units. The resulting surge in monthly service fees fuelled a 65 per cent rise in recurring revenues to £4m. And a 21 per cent increase in like-for-like orders points to further growth down the road.
Organic sales fell in Trakm8's smaller product division as management exited lower-margin manufacturing contracts and focused on supplying the core business. It also shelled out £500,000 to hire more engineers, improve customer support and install a second automated assembly line. Those investments were supported by operating cash flow of £1.3m - more than the group generated throughout the previous financial year.
Trakm8 also acquired and integrated DCS Systems, adding dashboard cameras and other video technology to its offering. Broker FinnCap raised its forecasts and now expects full-year adjusted EPS of 11.3p, rising to 15.9p in the year to March 2017 (from 5.9p in FY2015).
| TRAKM8 (TRAK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 266p | MARKET VALUE: | £80m | |
| TOUCH: | 262-270p | 12-MONTH HIGH: | 298p | LOW: 63p |
| DIVIDEND YIELD: | nil | PE RATIO: | 35 | |
| NET ASSET VALUE: | 28p* | NET DEBT: | 25% | |
| Half-year to 30 September | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 8.5 | 0.7 | 2.5 | nil |
| 2015 | 11.7 | 1.2 | 4.3 | nil |
| % change | +38 | +73 | +72 | - |
*Includes intangible assets of £6.4m, or 21p a share | ||||
