REG - Journeo PLC - Final Results
28/03/2022 07:00
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RNS Number : 1366G Journeo PLC 28 March 2022
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation (2014/596) which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, as amended and supplemented from time to
time.
Journeo plc
("Journeo" or "the Group")
Final results for the year ended 31 December 2021
Journeo plc (AIM: JNEO), a leading provider of information systems and
technical services to transport operators and local authorities, is pleased to
announce its final results for the year ended 31 December 2021.
Financial headlines
· Revenue increased 15% to £15.6m (2020: £13.6m)
· Gross profit increased 13% to £6.0m (2020: £5.3m)
· Underlying profit before tax increased 37% to £0.6m (2020: £0.5m)
· Profit before tax £0.4m (2020: £0.2m)
· Profit before tax excluding share-based payments was £0.5m (2020:
£0.3m)
· Cash and cash equivalents at 31 December 2021 £1.1m (2020: £1.3m)
· Diluted earnings per share was 4.46p (2020: 2.26p)
Operational headlines
· Increased adoption of Journeo technologies amongst the Group's fleet
operator customers, now with over 4,000 vehicles connected to the Journeo
Portal.
· Continued investment in Research and Development delivering
advancements in Driver Performance Monitoring and Ultra-Low Power displays
technology.
· Launched new Fault Management System (FMS) that allows support
tickets to be automatically created from self-reporting display systems.
· Extensive work with our supply chain to ensure availability of key
components.
· Initiation of Group-wide online seminars from industry and domain
specialists (both internal and external) to ensure staff engagement and
broaden staff knowledge of the markets in which we operate and technologies
that we deliver.
· Completed the first two of four phases of our Environmental, Social
and Governance (ESG) study.
· Extension of our cyber security credentials to include Cyber
Essentials Approval, building upon our existing ISO 27001:2013 accreditation
for Information Security Management. All ISO accreditations retained.
Russ Singleton, CEO of Journeo plc, said: "Whilst 2021 proved to be another
challenging year for public transport as passenger numbers remained
significantly below pre-pandemic levels, Journeo showed great resilience
throughout, securing a number of strategically important contracts, increasing
revenues and profits, investing in research and development, and generating a
significant and growing pipeline of opportunities.
"The cessation of the 'work from home' advice in January 2022 is regarded as a
positive step towards encouraging people back to work and to use public
transport, with both widely viewed as essential to the UK's economic recovery.
The Government recognises that the recovery needs to support its net-zero
carbon targets and is also dependent on public transport being seen as a
viable and preferable alternative to personal-use vehicles. Key to this is
improving the overall passenger experience, facilitated by investment in
carbon-zero vehicles and technology that improves services through real-time
insights.
"The Government has put in place a number of policies to support the revival
of public transport, laying the groundwork for local authorities and transport
operators to form Enhanced Partnerships as part of the National Bus Strategy
for England, and to encourage further use of our railways from the
Williams-Shapps Plan for Rail. Whilst funding levels may have been impacted
by the COVID response, the Government continues to invest in town and city
infrastructure and the transport networks that feed them.
"Opportunities are beginning to flow from the substantial funding and spending
that is taking place, and local authority and fleet operator customers are
re-engaging with renewed momentum. The increasing adoption of our IP and
technologies reinforces our conviction that a customer-led, applied
development strategy is the correct one; and moreover, that it is working. We
remain focused on delivering ambitious growth plans."
For further information, please contact:
Journeo plc +44 (0) 203 651 9166
Russ Singleton/ Nick Lowe
Cenkos Securities - Nominated Adviser and Broker +44 (0) 207 397 8900
Katy Birkin/Callum Davidson
Notes to editors:
Journeo plc is a leading information systems and technical services business
focussed on public transport and related infrastructure within towns, cities,
airports, and local authorities. The Company works extensively with local
government departments, combined authorities, and many of the largest
multinational transport operators, supporting them as systems converge towards
a more efficient and sustainable smarter-cities future.
The business currently comprises two segments:
· Fleet operator solutions: CCTV video surveillance to improve
passenger & driver safety, telematics for vehicle and driver performance
monitoring, real-time communications for remote condition monitoring and
automatic passenger counting.
· Passenger transport infrastructure solutions: design, manufacture,
installation, and management of hardware and software for electronic public
transport information systems, in and around towns, cities, ferry terminals
and airports which includes smart-ticketing and wayfinding.
