REG - Tracsis PLC - Interim Results
24/04/2025 07:02
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RNS Number : 9471F Tracsis PLC 24 April 2025
24 April 2025
Tracsis plc
('Tracsis', 'the Company' or 'the Group')
Unaudited Interim results for the six months ended 31 January 2025
Group fundamentals remain strong despite lower H1 financial performance
Ongoing growth in annual recurring revenues
Tracsis plc (LSE: TRCS), a leading transport technology provider, is pleased
to announce its unaudited interim results for the six months ended 31 January
2025.
Financial Highlights:
Financial Results (£'m) H1 25 H1 24
Revenue 36.3 36.6 -1%
Adjusted EBITDA * 3.8 5.7 -33%
Adjusted EBITDA * % 10.5% 15.5% -504bps
Cash 22.1 16.8
Adjusted diluted earnings per share * 7.7p 10.3p -25%
Statutory Results
Operating loss (1.1) (0.3) -267%
Loss before tax (0.7) (0.3) -133%
Basic loss per share (1.5p) (1.6p) 7%
Interim dividend per share 1.2p 1.1p +9%
· H1 performance impacted by three key headwinds as previously
communicated:
1. Control Period 7 ("CP7") funding shortfalls led to a 57% reduction in UK
Remote Condition Monitoring ("RCM") hardware revenues
2. Cyber-attack at major UK transport authority left it unable to place any
contract work for four months, resulting in a c.50% reduction in Traffic Data
revenues from that customer
3. Lower profitability in Traffic Data and Events from inflationary input cost
increases; pricing and cost actions underway, with the initial benefits
expected in H2 FY25
· Revenues up 2% (£0.7m) excluding H1 FY24 Transport Consultancy
revenue no longer pursued(1)
o Rail Technology & Services revenue up 2% (£0.3m) despite CP7 headwinds;
growth across UK product categories apart from RCM
o Data, Analytics, Consultancy & Events like-for-like revenue(1) up 2%
(£0.4m)
· Adjusted EBITDA impacted by:
o c.£0.6m additional contribution from growth in Rail Technology & Services
(ex-CP7 headwind)
o c.£1.5m reduction from CP7 headwind and customer cyber-attack impact
o c.£1.0m reduction from Traffic Data and Events
· Healthy cash generation and strong balance sheet to invest in
growth
· £3m share buyback programme launching later today and
progressive dividend policy maintained
Strategic Highlights:
· Ongoing growth in recurring software revenues:
o Rail Technology & Services recurring licence revenue(2) up 7% to £10.0m
o Consumer-driven Pay-As-You-Go ("PAYG") and delay repay transactional
revenue(3) up 18% to £2.0m
· Key Rail Technology product deployments driving recurring revenue
growth and international diversification:
o Operations & Planning:
§ First UK intercity TRACS Enterprise deployment completed; first UK light rail
deployment completed post period-end
§ First full deployment of Positive Train Control variant of Train Dispatch
product with US commuter rail provider completed
o Customer Experience:
§ Expanded contactless PAYG smart ticketing in South Wales; launched ScotRail
PAYG app
o Safety & Risk Management:
§ RailHub functionality expansion across Network Rail continued
· Multi-year contract wins post period-end support future revenue
growth:
o Customer Experience:
§ Tap Converter contract with Rail Delivery Group to provide the central smart
ticketing technology platform enabling PAYG travel in urban areas across UK
National Rail
o Safety & Risk Management:
§ New Network Rail programme for RailHub development through H2 FY25, FY26 and
beyond
FY25 Outlook:
· UK Rail market uncertainty expected to persist into FY26, with a continued
impact on near-term procurement timelines in RCM and Operations and Planning
· Impact of recently announced US tariffs on procurement activity by rail-served
ports, freight operators and industrials in North America is currently unclear
· Without further material contract wins, the Board expects FY25 adjusted EBITDA
to be in the range £12.5m - £13.5m
· Focus remains on growing recurring software licence and consumer-driven
transactional revenues whilst continuing to diversify internationally
Chris Barnes, Chief Executive Officer, commented:
"H1 FY25 performance was disappointing, however the factors behind this will
not persist long-term and where possible we have taken action to address them.
With a confirmed orderbook and seasonally higher activity levels, we are
confident that we will deliver an improved financial performance in H2.
We are making good progress against our strategic objectives: focusing the
business on higher-margin technology solutions; growing annual recurring and
transactional revenues; and expanding our international presence. This is
supported by strategic M&A and R&D investments alongside the work we
have done to transform our operating model.
The long-term demand for data-driven, customer-focused and safety-critical
solutions in our end markets remains strong, despite the near-term headwinds.
With a clear strategy, robust core of recurring revenue, healthy cash
generation and a strong balance sheet, we remain confident in the Group's
prospects".
Presentation and Overview videos
Tracsis is hosting an online presentation open to all investors on Friday 25
April 2025 at 1.00pm UK time. Anyone wishing to connect should register here:
https://engageinvestor.news/TRCS_IP25
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fengageinvestor.news%2FTRCS_IP25&data=05%7C02%7CAndrew.Kelly%40tracsis.com%7C1bef725b15a8411f8e7308dd81763bd0%7C6b98f2667d234d0a8b8a7e4cf7fded86%7C0%7C0%7C638809067039009037%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C4000%7C%7C%7C&sdata=KB15CdrsE2yzhUh0ZSKerR5IFo%2Bho3OUlEKxmIhEkaQ%3D&reserved=0)
A video overview of the results featuring CEO Chris Barnes and CFO Andy Kelly
is available to view here: https://vimeo.com/1078021840/fa025c5c33?share=copy
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fvimeo.com%2F1078021840%2Ffa025c5c33%3Fshare%3Dcopy&data=05%7C02%7CAndrew.Kelly%40tracsis.com%7C10335ac732c5484bccfc08dd828afca2%7C6b98f2667d234d0a8b8a7e4cf7fded86%7C0%7C0%7C638810255666730041%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C4000%7C%7C%7C&sdata=RCauMucjyoscjn3yB2Zds0kek5CWd5%2FgZjry%2BR20j9s%3D&reserved=0)
Contacts
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 (mailto:tracsis@almastrategic.com)
The information communicated in this announcement is inside information for
the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
* In addition to statutory reporting, Tracsis plc reports alternative
performance measures ("APMs") which are not defined or specified under the
requirements of International Financial Reporting Standards ("IFRS"). These
metrics adjust for certain items which impact upon IFRS measures, to aid the
user in understanding the activity taking place across the Group's businesses.
