Trakm8 Holdings (LON:TRAK) released their year-end update on a Friday, missed their £32m revenue estimates and did not mention a profit. Whoever writes their RNS should clearly be benched as this was a spectacular fail on all fronts and I have emailed the CEO to complain again, as I did in the past, but it has become my belief that they truly do not care about optics and just run their business without much effort spent on investor perception.

I think the lack of reasonable targets and lack of transparency in the RNSs has cost them and us gravely in terms of how the company is perceived. And it’s a shame as that is usually the easiest problem to fix. But enough of that and on to the real business....

Explosive growth in FY18

The number of connections in the Period increased by 31% to 251,000 from 191,000.
Recurring revenue during the Period increased by 11% to GBP10.9 million
year-end net debt reduced by GBP0.5 million to GBP3.4 million (31 March 2017: GBP3.9 million).

Number of devices

2015 H1
2015 H2
2016 H1
2016 H22017 H1
2017 H2


Record breaking year in deployment of new devices for TRAK, with another record being that H2 has for the first time more devices deployed than H1. H2 is usually their dead season so that means that production has been ramping up significantly. Then there's also this:

reduction of GBP2.2 million following the Group fully exiting the contract electronic manufacturing business
To meet the anticipated demand for these devices from existing and new customers, the Group is planning to assemble these new hardware devices with increased levels of automation.

If they hadn't cut those contracts they'd have easily made the 32m target. And if they have 2m less orders to fill why are they investing heavily in automating the production lines when they are already low on cash? Why not play it safe and let those low margin contracts in place so they make the £32m target and make everyone happy?

I believe that the reason behind H2 shooting up like that, their move away from OEM contracts and ramping up production lines is massive demand. They have demonstrated this already by adding 60,000 devices in one year which…

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