In the last 4 years, the Company has invested over £5 million in research and
development, enabling it to design and supply powerful new solutions for
customers' complex requirements and the demands of modern public transport.
With an Internet of Things ("IoT") approach and open standards, together with
field-proven and reliable engineering, Journeo is able to offer flexible,
scalable products and services that can integrate with existing technology
while preparing for future advancements.
Chairman's Statement
Introduction
The Group continues to make solid progress in terms of financial performance
and pace of development which is driving growth in the adoption of its
hardware, software and services.
Journeo showed great resilience throughout 2021 increasing revenues, and
profits, and has generated a significant and growing pipeline of opportunities
through its strategic business development.
With passenger numbers still below pre-pandemic levels, the need to capture
information on-board vehicles and provide real-time insights to operators,
network managers and passengers will be one of the key factors in improving
the overall passenger travel experience and encouraging people back to using
public transport.
Trading results
Group results for the year ended 31 December 2021 show underlying profit
increased 36.6% to £634k (2020: £464k).
Overall sales increased by 15% to £15.6m (2020: £13.6m) and gross profit
increased 13% to £6.0m (2020: £5.3m).
Fleet sales increased by 36% to £9.3m (2020: £6.8m) despite the lower
passenger numbers continuing for the operators. Gross profit increased to
£2.9m (2020: £2.1m) with margins maintained at 31% (2020: 31%).
Passenger sales decreased by 7% to £6.3m (2020: £6.8m). Margins improved to
49% (2020: 47%) due to a lower proportion of new system installations, and
gross profit decreased slightly to £3.1m (2020: £3.2m).
Underlying administrative expenses increased to £5.6m (2020: £5.1m) as
expenditure returned to pre-Covid-19 levels.
Profit before a charge for share-based payments and before tax was £0.5m
(2020: £0.3m).
Profit before tax was £0.4m (2020: £0.2m.
Diluted earnings per share was 4.46p (2020: 2.26p).
Cash and cash equivalents closed the year at £1.1m (2020: £1.3m).
Markets
Last year proved to be another challenging year for transport as passenger
numbers remained significantly below pre-pandemic levels. According to the
DfT annual bus statistics England, in 2020/21 local bus passenger journeys
fell by 61% compared with 2019/20 and 54% of all journeys occurred in London.
However, cessation of the UK Government's work from home advice in January
2022 is regarded as a positive step towards encouraging people back to work
and to use public transport which is widely viewed as essential to the UK's
economic recovery.
It is clear however, that the recovery must be focused on environmental
benefits, where businesses and members of the public are encouraged to support
the Government's aim to achieve Net Zero carbon by 2050. Central to this
goal is the adoption of public transport as a viable and preferable
alternative to personal-use vehicles.
The Government has put in place a number of policies to aid its target, laying
the groundwork for local authorities and transport operators to form Enhanced
Partnerships (EP) as part of the National Bus Strategy for England and to
encourage further use of the UK's railways from the Williams-Shapps Plan for
Rail.
It is encouraging to see the ongoing support from the UK Government to invest
in town and city infrastructure and the transport networks that feed them.
Whilst funding levels may have been impacted by the Covid-19 response,
opportunities are beginning to flow from the substantial funding and spending
that is taking place.
One such Government scheme that is being well-received by our operator
customers is the Zero Emission Bus Regional Areas (ZEBRA) scheme. Whilst we
are not direct beneficiaries of the scheme, it is reigniting the new bus
sector of the market, that has been depressed for a number of years.
There are an estimated 40,000 buses in the UK. Just over half of the 32,000
buses on roads in England currently meet EURO VI standards and around 2% are
currently zero emission vehicles, an indicator of the scale of investment that
is needed over the coming years if the Government is to meet its environmental
ambitions.
Historically, fleet operators have been replacing their vehicles at a rate of
5% to 7% per year. Due to the reduced passenger numbers over the last few
years, many fleet operators have chosen to extend the life of their existing
vehicles, rather than purchase new vehicles. The Government has made
commitments to 4,000 carbon zero buses by 2024 and released 'Bus Back Better',
the National Bus Strategy for England, which requires local authorities to
prepare Bus Service Improvement Plans (BSIPs) and form Enhanced Partnerships
(EPs) with fleet operators in order to access funding.
To move away from diesel powered buses to fleets of newer, cleaner vehicles,
requires significant investment in both new vehicles as well as
vehicle-charging infrastructure, whether electrical, hydrogen or a combination
of both by manufacturers, local authorities and fleet operators.