APMs are used by the Directors and management for performance analysis,
planning, reporting and incentive purposes. A summary of APMs used and their
closest equivalent statutory measures is given in note 10.
(1) Excluding revenue from Transport Consultancy activities no longer being
pursued (H1 FY25: £0.2m, H1 FY24: £1.2m)
(2) Revenue from software licences where the product has been deployed with
the end customer. Includes annual renewals and multi-year contracts
(3) Revenue from processing consumer PAYG smart ticketing and delay repay
transactions
Management Overview
Summary
H1 performance impacted by three key headwinds as previously communicated
1. UK Rail CP7 delays. Slower-than-expected start to CP7 funding reduced UK RCM
hardware revenue by 57%, negatively impacting adjusted EBITDA by c.£1m. All
other Rail Technology project categories remain unaffected
2. Cyber-attack on key Traffic Data customer. A four-month pause in orders from
this customer reduced adjusted EBITDA by c.£0.5m. With the issue now resolved
we expect to see increased revenue from that customer in H2 of FY25
3. Lower Traffic Data and Events profitability. Due to inflationary input cost
increases not fully mitigated through pricing in the period, in part due to
the timing of when work is contracted. Actions have been taken to address this
and deliver increased profitability, including both operational and pricing
changes as well as tighter expenditure control. These will benefit H2 FY25
with the full positive impact expected in FY26
Growth in Rail Technology recurring revenue
· Rail Technology & Services recurring software licence revenue increased by
7% to £10.0m, driven mainly by growth in the UK including a successful TRACS
Enterprise deployment and other contract wins
· Consumer-driven transaction revenue increased by 18% to £2.0m following FY24
PAYG and delay replay deployments
· Advanced the funded RailHub development roadmap across Network Rail, with
additional development programmes awarded post period-end for work commencing
in H2 FY25 and continuing into FY26 and beyond
· Secured significant multi-year Tap Converter contract with the Rail Delivery
Group post period-end, embedding Tracsis' ticketing technology as the
back-office solution for a UK rollout of PAYG on the National Rail network
Improved profitability expected in H2 supported by strong fundamentals
· Rail Technology & Services has a large installed base with transport
operators and infrastructure owners, driving significant recurring software
revenue. This is unaffected by near-term market headwinds
· Post period-end we have secured Rail Technology & Services contract
renewals in line with expectations, some of which are multi-year
· Data, Analytics, Consultancy & Events has a high level of repeat revenue
with a consistent seasonal H2 weighting
· The Group's cash generation remains healthy, underpinned by the base of
recurring and repeat revenue across both divisions
North America remains a key strategic priority despite slower than
anticipated progress
· First full deployment of a Positive Train Control variant of Train Dispatch
solution with a US commuter rail provider completed in H1 of FY25
· Healthy pipeline of similar contracts with passenger, freight & industrial
operators, though progress in securing them has been slower than anticipated
and timelines remain subject to evolving customer requirements
· During the period we also delivered an RCM hardware and software expansion
with a US transit customer
· We have further reduced our cost base in North America during H1 FY25 while
maintaining the ability to win and deliver future contracts
· We remain confident of the long-term opportunity in this market where the
industry is actively looking for new participants
Outlook
Rail headwinds likely to persist into FY26
· We expect RCM hardware volumes to return closer to historical levels as CP7
progresses and as larger infrastructure investment projects are approved by
Network Rail, however the timing of this remains uncertain. We do not expect a
full recovery within FY25
· While Tracsis' products and services are well aligned with the UK government's
strategic plans for the future of UK Rail, the proposed renationalisation of
Train Operating Companies ("TOC's") alongside the creation of Great British
Railways is driving extended procurement timelines
· The impact of US tariffs on procurement activity from rail-served ports,
freight operators and industrials in North America is currently unclear
· The Group's customer experience and safety & risk management activities
are unaffected by near-term market headwinds. In both product categories we
have been awarded new work post period-end that will deliver revenue through
H2 FY25 and beyond
Revised FY25 guidance
· Given the continued near term uncertainty in
the rail market resulting from the external factors
outlined above, the Board has reviewed its expectations
for FY25 based on a scenario that
assumes:
o Delivery of the confirmed orderbook of work for the remainder of FY25
o No material change in CP7 funding in H2 and therefore no increase in RCM
hardware volumes versus the H1 FY25 run rate
o No material new contract wins in the UK TOC market or North America given
extended procurement processes
o For those parts of the Group with short order lead times, run rate activity
levels for the remainder of FY25 consistent with historical trends
· Applying these assumptions the Board expects to
deliver FY25 adjusted EBITDA in the range of
£12.5m - £13.5m, with an H2 weighting underpinned by the
Rail Technology & Services orderbook
and the seasonality of activity levels in Data, Analytics,
Consultancy & Events
Growth Strategy
Favourable long-term macro trends and an unchanged strategy
· Strong, enduring market drivers in the UK, North America and other
international markets as transport industries modernise and adopt digital
solutions that increase efficiency, enhance performance, increase productivity
and improve safety
· Tracsis is well positioned to capitalise on structural trends, with proven
technology, deep sector expertise, and a track record as a trusted partner to
transport operators, infrastructure providers and government agencies
· Successful organisational transformation over the past two years has
strengthened the Group's resilience, improved revenue quality and enhanced its
ability to secure strategic, multi-year opportunities that support long-term
growth
· Focused on scaling the business and growing recurring revenues from software
licence and consumer-driven transactions, driving long-term growth and margin
accretion
Four strategic pillars for sustainable and profitable growth
1. Embed a product-focused business model
· Built around a smaller number of scalable
application software platforms
· Ongoing portfolio discipline, focused on higher
margin transport technology solutions
2. Growth in recurring revenues
· Focus on growth in software licence revenue and
consumer-driven transactions
· Grow and convert the pipeline of software
opportunities in UK and North America
3. Margin accretion and strong cashflow
· Application software product portfolio will
accelerate time to market
· Complete the implementation of a global delivery
model to remove duplication
4. Investment in R&D and M&A
· R&D investment to further modularise our
products and to access international markets
· Supplement organic growth with M&A focused on
high margin recurring revenue growth
Capital allocation to deliver long-term shareholder value
The Group's cash balance, robust fundamentals and healthy cash generation
position it well to continue to invest in growth. We will allocate capital in
line with our growth strategy, with a clear focus on growing high margin
recurring revenues:
1. Organic Growth
· Capex and working capital to support
operational delivery
· R&D investment to further consolidate
our product portfolio around core, modular application
software platforms, and to access international
markets
2. M&A
· Disciplined criteria focused on recurring
revenue growth, earnings accretion and cash generation
· Acquisitions integrated into the Group's
global delivery model
· Portfolio discipline to focus on core
activities and assets
3. Returns to Shareholders
· Maintain progressive dividend
· Surplus cash returned to shareholders
Share Buyback
The Board is confident in the Group's ability to deliver long-term sustainable
shareholder value and intends to launch a share buyback programme of up to
£3m.
