Following on from a positive pre-close statement, rail technology specialist Tracsis (TRCS) delivered full-year profits ahead of analyst expectations. Strong conversion of profits into cash enabled management to initiate dividend payments and to boost cash balances by 62 per cent to £7.6m. Chief executive John McArthur has earmarked this capital to fund growth organically and through acquisition. We are confident, too, that Tracsis will be able to achieve this both at home and, increasingly, abroad.
Revenues more than doubled, aided by a "very significant" degree by a full-year contribution from MPEC, a data-logging company acquired in 2011, which contributed revenues of £4.5m. MPEC's technology provides real-time information on equipment, enabling rail companies to replace failing parts before they break. Demand is on the increase and a strong showing from MPEC helped Tracsis drive adjusted cash profits up by 164 per cent to £3.3m.
Despite possible delays linked to the retendering of the West Coast line, at least 80 per cent of UK franchises will come up for tender over the next five years, providing tremendous growth opportunities. Tracsis is also intent on expanding outside the UK; at present, only 3 per cent of revenues are generated abroad.
WH Ireland expects EPS of 10.7p and a dividend of 0.65p in the 12 months to July 2013.
| TRACSIS (TRCS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 146p | MARKET VALUE: | £36m | |
| TOUCH: | 145-147p | 12-MONTH HIGH: | 146p | LOW: 55p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 42p* | NET CASH: | £7.57m | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 0.81 | 0.39 | 2.47 | nil |
| 2009 | 2.31 | 0.67 | 2.69 | nil |
| 2010 | 2.65 | 0.58 | 2.50 | nil |
| 2011 | 4.08 | 1.12 | 4.49 | nil |
| 2012 | 8.67 | 3.01 | 9.96 | 0.55 |
| % change | +112 | +169 | +122 | - |
Ex-div: 16 Jan Payment: 1 Feb *Includes intangible assets of £4.25m, or 17p a share | ||||