A number of vehicle manufacturers are reporting significant interest for
electric and hydrogen fuel cell buses. In the medium term this may lead to
a positive cycle where reduction in production costs leads to further demand
for new vehicles, and the products, software and services that Journeo
supplies.
The Department for Transport's (DfT) unlocking of timetable and vehicle
location data through the Bus Open Data Scheme (BODS) is also delivering new
opportunities, allowing Journeo to design systems that can enhance the overall
passenger travel experience where data was not previously available.
It is also encouraging to see a return of international travel. Having
delivered solutions to London Gatwick Airport and London Stansted Airport, we
were delighted to welcome London Heathrow Airport to the list of major
international travel hubs that rely on our Passenger Transfer solutions. In
2020, prior to the pandemic, Heathrow was the third busiest airport in the
world by international passenger traffic
(https://en.wikipedia.org/wiki/List_of_busiest_airports_by_international_passenger_traffic)
. The project is now underway and, on completion will allow us to showcase
our powerful airport bussing and passenger information solution a to an
international audience. In the meantime, our airport solutions are gaining
industry recognition for improvements to passenger travel experience and in
supporting Airport Authorities meet their own service level agreements.
Strategy
Our strategy is to seek, identify and solve current or anticipated future
requirements within our target markets. We form deep and long-lasting bonds
in supply chains and with customers to understand where to apply research and
development to build Intellectual Property (IP) that has real value to our
customers and that may also scale worldwide.
Bids and tenders involving, or built around, our own IP and know-how, are a
key differentiator that gives us a high-success rate in sales conversions and
purchase orders.
We invest in developing a broad range of solutions around our core technology
that customers need now and that we anticipate they may need in the future.
The Journeo Portal is a highly secure web-based application launched to the
market in late 2019. Journeo Portal saw the number of vehicles connected
increase by 33% from 3,000 to 4,000 during 2021. Other orders and the
three-year SaaS award from Arriva announced in November 2022 indicates that we
will surpass the 10,000 connections milestone during 2022, where each
connection is a bus, coach or train generating recurring income every month.
This demonstrates that we have an attractive and commercially viable
cloud-based offering, but also meaningful market penetration in CCTV and
on-board IoT technology.
In addition to strong organic growth targets, the Company also maintains an
active interest in seeking bolt-on acquisitions where the target businesses
provide access to markets for our core technologies and capabilities.
Brexit and Covid-19
The Group has had to adjust to the changes brought about by major external
events sequentially; first the pandemic and the subsequent resulting impacts
on global supply chains.
The largest direct impacts have been in our ability to reliably source high
quality semiconductors and display components that are vital to building our
solutions. Extended delivery timescales, rising costs in raw materials and
labour continue to pose challenges for manufacture, assembly and installation
engineering.
Where possible, we have mitigated against many of these risks through advanced
purchase and stock holding, innovative design changes to avoid single source
components, diverse procurement and strong supply chain relationships.
Environmental, Social and Governance
The Group is committed to being a responsible member of the corporate
community and has, over the course of the year, engaged with external
consultants to set strategies and targets for our environmental, social and
governance activities. Our initial findings are included in the
sustainability section of the 2021 annual report. Throughout the course of
2021, the Company maintained all ISO accreditations.
People
Throughout the pandemic, we followed the prevailing Government advice to help
ensure the safety of all our people, who have shown great flexibility and
dedication to ensure the continued support of our customers throughout.
Everyone in the Group has played an important role in building the
capabilities that are positioning Journeo as an industry sector leader and
help capture an increasing share of a market that is transitioning from
proprietary or closed hybrid systems to open, standards-based, IoT solutions.
I would like to take this opportunity to thank everyone for their commitment
and attention to detail and look forward to working with them as we enter an
exciting and successful period for the Group over the next few years.
Outlook
The performance of the Group through a time of unprecedented global challenges
has been admirable and we continue to make solid progress. Journeo showed
great resilience throughout 2021 and local authority and fleet operator
customers are re-engaging with renewed momentum.
Indications are that many of the issues affecting global supply chains,
particularly microprocessor and displays manufacture continue to pose
challenges, however. projects that were temporarily suspended or delayed are
restarting, such as the £2.1m second phase of the City of Edinburgh real time
project announced in March 2022.
The increasing adoption of our IP and technologies from flagship customers in
the last 18 months reinforces our conviction that a customer-led, applied
development strategy is the correct one; and moreover, that it is working.