Dividend
The Board remains committed to a progressive dividend policy. The Board has
declared an interim dividend of 1.2 pence per share which will be paid on 23
May 2025 to shareholders on the register at 9 May 2025. A final dividend of
1.3 pence per share was paid on 4 February 2025 in respect of the year ended
31 July 2024.
Jill Easterbrook Chris Barnes
Non-Executive Chair Chief Executive Officer
24 April 2025
Financial Overview
Trading Performance
Total Group revenue of £36.3m was 1% (£0.3m) lower than in the prior period.
After adjusting for non-repeating revenue from the Transport Consultancy
activities no longer being pursued as previously announced, revenue on a
like-for-like basis(1) was 2% (£0.7m) higher than the prior period. Rail
Technology & Services revenue increased by 2% (£0.3m) and Data,
Analytics, Consultancy & Events revenue increased by 2% (£0.4m) on a
like-for-like basis.
Adjusted EBITDA of £3.8m was 33% (£1.9m) lower than in the prior period,
with an adjusted EBITDA margin of 10.5% vs 15.5% in H1 FY24. The lower level
of profitability was driven by the near-term headwinds.
The impact of these headwinds on the Group's profitability was partly offset
by healthy profit growth in the Rail Technology & Services Division which
is benefiting from actions taken to streamline this business.
H1 delivered a statutory loss before tax of £0.7m (H1 FY24: £0.3m). In
addition to the £1.9m decrease in adjusted EBITDA described above, this
reflects:
· £0.7m non-recurring exceptional cash costs relating to the transformation of
the Group's operating model, mainly headcount reductions that were completed
after 31 July 2024 for operational reasons (H1 FY24: £1.3m);
· £1.1m depreciation charge and £2.7m amortisation of intangible assets, both
at similar levels to the prior period;
· £0.3m of share based payment charges (H1 FY24: £0.7m) lower than the prior
period due to the timing of awards; and
· £0.3m net finance income (H1 FY24: <£0.1m) reflecting returns on cash
balances.
The Group continues to have significant levels of cash and remains debt free.
Cash generation remains healthy. At 31 January 2025 the Group's cash balances
were £22.1m, which is £5.3m higher than the prior period (H1 FY24: £16.8m)
and £2.3m higher than at 31 July 2024.
Divisional Performance
Rail Technology & Services
Modest revenue growth despite near term CP7 headwinds, benefitting from a
large installed base of mission-critical solutions with continued progress in
long-term drivers of value.
Revenue £16.8m (H1 FY24: £16.5m) +2%
Recurring Software Licence Revenue (2) £10.0m (H1 FY24: £9.4m) +7%
Consumer-Driven Transactional Revenue (3) £2.0m (H1 FY24: £1.7m) +18%
Adjusted EBITDA* £3.0m (H1 FY24: £3.4m) -12%
Profit/(loss) before Tax £0.2m (H1 FY24: (£0.2m))
· Revenue increased by 2% (£0.3m)
o Rail Technology UK £15.0m +5% (£0.7m) vs H1 FY24. Growth in all product
categories except RCM hardware which declined due to previously signposted
Network Rail CP7 funding impact. H1 included the benefit from work to deliver
the next funded phase of RailHub to expand the functionality of this safety
and risk management system.
o Rail Technology North America £1.8m -18% (-£0.4m) vs H1 FY24. Lower level of
project delivery revenue following completion of the Train Dispatch deployment
during the period.
o Orderbook underpins further growth in H2 of FY25. We have an orderbook of work
including the benefit from the recent PAYG Tap Converter contract win and the
RailHub development programme that leaves us well placed to deliver further
revenue growth in H2 of FY25.
· Ongoing growth in recurring software licence revenue and revenue from
consumer activity
o Recurring software licence revenue £10.0m +7% (£0.6m) vs H1 FY24. Growth is
mainly in the UK from the Operations and Planning portfolio including the
benefit of the H1 FY25 TRACS Enterprise deployment and from other contract
wins.
o Consumer-driven transactional revenue £2.0m +18% (£0.3m) vs H1 FY24. Growth
is driven by new customer deployments completed during FY24 as previously
announced: two PAYG smart ticketing and one delay repay deployment.
· Adjusted EBITDA decreased by 12% (£0.3m)
o £1.0m adverse EBITDA impact from lower UK RCM hardware revenue
o Margin improvement across the rest of the portfolio
o Further cost out actions taken in North America during the period
· Profit before tax increased by £0.4m
o £0.6m transformation costs in H1 of FY25 mainly related to headcount
reductions in North America
o Benefit from lower transformation costs and an increased level of interest
received on cash balances
Data, Analytics, Consultancy & Events
Adverse margin impact from Traffic Data & Events. Actions taken to improve
profitability with the initial benefits expected during H2 of FY 25
Revenue £19.5m (H1 FY24: £20.1m) -3%
Like for like Revenue (1) £19.3m (H1 FY24: £18.9m) +2%
Adjusted EBITDA * £0.8m (H1 FY24: £2.2m) -64%
(Loss)/profit before Tax (£0.7m) (H1 FY24: £0.6m)
· Reported revenue decreased by 3% (-£0.6m)
o Reflects H1 FY24 revenue from Transport Consultancy activities no longer being
pursued. As previously announced, the Group is no longer pursuing certain non
software related low margin activities previously delivered through its
Transport Consultancy business. These delivered £0.2m revenue in H1 FY25 from
completion of the final projects in the orderbook, and £1.2m revenue in H1
FY24
· Revenue increased by 2% (£0.4m) on a like-for-like basis
o Driven by increased activity levels in Events. Activity levels remain high and
the business delivered record H1 revenue of £8.5m.
o One-off headwind from Traffic Data customer cyber-attack. As previously
announced, a large Traffic Data customer experienced a cyber-attack during H1
of FY25 and was unable to place work with the Group whilst this was rectified.
This issue has now been resolved and we expect to see a recovery in revenue
through the remainder of FY25.
