Demand from commercial customers underpinned full-year figures from vehicle tracking technology firm Trafficmaster. Revenues from its business services arm jumped 23 per cent to £40m while margins doubled to 18 per cent, reflecting a shift towards higher-margin customer subscriptions. In particular, US-based Teletrac won a number of significant new fleets and overall fleet subscribers jumped 10,000 to 98,000, an impressive outcome given the tough conditions.
Trafficmaster had less luck selling kit direct to consumers due to falling UK sales of upmarket motors and a slump in project-based emerging products. The traffic side (providing directions and jam updates) also suffered with income down 15 per cent to £5.4m, which sent the unit £300,000 into the red at an operating level. Stolen vehicle tracking revenue was flat, but this business maintained market share and reported a profit of £0.5m.
Scaling up the US operations looks a smart move since that market is about 10-times the size of the UK. The recent acquisition of US satellite tracking specialist Fleet Management Solutions is a good early move while new debt arrangements and proceeds from January's £4.2m placing improves financial headroom.
Canaccord Adams expects 2010 adjusted pre-tax profits of £7m and EPS of 4.6p (£5.1m and 3.6p in 2009).
TRAFFICMASTER (TFC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 37p | MARKET VALUE: | £ 56m | |
| TOUCH: | 36.25-37p | 12-MONTH HIGH: | 42p | 19p |
| DIVIDEND YIELD: | nil | PE RATIO: | 10 | |
| NET ASSET VALUE: | 23.5p* | NET DEBT: | 33% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 42.3 | 0.90 | 0.60 | nil |
| 2006 | 52.8 | 5.80 | 4.30 | nil |
| 2007 | 48.4 | 4.92 | 3.59 | nil |
| 2008** | 55.1 | 4.51 | 3.41 | nil |
| 2009 | 57.5 | 5.13 | 3.62 | nil |
| % change | +4 | +14 | +6 | - |
*Includes intangible assets of £16.3m, or 12p a share **2008 figures restated | ||||