Strong performance from our factory and delivery teams in Q4 2021 has been
bolstered in Q1 2022 by good order intake and a significant pipeline of future
sales opportunities into 2023 and beyond.
Public transport continues to be a major focus for the UK Government, and we
look forward to learning more in the anticipated announcements of the
successful bidders for key funding streams such as ZEBRA and the National Bus
Strategy for England later this year.
Over the last 12 months, the Group has managed to mitigate many of the
component supply chain issues and continues to meet customer expectations for
delivery. However, the situation may be exacerbated by the conflict in
Ukraine, and is an area where we remain particularly vigilant.
We continue to evaluate complementary or bolt on acquisitions where our
technologies, software and core capabilities, that we continue to invest in,
can add value. The Board remains focused on delivering ambitious growth
plans and, the significant Government funding, plus increased adoption of our
technologies and software underpin our confidence in meeting these objectives.
Mark Elliott
Non-Executive Chairman
Chief Executive's Report
Introduction and strategy update
The continued adoption of our technologies and software solutions by flagship
customers demonstrates the significant progress we are making.
The transport sector has faced many challenges in recent years, where the
number of new bus registrations were lower than the historic norm, even before
the global pandemic as a result of the reduction in passenger numbers.
The collective impact of these and other industry-specific events has been
partially responsible for creating the circumstances for our software and
services to thrive. For example, where fleet operators' have been seeking to
prolong the life of their vehicles, Journeo has been able to provide a
solution to increase system availability on legacy fleets through Remote
Condition Monitoring. Whilst the global pandemic limited fleet operators
ability to access CCTV images directly from vehicles, Journeo delivered
secure, cloud-based access to vital evidence. And whilst the reduction in
passenger numbers reduced fleet operator margins, Journeo has delivered
innovative camera monitoring systems that improve safety and further reduce
fleet operating costs.
The deep and trusted customer bonds and our technical agility enable us to
pivot our core technology quickly to resolve customer needs, and our
engineering excellence ensures that we can deliver solutions that are crucial
to operators and infrastructure managers in challenging operating
environments.
During the year we secured a number of strategically important wins, including
a three-year contract with Arriva to connect 4,700 of their UK buses, which is
the largest single deployment of our SaaS-based solutions to date. Further
penetration into airports was gained with the win at Heathrow, the third
busiest airport in the world by international passenger traffic, and we
expanded our passenger information systems along key transport corridors
throughout Wales.
Over the last four years we have invested over £5m into R&D and this
run-rate will continue, fueled by increased customer interest in our
technology and significant market drivers to encourage sustainable and carbon
zero transport solutions.
Operational review
Passenger Infrastructure Systems
Local authorities have been delivered one of their biggest challenges in
recent times by the UK Government. The National Bus Strategy for England (Bus
Back Better published March 2021) paved the way for Enhanced Partnerships (EP)
with operators and access to greater levels of funding from central Government
to meet these ambitious plans. However, to achieve this, local authorities
and transport executives were required to complete extensive Bus Service
Improvement Plans (BSIPs) to access new funding.
One side-effect from this was the delay in some expected projects taking place
as customers worked to complete and submit their BSIPs. As a result, we
experienced a 7% fall in revenues to £6.3m (2020: £6.8m) which is
disappointing as it masks the significant groundwork that was laid with
customers in support of their BSIPs and the future projects that are expected
to emerge. The sales process for infrastructure projects can be protracted and
difficult to predict, but the early signs in 2022 are that we will see a
return to growth in the coming year.
The announcement made in January for a £1.3m award from a northern transport
partnership demonstrated the interest in our real time information displays
and content management software. Part of a tranche 2 order from the £2.4bn
Transforming Cities Fund (TCF), our solution forms part of a continuing
commitment by the customer to enhance their passenger information solutions
which we anticipate will continue to grow in future. Our accurate and
intuitive systems have been well received and we will shortly be expanding the
features and capabilities to include disruption messaging and up-to-the-moment
travel information to passengers.
In November 2021, we completed the site acceptance testing and handover of
City of Edinburgh Bus Station. The project had experienced delays due to
regional travel restrictions but was completed shortly after these were
lifted. This milestone is a gateway for the Edinburgh team to access the
second phase, referred to as Lot 2 of the contract where we will deliver our
latest high contrast optically bonded display technology throughout Scotland's
capital city. We were delighted to be able to announce our first orders
under Lot 2 in March 2022, valued at £2.1m.