· Adjusted EBITDA decreased by 64% (£1.4m)
o c.£0.5m headwind from cyber-attack suffered by a Traffic Data customer. The
one-off headwind described above resulted in adjusted EBITDA for H1 FY25 being
c.£0.5m lower than in H1 FY24.
o Actions taken to improve Traffic Data and Events profitability. There was a
significant decrease in gross margin across the Traffic Data and Events
businesses during the period, resulting in adjusted EBITDA for H1 FY25 being
c.£1.0m lower than in H1 FY24. This was caused by a sharp increase in input
costs across the supply chain that was not fully mitigated through pricing, in
part due to the timing of when work is contracted. We have taken actions to
address this and deliver increased profitability. These include operational
changes, pricing, and close control of expenditure. We expect to deliver an
increased margin in both businesses during H2 of FY25 with the full benefit of
these actions being delivered in FY26.
· Loss before tax of £0.7m is £1.3m lower than the prior period
o Reflects the lower level of EBITDA contribution partly offset by lower
transformation costs. Transformation Costs of £0.2m in H1 FY25 mainly relate
to the final headcount reductions from the Group transformation programme.
Cash Generation
Free cash flow increased to £2.3m (H1 FY24: £1.2m), despite the £1.9m
decrease in adjusted EBITDA described above. This included the benefit from
favourable working capital movements including the unwind of the large trade
receivables balance at 31 July 2024, a lower level of capital expenditure, a
lower level of tax paid reflecting the timing of instalments under the UK tax
regime, and a higher level of net interest received including the initial
benefit from actions taken to centralise cash management activities as part of
the Group transformation.
The Group is historically more cash generative in the second half of the year,
reflecting the timing of licence renewals and the seasonality of certain parts
of the Group.
Free Cash Flow*
Unaudited Unaudited Audited
Six months Six months Year
Ended Ended Ended
31 January 31 January 31 July
2025 2024 2024
£'m £'m £'m
Adjusted EBITDA * 3.8 5.7 12.8
Changes in working capital 0.9 (0.3) (0.5)
Purchase of property, plant and equipment (net of proceeds from disposal) (0.3) (0.9) (1.2)
Lease liability payments (net of lease receivable receipts) (0.7) (0.5) (1.4)
Capitalised development costs (0.4) (0.2) (0.5)
Tax paid (0.2) (1.3) (1.7)
Other (4) 0.2 - 0.2
Free cash flow before exceptional items 3.3 2.5 7.7
Cash outflows on exceptional items (1.0) (1.3) (2.3)
Free Cash Flow 2.3 1.2 5.4
* In addition to statutory reporting, Tracsis plc reports alternative
performance measures ("APMs") which are not defined or specified under the
requirements of International Financial Reporting Standards ("IFRS"). These
metrics adjust for certain items which impact upon IFRS measures, to aid the
user in understanding the activity taking place across the Group's businesses.
APMs are used by the Directors and management for performance analysis,
planning, reporting and incentive purposes. A summary of APMs used and their
closest equivalent statutory measures is given in note 10.
(1) Excluding revenue from Transport Consultancy activities no longer being
pursued (H1 FY25: £0.2m, H1 FY24: £1.2m)
(2) Revenue from software licences where the product has been deployed with
the end customer. Includes annual renewals and multi-year contracts
(3) Revenue from processing consumer PAYG smart ticketing and delay repay
transactions
(4) Includes net interest received or paid, profit on disposal of property,
plant and equipment, and proceeds from exercise of share options
Andy Kelly
Chief Financial Officer
24 April 2025
( )
(
)
( )
Tracsis plc - Condensed consolidated interim statement of comprehensive income
for the six months ended 31 January 2025
Unaudited six months ended 31 January Unaudited six months ended 31 January Audited year ended 31 July
2025 2024 2024
Notes £000 £000 £000
Revenue 3 36,308 36,582 81,022
Cost of sales (15,863) (14,520) (35,009)
Gross profit 20,445 22,062 46,013
Administrative costs (21,526) (22,370) (45,046)
Adjusted EBITDA (1) 3, 10 3,801 5,674 12,759
Depreciation (1,141) (1,144) (2,371)
Amortisation of intangible assets (2,744) (2,802) (5,526)
Other operating income - - 7
Share-based payment charges (276) (740) (899)
Operating (loss) / profit before exceptional items (360) 988 3,970
Exceptional items 4 (721) (1,296) (3,003)
Operating (loss) / profit (1,081) (308) 967
Net finance income 5 339 40 28
(Loss) / profit before tax (742) (268) 995
Taxation 285 (220) (507)
(Loss) / profit after tax (457) (488) 488
Other comprehensive income / (expense)
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences 433 194 (295)
Total comprehensive (expense) / income for the period (24) (294) 193
Earnings per ordinary share
Basic 6 (1.51p) (1.62p) 1.62p
Diluted 6 (1.51p) (1.62p) 1.59p
( )
(1) Earnings before net finance income, tax, depreciation, amortisation,
exceptional items, other operating income and share-based payment charges -
see note 10.
