In February, news that some of Tracsis' (TRCS) software sales would be delayed into the second half overshadowed a decent six-month trading update. Now, in the absence of that unwelcome news, investors have fully appreciated the strength in these half-year numbers. With revenue and cash profits ahead of expectations - something that was announced back in February - the shares rose 10 per cent on results day.
The majority of that growth has come from two businesses acquired in the final quarter of 2015. SEP and Ontrac delivered £1.8m and £2.7m of revenue respectively, both from next to no contribution in the comparable period. The latter - a rail software provider - was a particularly welcome addition to the group's software division, which was hit by new contract delays after the Department for Transport changed its refranchising timetable.
These concerns prompted broker Investec to trim its full-year pre-tax profit forecasts to £7.3m, giving EPS of 22.2p (from £6.7m and 22p in FY2016). But recovery is expected during the following year. Net cash inflows of £1.3m also mean the self-funded acquisition strategy looks set to continue.
TRACSIS (TRCS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 408p | MARKET VALUE: | £114m | |
| TOUCH: | 400-415p | 12-MONTH HIGH / LOW: | 548p | 338p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 110p* | NET CASH: | £12.7m | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016† | 13.1 | 1.6 | 4.9 | 0.5 |
| 2017 | 15.6 | 1.8 | 5.1 | 0.6 |
| % change | +20 | +10 | +4 | +20 |
Ex-div: 6 Apr Payment: 21 Apr *Includes intangible assets of £25m, or 91p a share †Excludes discontinued operations | ||||