Ensuring that our solutions support customers' aims to achieve carbon
neutrality is a major focus in our product development. In March 2021, we
announced an award valued at £1.1m, for solar-powered displays in key
transport corridors in Wales. Since then, we have developed lower power
solutions. We currently have trials taking place of our next generation
ultra-low power solutions, that have the potential of a 7-year running time
without intervention, or extended indefinitely by the addition of solar energy
and wind turbine, with recyclable battery technology. The expansion of our
systems into key transport corridors in Wales has continued, and a further
contract award of £0.8m was announced in December 2021, positioning Journeo
well for future opportunities with Transport for Wales (TfW).
Estimates for the level of funding available as part of the National Bus
Strategy for England have been revised down since its initial announcement, as
a result of funding the Covid-19 Bus Service Support Grant (CBSSG) and its
replacement Bus Recovery Grants (BRG) schemes to support networks throughout
the Covid-19 pandemic (initial estimates c. £3bn vs. current estimates c.
£1.4bn), but there is still cause for optimism. A green and sustainable
recovery to meet the Governments' Net Zero carbon goals will be reliant on
encouraging the mass movement of people away from personal-use vehicles and on
to clean and efficient public transport. This will undoubtedly require
investment in transport infrastructure projects that have underpinned our
success and we expect this will increase in the coming years.
Fleet Transport Operator Systems
Last year proved to be a significant year for our Fleet Transport Operator
Systems business with revenue increasing by 36% to £9.3m (2020: £6.8m). The
increased level of SaaS-based subscriptions within the business mix helped
increase the underlying profit to £0.7m (2020: £0.1m), demonstrating the
value that our innovative solutions are delivering to our customers.
In our Annual Report for 2020 we included reference to a 200-system trial of
our IoT technology with Abellio London. We were delighted in July 2021 to
announce the trial was a success with a three-year £0.5m SaaS framework. The
cost of the solution is being funded through operational savings and
efficiencies which further underscores the attractive Return On Investment
(ROI) that Journeo's agile software and cloud-based solutions provide.
Abellio's decision to adopt our technology fleet wide on around 900 buses was
our largest single deployment in London. This was swiftly followed by an
announcement that Journeo will be the preferred supplier for legacy and new
CCTV systems for Metroline, with a fleet of 1,500 buses that form part of
ComfortDelGro, further extending our presence within London, where
approximately one third of all buses in England operate.
In November 2021, we announced a three-year SaaS contract award from Arriva UK
Bus, adding an additional 4,700 connections to our cloud-based platforms. The
roll-out and installation of our complementary IoT technology will complete
during 2022 and will take the number of vehicles connected to our platform to
over 10,000 by the end of 2022. Since its launch in November 2019, Journeo
Portal is gaining popularity and we look forward to further adoption as a
number of other operators are currently evaluating the application.
This success is not limited to bus and coach, however. Whilst announced just
after the financial year end in January 2022 , the achievement of our small,
dedicated rail team in introducing our solution into the rail market
demonstrates the opportunities in adjacent and complementary markets for our
solutions. The £0.7m framework services award with GB Railfreight for fleet
wide deployment of our Forward-Facing CCTV system also includes the provision
of secure access to Journeo Portal for Network Rail and British Transport
Police, further enhancing the value of our software in highly regulated
environments.
Interest in Journeo's car park bussing and inter-terminal mobility systems in
airports also continues to grow. In September 2021 we announced the award of a
five-year contract at Heathrow Airport, valued initially at £2.5m, with
Transdev Airport Services where we will deliver vital operational management,
Real Time Information and on-vehicle technology services. With a growing
market share in airport mobility, Transdev are leaders in the airport shuttle
segment in the USA and have been providing mobility solutions at airports in
the UK for over 50 years.
Work has already begun to deliver our technology and services to Transdev for
existing vehicles with new vehicles expected to be delivered later this year.
We have also started the work to connect the existing car park and terminal
displays into our management platform. This will allow Transdev to provide
accurate real-time information to passengers and staff travelling to terminals
and on connecting services.
Central Services
Most of our people continued to work from home throughout 2021, as we adopted
a hybrid working model when Covid-19 restrictions permitted. Particular
attention was paid to team member engagement to prevent isolation issues
through a series of daily, weekly and monthly departmental virtual meetings
and regular on-line seminars that were open to everyone in the Company. These
interactive events included presentations on the latest developments in
transport applications. The sessions proved to be very popular so are being
continued and now form part of our formal ISO workforce communication plan for
2022.