Tracsis plc - Condensed consolidated interim balance sheet as at 31 January
2025
Unaudited at 31 January Unaudited at Audited at 31 July
31 January
2025 2024 2024
Notes £000 £000 £000
Non-current assets
Property, plant and equipment 4,104 5,104 4,992
Intangible assets 50,529 55,242 52,610
Deferred tax assets 1,669 666 1,376
56,302 61,012 58,978
Current assets
Inventories 1,650 1,461 1,512
Trade and other receivables 13,479 13,605 21,536
Current tax receivables 663 1,609 1,011
Cash and cash equivalents 22,086 16,755 19,773
37,878 33,430 43,832
Total assets 94,180 94,442 102,810
Non-current liabilities
Lease liabilities 494 794 737
Contingent consideration payable 11 - 145 -
Deferred tax liabilities 6,416 6,909 7,132
6,910 7,848 7,869
Current liabilities
Lease liabilities 720 1,435 1,123
Trade and other payables 18,362 16,856 25,498
Contingent consideration payable 11 154 - 151
Deferred consideration payable - 314 -
Current tax liabilities - 126 -
19,236 18,731 26,772
Total liabilities 26,146 26,579 34,641
Net assets 68,034 67,863 68,169
Equity attributable to equity holders of the Company
Called up share capital 122 128 121
Share premium 6,542 6,535 6,535
Merger reserve 6,161 6,161 6,161
Retained earnings 54,991 54,765 55,567
Translation reserve 268 324 (165)
Fair value reserve (50) (50) (50)
Total equity 68,034 67,863 68,169
Tracsis plc - Consolidated interim statement of changes in equity for the six
months ended 31 January 2025
Unaudited Share Capital Share Premium Merger Reserve Retained Earnings Translation Reserve Fair Value Reserve Total
£000 £000 £000 £000 £000 £000 £000
At 1 August 2023 120 6,535 6,161 54,875 130 (50) 67,771
Loss for the period - - - (488) - - (488)
Other comprehensive income - - - - 194 - 194
Total comprehensive loss - - - (488) 194 - (294)
Transactions with owners:
Dividends - - - (362) - - (362)
Share-based payment charges - - - 740 - - 740
Exercise of share options 8 - - - - - 8
At 31 January 2024 128 6,535 6,161 54,765 324 (50) 67,863
At 1 February 2024 128 6,535 6,161 54,765 324 (50) 67,863
Profit for the period - - - 976 - - 976
Other comprehensive expense - - - - (489) - (489)
Total comprehensive income - - - 976 (489) - 487
Transactions with owners:
Dividends - - - (333) - - (333)
Share-based payment charges - - - 159 - - 159
Exercise of share options (7) - - - - - (7)
At 31 July 2024 121 6,535 6,161 55,567 (165) (50) 68,169
At 1 August 2024 121 6,535 6,161 55,567 (165) (50) 68,169
Loss for the period - - - (457) - - (457)
Other comprehensive income - - - - 433 - 433
Total comprehensive loss - - - (457) 433 - (24)
Transactions with owners:
Dividends - - - (395) - - (395)
Share-based payment charges - - - 276 - - 276
Exercise of share options 1 7 - - - - 8
At 31 January 2025 122 6,542 6,161 54,991 268 (50) 68,034
Tracsis plc - Condensed consolidated interim cash flow statement for the six
months ended 31 January 2025
Unaudited six months ended 31 January Unaudited six months ended 31 January Audited year ended 31 July
2025 2024 2024
Notes £000 £000 £000
Operating activities
(Loss) / profit for the period (457) (488) 488
Net finance income 5 (339) (40) (28)
Depreciation 1,141 1,144 2,371
Profit on disposal of property, plant and equipment - (16) (15)
Non-cash exceptional items 4 6 7 274
Other operating income - - (7)
Amortisation of intangible assets 2,744 2,802 5,526
Income tax (credit) / charge (285) 220 507
Share-based payment charges 276 740 899
Operating cash inflow before changes in working capital 3,086 4,369 10,015
Movement in inventories (135) 13 (48)
Movement in trade and other receivables 8,265 6,779 (2,394)
Movement in trade and other payables (7,594) (7,042) 2,408
Cash generated from operations 3,622 4,119 9,981
Interest received 262 70 171
Income tax paid (245) (1,337) (1,652)
Net cash flow from operating activities 3,639 2,852 8,500
Investing activities
Purchase of property, plant and equipment (253) (951) (1,487)
Proceeds from disposal of property, plant and equipment - 49 241
Capitalised development costs (395) (204) (462)
Payment of deferred consideration - - (315)
Net cash flow used in investing activities (648) (1,106) (2,023)
Financing activities
Dividends paid 8 - - (695)
Proceeds from exercise of share options 8 8 1
Lease liability payments (684) (537) (1,441)
Lease receivable receipts - 16 32
Net cash flow used in financing activities (676) (513) (2,103)
Net increase in cash and cash equivalents 2,315 1,233 4,374
Exchange adjustments (2) 215 92
Cash and cash equivalents at the beginning of the period 19,773 15,307 15,307
Cash and cash equivalents at the end of the period 22,086 16,755 19,773
Notes to the consolidated interim report for the six months ended 31 January
2025
1 Basis of preparation
The unaudited consolidated interim financial information has been prepared
under the historical cost convention and in accordance with the recognition
and measurement requirements of UK-adopted international accounting standards.
There has been no ISRE 2410 accordant review of the consolidated interim
financial information by an independent auditor. The condensed consolidated
interim financial information does not constitute financial statements within
the meaning of Section 434 of the Companies Act 2006 and does not include all
of the information and disclosures required for full annual financial
statements. It should therefore be read in conjunction with the Group's Annual
Report for the year ended 31 July 2024, which has been prepared in accordance
with UK-adopted international accounting standards and is available on the
Group's investor website.
The accounting policies used in the financial information are consistent with
those used in the Group's consolidated financial statements as at and for the
year ended 31 July 2024, as detailed on pages 93 to 99 of the Group's Annual
Report and Financial Statements for the year ended 31 July 2024, a copy of
which is available on the Group's website: https://tracsis.com/investors
(https://tracsis.com/investors) . (https://tracsis.com/investors.)
The comparative financial information contained in the condensed consolidated
financial information in respect of the year ended 31 July 2024 has been
extracted from the 2024 Financial Statements. Those financial statements have
been reported on by Grant Thornton UK LLP and delivered to the Registrar of
Companies. The report was unqualified, did not include a reference to any
matters to which the auditor drew attention by way of emphasis without
qualifying their report, and did not contain a statement under Section 498(2)
or 498(3) of the Companies Act 2006.
Selected explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in financial position
and performance of the Group since the last annual consolidated financial
statements as at the year ended 31 July 2024.
The preparation of the interim financial statements requires management to
make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expenses. Estimates and judgements are continually evaluated and are based
on historical experience and other factors, such as expectations of future
events and are believed to be reasonable under the circumstances. Actual
results may differ from these estimates. In preparing these interim financial
statements, the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were
the same as those applied to the audited consolidated financial statements for
the year ended 31 July 2024.
There have been no new accounting standards or changes to existing accounting
standards applied for the first time from 1 August 2024 which have a material
effect on these interim results. The Group has chosen not to early adopt any
new standards or amendments to existing standards or interpretations.
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, the Directors continue to adopt the going concern basis in
preparing this interim financial information. The Group is debt free and has
substantial cash resources. At 31 January 2025 the Group had net cash and cash
equivalents totalling £22.1m. The Board has considered future cash flow
requirements taking into account reasonably possible changes in trading
financial performance.
The condensed consolidated interim financial information was approved for
issue on 23 April 2025.
2 Principal risks and uncertainties
The Board considers risks on a periodic basis and has maintained that the
principal risks and uncertainties of the Group are consistent with the
previous year. These risks and uncertainties are expected to be unchanged for
the remainder of the financial year. Further details are provided on pages 56
to 61 of the Annual Report & Accounts for the year ended 31 July 2024.
