Shares in Tracsis (TRCS) were trading up by as much as 8 per cent on release of an upbeat set of half-year results, although shareholders will have to make do without this year's half-year dividend, deferred in the wake of the coronavirus outbreak. Nevertheless, the transport and traffic software specialist saw its operating profit grow by 8 per cent to £2.6m, excluding exceptional items. And the group also increased its cash buffer by 33 per cent despite deals to acquire three new businesses over the course of 2019.
Revenue growth was driven by its traffic and data services segment, which saw its sales increase by 63 per cent to £14.5m. However management warned that the division was being "majorly impacted" by the coronavirus, especially as its events businesses – SEP and CTM – derive "a significant amount of revenue" from major UK outdoor events, which have largely been cancelled. Tracsis has therefore lowered casual labour costs, redeployed staff, reduced discretionary spend and taken advantage of the government’s job retention scheme. Chief executive Chris Barnes is bracing for “some sort of recessionary pressure” following the virus outbreak.
The group’s rail technology and services business also posted a strong performance, with adjusted cash profits up by 17 per cent to £4.1m. Mr Barnes said that the business had seen an uptick in inquiries in its consultancy division as other companies face operational management challenges, especially timetabling, in the midst of the virus crisis. The group noted high renewal rates for existing software products, as well as income from multi-year contract wins from previous years.
| TRACSIS (TRCS) | ||||
| ORD PRICE: | 615p | MARKET VALUE: | £179m | |
| TOUCH: | 581-615p | 12-MONTH HIGH: | 832p | LOW: 425p |
| DIVIDEND YIELD: | nil | PE RATIO: | 33 | |
| NET ASSET VALUE: | 173p* | NET CASH: | £24.4m** | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 18.8 | 2.12 | 5.97 | 0.80 |
| 2020 | 26.4 | 2.42 | 6.76 | nil |
| % change | +40 | +14 | +13 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £37.2m, or 127p a share **Includes lease liabilities of £1.1m | ||||