We also worked hard to maintain relationships with our supply chain partners
to ensure that where possible, we were able to access vital components and
maintain adequate stock levels required to meet our commitments.
2021 also provided the soft launch of our new Fault Management System,
allowing our systems to automatically raise support tickets should they
require an engineering visit. Initially rolled out to our flagship customer,
the City of Edinburgh, this new system enables our operations team to track
system performance down to component level, allowing them to identify trends
and work with our technical teams to mitigate future incidents. The system
is now gradually being rolled out to all customers.
Throughout the year, we have maintained all ISO accreditations and have now
added the Cyber Essentials accreditation, giving further assurance to our
customers that they are placing their data within a safe and secure
environment.
Russ Singleton
Chief Executive
Consolidated statement of comprehensive income for the year ended 31 December
2021
Notes 2021 2020
£'000 £'000
Revenue 2,3 15,592 13,605
Cost of sales (9,569) (8,304)
Gross profit 3 6,023 5,301
Underlying administrative expenses (5,557) (5,142)
Other income 2 168 305
Underlying profit 634 464
Share-based payments (49) (116)
Total administrative expenses and other income (5,438) (4,953)
Operating profit 585 348
Finance expense (176) (155)
Profit before taxation from continuing operations 409 193
Taxation (charge) / credit 4 (2) 2
Profit for the year being total comprehensive income attributable to owners of 407 195
the parent
Profit per share 5
Basic 4.65p 2.27p
Diluted 4.46p 2.26p
Consolidated statement of changes in equity for the year ended 31 December
2021
Share Share Retained Total equity
capital premium earnings shareholders'
£'000 account £'000 funds
£'000 £'000
Balance at 1 January 2020 6,217 958 (6,991) 184
Profit and total comprehensive income for the year - - 195 195
Proceeds from issue of new shares 33 216 - 249
Share-based payments - - 116 116
Balance at 31 December 2020 6,250 1,174 (6,680) 744
Profit and total comprehensive income for the year - - 407 407
Share-based payments - - 49 49
Balance at 31 December 2021 6,250 1,174 (6,224) 1,200
Consolidated statement of financial position at 31 December 2021
Notes 2021 2020
£'000 £'000
Assets
Non-current assets
Goodwill 1,345 1,345
Other intangible assets 1,166 1,144
Property, plant and equipment 565 619
Trade and other receivables 43 43
3,119 3,151
Current assets
Inventories 1,609 1,675
Trade and other receivables 5,931 4,207
Cash and cash equivalents 1,096 1,254
8,636 7,136
Total assets 11,755 10,287
Equity and Liabilities
Shareholders' equity
Share capital 6,250 6,250
Share premium account 1,174 1,174
Retained earnings (6,224) (6,680)
Total equity 1,200 744
Non-current liabilities
Deferred revenue 947 957
Other payables - 80
Loans and borrowings 604 564
Lease liabilities 261 358
Provisions 313 278
2,125 2,237
Current liabilities
Trade and other payables 3,499 3,332
Deferred revenue 3,408 3,061
Loans and borrowings 1,175 595
Lease liabilities 121 135
Provisions 227 183
8,430 7,306
Total equity and liabilities 11,755 10,287
Consolidated statement of cash flows for the year ended 31 December 2021
Notes 2021 2020
£'000 £'000
Net cash flows from operating activities 6 2 1,574
Cash flows from investing activities
Purchases of property, plant and equipment (165) (55)
Purchases / generation of intangible assets (460) (519)
Net cash flows from investing activities (625) (574)
Cash flows from financing activities
Cash flows from financing activities 642 (546)
Principal element of lease repayments (148) (168)
Repayment of loans (22) (6)
Issue of Shares - 249
Net cash flows from financing activities 472 (471)
Net (decrease) / increase in cash and cash equivalents (151) 529
Cash and cash equivalents at beginning of year 1,254 725
Effect of foreign exchange rate changes (7) -
Cash and cash equivalents at end of year 1,096 1,254
Notes to the consolidated financial statements for the year ended 31 December
2021
1. Basis of preparation
The Group financial statements are prepared in accordance with International
Financial Reporting Standards and IFRIC interpretations issued and effective
(or adopted early) and endorsed by the United Kingdom at the time of preparing
these financial statements and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The financial statements have
been prepared under the historical cost convention, except financial
instruments and share-based payments, which are prepared in accordance with
IFRS 9 and IFRS 2 respectively. A summary of the more important Group
accounting policies is set out below.