3 Revenue and segmental analysis
a) Revenue
Revenue is summarised below:
Six months ended 31 January Six months ended 31 January Year ended 31 July
2025 2024 2024
£000 £000 £000
Rail Technology & Services 16,816 16,477 37,608
Data, Analytics, Consultancy & Events 19,492 20,105 43,414
Total revenue 36,308 36,582 81,022
Geographical split of revenue
A geographical analysis of revenue by customer location is provided below:
Six months ended 31 January Six months ended 31 January Year ended 31 July
2025 2024 2024
£000 £000 £000
United Kingdom 28,638 29,121 64,823
Ireland 4,817 4,898 9,687
Rest of Europe 171 229 401
North America 2,276 1,907 4,373
Rest of the World 406 427 1,738
Total revenue 36,308 36,582 81,022
b) Segmental analysis
The Group has divided its results into two segments being Rail Technology
& Services and Data, Analytics, Consultancy & Events consistent with
the disclosure in the 2024 financial statements.
The Group has a wide range of products and services for the rail industry,
such as software, hosting services and remote condition monitoring, and these
have been included within the Rail Technology & Services segment as they
have similar customer bases (such as Train Operating Companies and
Infrastructure Providers). Traffic data collection, event planning and traffic
management, data, analytics and consultancy offerings have similar economic
characteristics and distribution methods and so have been included within the
Data, Analytics, Consultancy & Events segment.
In accordance with IFRS 8 "Operating Segments", the Group has made the
following considerations to arrive at the disclosure made in these financial
statements. IFRS 8 requires consideration of the Chief Operating Decision
Maker ("CODM") within the Group. In line with the Group's internal reporting
framework and management structure, the key strategic and operating decisions
are made by the Executive Directors, who review internal monthly management
reports, budgets and forecast information as part of this. Accordingly, the
Executive Directors are deemed to be the CODM.
Operating segments have then been identified based on the internal reporting
information and management structures within the Group. From such information
it has been noted that the CODM reviews the business as two operating
segments, receiving internal information on that basis. The management
structure and allocation of key resources, such as operational and
administrative resources, are arranged on a centralised
basis.
Reconciliations of reportable segment revenues, profit or loss, assets and
liabilities and other material items
Information regarding the results of each reportable segment is included
below. Performance is measured based on segment profit before income tax, as
included in the internal management reports that are reviewed by the Board of
Directors. Segment profit is used to measure performance. There are no
material inter-segment transactions; however, when they do occur, pricing
between segments is determined on an arm's length basis. Revenues disclosed
below materially represent revenues to external customers. Segmental profit
before tax has been further analysed to allocate amortisation and exceptional
items. Segmental assets and liabilities have been further analysed to allocate
intangibles and investments, contingent consideration and deferred
consideration to each individual segment.
As disclosed in the 2024 financial statements, following the IFRIC agenda
decision issued in July 2024 regarding segmental reporting, the Group has
elected to include cost of sales within the segmental analysis. The prior year
comparison has been amended to include these amounts.
Six months ended 31 January 2025
Rail Technology & Services Data, Analytics, Consultancy & Events Unallocated Total
£000 £000 £000 £000
Income statement
Total revenue for reportable segments 16,816 19,492 - 36,308
Cost of sales (2,934) (12,929) - (15,863)
Gross profit 13,882 6,563 - 20,445
Underlying administrative costs (10,871) (5,773) - (16,644)
Adjusted EBITDA for reportable segments 3,011 790 - 3,801
Amortisation of intangible assets (2,137) (607) - (2,744)
Depreciation (466) (675) - (1,141)
Exceptional items (554) (167) - (721)
Share-based payment charges - - (276) (276)
Interest receivable / (payable) - net 356 (17) - 339
Consolidated profit / (loss) before tax 210 (676) (276) (742)
Six months ended 31 January 2024 represented*
Rail Technology & Services Data, Analytics, Consultancy & Events Unallocated Total
£000 £000 £000 £000
Income statement
Total revenue for reportable segments 16,477 20,105 - 36,582
Cost of sales (2,533) (11,987) - (14,520)
Gross profit 13,944 8,118 - 22,062
Underlying administrative costs (10,509) (5,879) - (16,388)
Adjusted EBITDA for reportable segments 3,435 2,239 - 5,674
Amortisation of intangible assets (2,201) (601) - (2,802)
Depreciation (505) (639) - (1,144)
Exceptional items (939) (357) - (1,296)
Share-based payment charges - - (740) (740)
Interest receivable / (payable) - net 54 (14) - 40
Consolidated profit / (loss) before tax (156) 628 (740) (268)
* Exceptional items for the six months ended 31 January 2024 have been
represented following the allocation of £305,000 exceptional costs from the
Unallocated category to the Rail Technology and Services segment, and of
£286,000 exceptional costs from the Unallocated category to the Data,
Analytics, Consultancy & Events segment.
