REG - Tracsis PLC - Contract signed for Tap Converter system

TracsisAnnouncement

19/02/2025 07:15

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RNS Number : 5971X  Tracsis PLC  19 February 2025

19 February 2025

 

Tracsis plc

("Tracsis" or "the Group")

 

Contract signed for pay-as-you-go Tap Converter system

 

Tracsis (LSE: TRCS), a leading transport technology provider, is pleased to
announce that, further to the announcement of Preferred Bidder status on 26
November 2024,  it has signed a multi-year contract with Rail Settlement
Plan, a division of Rail Delivery Group (RDG), to implement the core Tap
Converter system that will power pay-as-you-go (PAYG) travel in urban areas
across National Rail, processing all related transactions and fare
calculations.

 

Highlights

 

·      Major contract win, through a competitive bid process, to provide
the central smart ticketing technology platform enabling PAYG travel in urban
areas across National Rail.

·      The nationwide rollout of PAYG is central to the UK Government's
stated vision for modernising rail travel with ticketing simplification and
innovation high on its agenda.

·      Six Train Operating Companies (TOCs) on the National Rail network
currently use Tracsis' smart ticketing technology. This contract provides a
long-term revenue opportunity as TOC and consumer adoption grows.

·      All Tracsis development activities are fully funded. Once
deployed, the contract delivers a guaranteed minimum annual operating fee with
additional transaction revenues based on the volume of PAYG transactions
processed.

·      Development starts immediately with deployment and transactional
revenue generation expected to begin in 2026.

 

Background

 

The Tap Converter system will be a centralised smart ticketing technology
platform that processes 'tap' data from various sources such as smartcards,
contactless bankcards and mobile apps/barcodes when passengers tap in and out
at stations. It will also integrate with multiple modes of transport,
supporting the delivery of London style PAYG ticketing for rail, bus and tram
travel.

 

Tracsis will utilise its existing technology to construct journeys from these
taps calculating the best fare while automatically applying entitlements,
concessions, discounts and fare caps. Once calculated, the system provides
this fare information to the TOC to charge the passenger and submits
settlement records to the rail industry's settlement engine.

 

Tracsis is currently the only provider of an accredited PAYG ticketing
platform on the National Rail network outside London, and this contract
significantly extends the potential reach of Tracsis' technology. With the
government and industry-wide push towards smarter, more flexible digital
ticketing, PAYG adoption is expected to expand across the network, though the
pace will vary by operator and region.

 

Timeline, Opportunity and Revenue Model

 

Tracsis has begun a period of funded development with deployment expected to
begin in 2026. The six TOCs currently offering a PAYG solution using Tracsis'
technology will continue to do so during this period.

 

Once the Tap Converter system is operational, Tracsis revenues will be based
on the volume of transactions processed and this will be driven by future
customer adoption rates and system usage.

 

A total of 1.7 billion rail passenger journeys were recorded across Great
Britain in the 12 months to September 2024(1). Tracsis estimates that PAYG
transaction volumes using the Tap Converter system could in the medium term
equate to 10-15% of total annual passenger journeys with commuters expected to
drive the highest adoption rates.

 

In 2024, Tracsis processed 2.25 million PAYG journeys. With the recent go-live
of new PAYG deployments in Wales (contactless EMV) and Scotland (Tap&Pay)
we expect to see accelerated growth in passenger journeys over the coming
months ahead of the deployment of the Tap Converter system.

 

Transaction revenues from the Tap Converter system will start to accrue
following deployment which is forecast to start in 2026. There is no change to
the Board's expectation for the year ending 31 July 2025 following this
contract win and Tracsis will issue its trading update on H1 performance on 26
February 2025.

 

Chris Barnes, Chief Executive Officer of Tracsis, commented:

 

"We are delighted to be working with the Rail Delivery Group and Great British
Railways Transition Team (GBRTT) to deliver this important pay-as-you-go
ticketing solution on a nationwide basis. The contract represents a major
milestone in our smart ticketing technology journey, with the potential to
grow into a valuable, long-term partnership over time.

 

Digital transformation remains integral to the rail industry's future. The
Government has made a commitment to expand pay-as-you-go ticketing across
urban areas on the National Rail network and the Tap Converter system will
position Tracsis as an important technology provider at the heart of this
transformation."

Stewart Fox-Mills, Fares, Ticketing and Retail Programme Director at GBRTT and
RDG, commented:

"We are working with industry partners to simplify the railway fares and
ticketing system, making travel more convenient and flexible for all
passengers. We are committed to developing a simpler fare system that
enhances the overall customer experience and supports the long-term growth of
rail travel.

The delivery of pay-as-you-go ticketing in urban areas is a high priority and
we look forward to working with Tracsis on delivering the Tap Converter system
that will provide the technical foundation for pay-as-you-go ticketing in
urban areas."

 

(1) Source: Office of Rail and Road passenger rail usage data (published 19
December 2024) Passenger rail usage | ORR Data Portal
(https://dataportal.orr.gov.uk/statistics/usage/passenger-rail-usage/)

 

Enquiries:

 Tracsis plc                                                              +44 (0)845 125 9162

 Chris Barnes, CEO

 Andy Kelly, CFO

 Berenberg (Nominated Adviser, Corporate Broker & Financial Adviser)      +44 (0)20 3207 7800

 Mark Whitmore / Richard Andrews / Mollie D'Arcy Rice

 James Thompson (QE)

 Alma Strategic Communications                                            +44 (0)20 3405 0205
 David Ison / Rebecca Sanders-Hewett / Joe Pederzolli

                                                                          tracsis@almastrategic.com

 

Notes to editors:

 

·      Tracsis plc is a technology company and a leading provider of
software and hardware products, data capture and data analytics/GIS services
for the rail, traffic data and wider transport industries.

 

·      Tracsis's products and services are widely used to increase
efficiency, reduce cost and risk, improve operational and asset performance,
improve safety management and decision making capabilities and improve the
overall end-user experience for clients and customers.

 

·      The Group is split into two principal operating areas built
around detailed industry knowledge and expertise:

 

-      Rail Technology & Services:  A software, technology and
product led business. It develops and supplies software that solves complex
resource, asset optimisation and control problems for Train Operators, and
smart ticketing, delay repay and other retail software to improve the customer
experience for rail users. It also develops remote condition monitoring
hardware, data acquisition software, and safety and risk management software
for rail infrastructure providers.

-   Data, Analytics, Consultancy & Events: A largely services led
business that focuses on data capture, data analytics, GIS, earth observation,
data insights, consultancy and event traffic management within a range of
transport and pedestrian rich environments. The business provides technology
and bespoke products and data that underpin large scale intelligent transport
systems, smart city planning and positive environmental decision making.

 

·      Tracsis has a blue-chip client base which includes all major UK
transport owning groups, Network Rail, Passenger and Freight Train Operating
Companies, the Department for Transport, TfL, multiple local authorities,
major outdoor music and sporting event organisers, and a wide variety of large
engineering and infrastructure companies. In North America our clients include
Class 1 rail freight companies, transit operators, shortline railroads and
several large rail served ports and industrials.

 

·      The business drives growth both organically and through
acquisition and has made seventeen acquisitions since 2008.

 

For more information on Tracsis please visit http://www.tracsis.com
(http://www.tracsis.com)

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