The individual financial statements of each Group entity are presented in the
currency of the primary economic environment in which the entity operates (its
functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each Group entity are
expressed in Sterling (£), which is the presentation currency for the
consolidated financial statements. The numbers in the financial statements are
rounded in £'000 for presentation purposes.
Going concern
The Group's business activities, together with factors likely to affect its
future development, performance and position, are set out in the Strategic
Report along with the principal risks and uncertainties.
The Group's net underlying profit for the year was £634k (2020: £464k). As
at 31 December 2021 the Group had net current assets of £206k (2020: £170k
liability) and net cash reserves of £1,096k (2020: £1,254k).
In December 2021, the 2016 Loan Notes and the 2018 Loan Notes maturity dates
were extended to 31 March 2023.
The Directors have prepared Group cash flow projections for the period to 30
June 2023 based on latest forecasts that show that the Group will be able to
operate within the Group current funding resources with significant headroom.
As with all businesses there are particular times of the year where our
working capital requirements are at their peak. The Group is well placed to
manage these business risks effectively and the Board reviews the Group's
performance against budgets and forecasts on a regular basis to ensure action
is taken where needed. The Directors also monitor a rolling cash flow
forecast, and key management review working capital movements and requirements
on a daily basis.
The projections, taking account of reasonably possible changes in trading
performance, indicate that the Group will operate within available facilities
throughout the projection period and therefore, based on these projections,
the Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future and
for at least twelve months from the date of these financial statements. The
directors therefore continue to adopt the going concern basis in preparing the
financial statements.
2. Revenue
The revenue split between goods and services is:
2021 2020
£'000 £'000
Goods 10,615 9,417
Services 4,977 4,188
15,592 13,605
Contract works included in goods 5,520 5,332
The other income is split as follows:
2021 2020
£'000 £'000
R&D Tax credit 168 267
Furlough Income - 38
168 305
3. Segmental reporting
IFRS 8 requires operating segments to be determined on the basis of those
segments whose operating results are regularly reviewed by the Board of
Directors (the Chief Operating Decision Maker as defined by IFRS 8) to make
strategic decisions.
As the Board of Directors reviews revenue, gross profit and operating loss on
the same basis as set out in the consolidated statement of comprehensive
income, no further reconciliation is considered to be necessary.
Revenue and gross profit
Revenue Gross profit Revenue Gross profit
2021 2021 2020 2020
£'000 £'000 £'000 £'000
Fleet Systems 9,290 2,919 6,827 2,147
Passenger Systems 6,302 3,104 6,778 3,154
Total 15,592 6,023 13,605 5,301
Major customers
In the year, one customer within the Fleet Systems segment accounted for over
10% of Group revenue at 13% and no customers within the Passenger Systems
segment. In the prior year, there was one Passenger Systems customer that
accounted for over 10% of revenue at 10% and no major customers within the
Fleet Systems segment.
Underlying profit
2021 2020
£'000 £'000
Fleet Systems 698 81
Passenger Systems 339 634
1,037 715
Central (403) (251)
Underlying profit 634 464
Reconciling to profit / (loss) before interest and tax
2021 Underlying Share-based Operating Profit / (loss)
operating payments profit / (loss) before interest
profit / (loss) £'000 £'000 and tax
£'000 £'000
Fleet Systems 698 (24) 674 674
Passenger Systems 339 (25) 314 314
1,037 (49) 988 988
Central (403) - (403) (403)
634 (49) 585 585
2020 Underlying Share-based Operating Profit/(loss)
operating payments profit / (loss) before interest
profit / (loss) £'000 £'000 and tax
£'000 £'000
Fleet Systems 81 (58) 23 23
Passenger Systems 634 (58) 576 576
715 (116) 599 599
Central (251) - (251) (251)
464 (116) 348 348
Net assets attributed to each business segment represent the net external
operating assets of that segment, excluding goodwill, bank balances and
borrowings, which are shown as unallocated amounts, together with central
assets and liabilities.