Year ended 31 July 2024
Rail Technology & Services Data, Analytics, Consultancy & Events Unallocated Total
£000 £000 £000 £000
Income statement
Total revenue for reportable segments 37,608 43,414 - 81,022
Cost of sales (6,466) (28,543) - (35,009)
Gross profit 31,142 14,871 - 46,013
Underlying administrative costs (21,319) (11,935) - (33,254)
Adjusted EBITDA for reportable segments 9,823 2,936 - 12,759
Amortisation of intangible assets (4,301) (1,225) - (5,526)
Depreciation (1,005) (1,366) - (2,371)
Exceptional items (1,816) (1,187) - (3,003)
Other operating income - - 7 7
Share-based payment charges - - (899) (899)
Interest receivable / (payable) - net (31) 59 - 28
Consolidated profit / (loss) before tax 2,670 (783) (892) 995
31 January 2025
Rail Technology & Services Data, Analytics, Consultancy & Events Unallocated Total
£000 £000 £000 £000
Assets
Total other assets for reportable segments 10,417 9,479 - 19,896
Intangible assets 42,081 8,448 - 50,529
Deferred tax assets - - 1,669 1,669
Cash and cash equivalents 17,151 4,935 - 22,086
Consolidated total assets 69,649 22,862 1,669 94,180
Liabilities
Total other liabilities for reportable segments (14,658) (4,523) (395) (19,576)
Deferred tax liabilities - - (6,416) (6,416)
Contingent consideration - (154) - (154)
Consolidated total liabilities (14,658) (4,677) (6,811) (26,146)
31 January 2024
Rail Technology & Services Data, Analytics, Consultancy & Events Unallocated Total
£000 £000 £000 £000
Assets
Total other assets for reportable segments 10,835 10,944 - 21,779
Intangible assets 45,521 9,721 - 55,242
Deferred tax assets - - 666 666
Cash and cash equivalents 7,978 8,777 - 16,755
Consolidated total assets 64,334 29,442 666 94,442
Liabilities
Total other liabilities for reportable segments (14,268) (4,581) (362) (19,211)
Deferred tax liabilities - - (6,909) (6,909)
Contingent consideration - (145) - (145)
Deferred consideration - (314) - (314)
Consolidated total liabilities (14,268) (5,040) (7,271) (26,579)
31 July 2024
Rail Technology & Services Data, Analytics, Consultancy & Events Unallocated Total
£000 £000 £000 £000
Assets
Total other assets for reportable segments 13,318 15,733 - 29,051
Intangible assets 43,876 8,734 - 52,610
Deferred tax assets - - 1,376 1,376
Cash and cash equivalents 14,446 5,327 - 19,773
Consolidated total assets 71,640 29,794 1,376 102,810
Liabilities
Total other liabilities for reportable segments (17,999) (9,359) - (27,358)
Deferred tax liabilities - - (7,132) (7,132)
Contingent consideration - (151) - (151)
Consolidated total liabilities (17,999) (9,510) (7,132) (34,641)
4 Exceptional items
The Group has incurred exceptional items which are analysed as follows:
Six months ended 31 January Six months ended 31 January Year ended 31 July
2025 2024 2024
£000 £000 £000
Non-cash:
Unwind of discounting of contingent consideration - 7 14
Transformation costs - footprint 6 - 260
Cash:
Transformation costs - headcount 662 564 1,201
Transformation costs - IT - 471 650
Transformation costs - footprint 28 - 225
Transformation costs - other 25 254 653
Total exceptional items 721 1,296 3,003
Split:
Non-cash 6 7 274
Cash 715 1,289 2,729
Total 721 1,296 3,003
As described in the Group's Annual Report for the year ended 31 July 2024, the
Group is undertaking a series of actions to transform its operating model.
These actions will establish a consistent and scalable approach to how the
Group develops and delivers application software solutions based around
industry best practice, as well as ensuring that its operating systems,
processes and footprint are aligned with this operating model. These changes
will improve the timeliness, quality and repeatability of delivery, which will
enable the Group to accelerate its future growth trajectory.
The Group's accounting policy is to classify items which are significant by
their size or nature and/or which are considered non-recurring as exceptional
operating items. The costs associated with delivering this programme of
actions have been reported as exceptional operating items consistent with this
policy since they are material in size and nature, and are non-recurring.
Exceptional costs of £721,000 associated with delivering this programme of
actions have been recognised in the income statement during the period. These
costs principally relate to headcount reductions where roles are duplicated or
no longer required that were completed after 31 July 2024 for operational
reasons. These costs also include costs of reducing the Group's physical and
legal entity footprint and third party costs to support the upgrade of the
Group's operating processes.
Exceptional cash flows in the period were £1,030,000, comprising £446,000 in
respect of costs accrued at 31 July 2024 and £715,000 of cash exceptional
items for the period, less £131,000 in respect of costs accrued at 31 January
2025.
5 Net finance income
Six months ended 31 January Six months ended 31 January Year ended 31 July
2025 2024 2024
£000 £000 £000
Interest received on bank deposits 392 70 171
Net interest on lease liabilities (53) (50) (136)
Net foreign exchange gain - 26 -
Unwind of discount of deferred consideration - (6) (7)
Total net finance income 339 40 28
6 Earnings per share
Basic earnings per share
The calculation of basic earnings per share for the half year ended 31 January
2025 was based on the loss attributable to ordinary shareholders of
(£457,000) (half year to 31 January 2024: loss (£488,000), year ended 31
July 2024: profit £488,000) and a weighted average number of ordinary shares
in issue of 30,359,000 (half year to 31 January 2024: 30,062,000, year ended
31 July 2024: 30,169,000), calculated as set out below.
Diluted earnings per share
The calculation of diluted earnings per share for the half year ended 31
January 2025 was based on the loss attributable to ordinary shareholders of
(£457,000) (half year to 31 January 2024: loss (£488,000), year ended 31
July 2024: profit £488,000) and the weighted average number of ordinary
shares in issue of 30,359,000 with no adjustment presented for potential
ordinary shares since such shares were antidilutive in the period (half year
to 31 January 2024: 30,062,000, year ended 31 July 2024: 30,628,000),
calculated as set out below.
Weighted average number of ordinary shares
Six months ended 31 January Six months ended 31 January Year ended 31 July
In thousands of shares 2025 2024 2024
Issued ordinary shares at start of period 30,326 29,958 29,958
Effect of shares issued for cash 33 104 211
Weighted average number of shares for the period 30,359 30,062 30,169
For the purposes of calculating basic earnings per share 30,359 30,062 30,169
Adjustment for the effects of all dilutive potential ordinary shares - - 459
For the purposes of calculating diluted earnings per share 30,359 30,062 30,628
Basic earnings per share (1.51p) (1.62p) 1.62p
Diluted earnings per share (1.51p) (1.62p) 1.59p
Adjusted EPS
In addition, Adjusted Profit EPS is calculated below on the grounds that it is
a common metric used by the market in monitoring similar businesses. These
figures are relevant to the Group and are provided to enable a comparison to
similar businesses and are metrics used by equity analysts who cover the
Group. Amortisation and share-based payment charges are deemed to be non-cash
at the point of recognition in nature, and exceptional items by their very
nature are one-off, and therefore excluded in order to assist with the
understanding of underlying trading. A reconciliation of this figure is
provided below.
Diluted Adjusted Profit EPS has been calculated based on a weighted average
number of ordinary shares in issue plus adjustment for the effects of all
dilutive potential ordinary shares which totalled 30,712,000 (half year to 31
January 2024: 30,636,000, year ended 31 July 2024: 30,628,000).
Six months ended 31 January Six months ended 31 January Year ended 31 July
2025 2024 2024
£000 £000 £000
(Loss) / profit after tax (457) (488) 488
Amortisation of intangible assets 2,744 2,802 5,526
Share-based payment charges 276 740 899
Exceptional items 721 1,296 3,003
Other operating income - - (7)
Tax impact of the above adjusting items (918) (1,191) (2,213)
Adjusted profit for EPS purposes 2,366 3,159 7,696
Weighted average number of ordinary shares
In thousands of shares
For the purposes of calculating basic adjusted earnings per share 30,359 30,062 30,169
Adjustment for the effects of all dilutive potential ordinary shares 353 574 459
For the purposes of calculating diluted adjusted earnings per share 30,712 30,636 30,628
Basic adjusted earnings per share 7.79p 10.51p 25.51p
Diluted adjusted earnings per share 7.70p 10.31p 25.13p
7 Seasonality and phasing
The Group offers a wide range of products and services within its overall
suite, meaning that revenues can fluctuate depending on the status and timing
of certain activities.
