Given Tracsis's (TRCS) rail technology business posted a cash profit margin of more than double that of the traffic and data services business during the first half, it is little wonder that recently appointed chief executive Chris Barnes believes that providing rail infrastructure services will become the dominant growth engine for the group. Over the period in question, rail technology and services saw a 15 per cent improvement in sales to £21.9m, while Tracsis’s other main business – traffic and data services – grew by 31 per cent to £27.3m.
Mr Barnes also said that while Tracsis’s acquisition strategy is not changing, with three acquisitions completed last year, it is going to push harder on the organic side – with a focus on cross-selling. Over the 12 months, organic revenue growth came in at 9 per cent.
True, the transport and traffic software company endured a considerable earnings decline – but this reflected the fact that the prior year had benefited from a £2.65m exceptional credit, after acquired business Ontrac failed to meet certain targets that would have led to its contingent consideration being paid in full.
House broker FinnCap expects adjusted EPS of 32p for FY2020, up from 27.4p in FY2019.
| TRACSIS (TRCS) | ||||
| ORD PRICE: | 623p | MARKET VALUE: | £179m | |
| TOUCH: | 615-630p | 12-MONTH HIGH: | 695p | LOW: 583p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 166p* | NET CASH: | £24.1m | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 23.1 | 4.2 | 13.4 | 1.0 |
| 2016 | 31.4 | 4.1 | 13.4 | 1.2 |
| 2017 | 34.5 | 4.6 | 13.4 | 1.4 |
| 2018 | 39.8 | 8.3 | 25.7 | 1.6 |
| 2019 | 49.2 | 6.6 | 17.8 | 1.8 |
| % change | +24 | -21 | -31 | +13 |
| Ex-div: | 30 Jan | |||
| Payment: | 14 Feb | |||
| *Includes intangible assets of £38.8m, or 135p a share | ||||