Net assets
Assets Liabilities Net assets Assets Liabilities Net assets
2021 2021 2021 2020 2020 2020
£'000 £'000 £'000 £'000 £'000 £'000
Fleet Systems 5,193 (3,216) 1,977 3,599 (2,932) 667
Passenger Systems 4,109 (5,449) (1,340) 4,077 (5,372) (1,295)
9,302 (8,665) 637 7,676 (8,304) (628)
Goodwill 1,345 - 1,345 1,345 - 1,345
Cash and borrowings 1,096 (1,779) (683) 1,254 (1,159) 95
Unallocated 12 (111) (99) 12 (80) (68)
Total 11, 755 (10,555) 1,200 10,287 (9,543) 744
Geographical segments
Revenue Gross profit Revenue Gross profit
2021 2021 2020 2020
£'000 £'000 £'000 £'000
UK 15,070 5,602 13,025 4,923
International
- Scandinavia 457 520
- Other EU 43 52
- Non-EU 22 8
Total international 522 421 580 378
Total 15,592 6,023 13,605 5,301
Assets and liabilities by location
2021 2020
£'000 £'000
Assets
UK 11,720 10,265
International 35 22
Total assets 11,755 10,287
Liabilities
UK (10,532) (9,533)
International (23) (10)
Total liabilities (10,555) (9,543)
All non-current assets are located within the United Kingdom.
4. Taxation
(a) Analysis of charge / (credit) in year:
2021 2020
£'000 £'000
Current tax
UK corporation tax on the loss for the year (19%) - -
Swedish corporation tax on the profit for the year (22%) - -
Prior year under provision 2 7
Deferred tax credit
- Temporary differences on acquisition - (9)
Total tax charge / (credit) for the year 2 (2)
(b) Factors affecting the total tax charge / (credit) for the year
The tax assessed for the year differs from the standard rate of corporation
tax in the UK at 19% (2020: 19%). The differences are explained below:
2021 2020
£'000 £'000
Profit on ordinary activities before tax 409 193
Profit on ordinary activities multiplied by standard rate of 78 37
corporation tax in the UK of 19% (2020: 19%)
Effects of:
Expenses not deductible for tax purposes (139) (4)
Change in unrecognised deferred tax assets 93 15
Income not taxable (32) (57)
Prior year under provision 2 7
Total tax charge / (credit) for the year 2 (2)
(c) Deferred tax asset / (liability)
The unrecognised and recognised deferred tax assets / (liability) comprise the
following:
Group Unrecognised Recognised
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Tax losses 1,116 841 - -
Accelerated capital allowances (91) (47) - -
1,025 794 - -
The Group has £4,466,000 of unutilised tax losses (2020: £4,425,000) which
may be carried forward indefinitely. On 3 March 2021, the Chancellor of the
Exchequer announced that the corporation tax rate would increase to a maximum
of 25% from 1 April 2023.
5. Profit per Ordinary Share
Basic earnings per share (EPS) is calculated by dividing the earnings
attributable to Ordinary Shareholders by the weighted average number of
Ordinary Shares in issue during the year.
For diluted earnings, the weighted average number of Ordinary Shares in issue
is adjusted to assume conversion of all dilutive potential Ordinary Shares.
Group 2021 2020
Profit Per share Profit Per share
£'000 amount £'000 amount
Pence Pence
Basic EPS
Profit attributable to Ordinary Shareholders 407 4.65p 195 2.27p
Diluted EPS
Profit attributable to Ordinary Shareholders 407 4.46p 195 2.26p
Details of the weighted average number of Ordinary Shares used as the
denominator in calculating the earnings per Ordinary Share are given below:
2021 2020
'000 '000
Basic weighted average number of shares 8,741 8,610
Dilutive potential Ordinary Shares 370 29
Diluted weighted average number of shares 9,111 8,639
6. Reconciliation of operating profit to net cash inflow from operating
activities
2021 2020
£'000 £'000
Profit for the year 407 195
Adjustments for:
- Finance expense 176 155
- Deferred tax credit - (9)
- Depreciation of property, plant and equipment 218 209
- Amortisation of intangible fixed assets 438 429
- Share-based payment expense 49 116
- Foreign exchange rate (15) 17
- Increase / (decrease) in provisions 79 (34)
Operating cash flows before movement in working capital 1,352 1,078
(Increase) / decrease in inventories 66 (404)
Increase in receivables (1,724) (280)
Increase in payables 450 1,317
Cash inflow from operations 144 1,711
Income taxes paid (2) (7)
Interest paid (140) (130)
Net cash inflow from operating activities 2 1,574
7. Availability of audited accounts:
Copies of the 2021 audited accounts will be made available following the
announcement of the date of our AGM. They will also be available on the
Group's website (www.journeo.com (http://www.journeo.com/) ) for the purposes
of AIM Rule 26 and will be posted to shareholders in due course.
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