Some of the Group's revenue streams are exposed to high levels of seasonality.
This is most material in the Group's Data, Analytics, Consultancy & Events
Division, which derives significant amounts of revenue from work taking place
at certain times of the year, in particular for Events which has a very high
level of seasonality based on the timing of events, and Traffic Data where
work typically takes place when the weather conditions are more predictable.
These factors mean that revenue in the Group's Data, Analytics, Consultancy
& Events Division is usually higher in the second half of the financial
year.
Other revenue streams are dependent on the timing of new contract wins,
project milestones, and software licence renewals.
The Group's Rail Technology and Services Division delivers some large software
development projects, where revenue is recognised dependent on either the work
performed or project milestones delivered. The timing of these can vary
depending on commercial terms and customer requirements. Revenues from remote
condition monitoring are also driven by the size and timing of significant
orders received from major customers. The timing of certain software licence
renewals, including where revenue is recognised at a point in time, can
fluctuate over a twelve-month cycle. The timing of new contract wins is also
variable between reporting periods.
Customers in the North American rail technology market have historically
procured software licences under a perpetual licence model more than in the UK
market. The Group believes that this will transition to an increasingly
SaaS-focused model over time. During this period there will likely be more
volatility in the phasing of revenue growth in the North American market.
In the Group's Data, Analytics, Consultancy and Events Division, certain
revenue streams are similarly impacted by the timing of projects and delivery
of work depending on customer requirements.
As such, the overall Group continues to be exposed to a high degree of
seasonality throughout the year and variability in revenue phasing between
reporting periods.
8 Dividends
The Board has declared an interim dividend of 1.2 pence per share which will
be paid on 23 May 2025 to shareholders on the register at 9 May 2025. A final
dividend of 1.3 pence per share was paid on 4 February 2025 in respect of the
year ended 31 July 2024 and a corresponding liability of £395,000 has been
recognised within trade and other payables at 31 January 2025. The Board
intends to pursue a sustainable and progressive dividend policy in the future,
having regard to the development of the Group.
9 Related party transactions
The following transactions took place during the period with related parties:
Purchase of goods and services Amounts owed to related parties
Six months ended 31 January Six months ended 31 January Year ended 31 July At 31 January At 31 January At 31 July
2025 2024 2024 2025 2024 2024
£000 £000 £000 £000 £000 £000
Ashtead Group PLC ((1)) 14 18 29 - - 8
There were no sales to related parties in the period, or comparative periods,
and no amounts owed by related parties at the end of the period, or
comparative periods.
(1) Ashtead Group PLC ("Ashtead ") is a company which is connected to Jill
Easterbrook who served as a non-executive director of Tracsis plc and of
Ashtead during the period. Sales to and purchases from Ashtead took place at
arm's length commercial rates and were not connected to Ms Easterbrook's
position at Ashtead.
10 Reconciliation of alternative profit metrics ("APMs")
The Group uses APMs, which are not defined or specified under the requirements
of International Financial Reporting Standards ("IFRS"). These metrics adjust
for certain items which impact upon IFRS measures, to aid the user in
understanding the activity taking place across the Group's businesses. The
largest components of the adjusting items, being depreciation, amortisation
and share-based payments, are "non-cash" items and are separately analysed to
assist with the understanding of underlying trading. Share-based payments are
adjusted to reflect the underlying performance of the Group as the fair value
on initial recognition is impacted by market volatility that does not
correlate directly to trading performance. APMs are used by the Directors and
management for performance analysis, planning, reporting and incentive
purposes.
Adjusted EBITDA
Calculated as earnings before net finance income, tax, depreciation,
amortisation, exceptional items, other operating income and share-based
payment charges. This metric is used to show the underlying trading
performance of the Group from period to period in a consistent manner and is a
key management incentive metric. The closest equivalent statutory measure is
profit before tax. Adjusted EBITDA can be reconciled to statutory profit
before tax as set out below:
Six months ended 31 January Six months ended 31 January Year ended 31 July
2025 2024 2024
£000 £000 £000
(Loss) / profit before tax (742) (268) 995
Net finance income (339) (40) (28)
Share-based payment charges 276 740 899
Exceptional items 721 1,296 3,003
Other operating income - - (7)
Amortisation of intangible assets 2,744 2,802 5,526
Depreciation 1,141 1,144 2,371
Adjusted EBITDA 3,801 5,674 12,759
Adjusted basic earnings per share
Calculated as profit after tax before amortisation, share-based payment
charges, exceptional items and other operating income divided by the weighted
average number of ordinary shares in issue during the period. This is a common
metric used by the market in monitoring similar businesses and is used by
equity analysts who cover the Group to better understand the underlying
performance of the Group. See note 6: Earnings per share.
Free cash flow
Calculated as net cash flow from operating activities after purchase of
property, plant and equipment, proceeds from disposal of property, plant and
equipment, proceeds from exercise of share options, lease liability payments,
lease receivable receipts and capitalised development costs, and before
payment of contingent consideration. This measure reflects the cash generated
in the period that is available to invest in accordance with the Group's
growth strategy and capital allocation policy. Free cash flow reconciles to
net cash flow from operating activities as set out below:
Six months ended 31 January Six months ended 31 January Year ended 31 July
2025 2024 2024
£000 £000 £000
Net cash flow from operating activities 3,639 2,852 8,500
Purchase of property, plant and equipment (253) (951) (1,487)
Proceeds from disposal of property, plant and equipment - 49 241
Proceeds from exercise of share options 8 8 1
Capitalised development costs (395) (204) (462)
Lease liability payments (684) (537) (1,441)
Lease receivable receipts - 16 32
Free cash flow 2,315 1,233 5,384
11 Contingent and deferred consideration
a) Contingent consideration
In 2022 the Group acquired The Icon Group Limited ("Icon"). Under the share
purchase agreement, contingent consideration is payable which is based on the
profitability of Icon in the three-year period after the acquisition, and on
the successful renewal of certain key contracts. Contingent consideration is
payable in Euros up to a maximum of €1,750,000 (£1,465,000). Based on
reduced activity under certain contracts and current expectations regarding
the renewal of certain contracts, the fair value of the amount payable was
assessed as €183,000 (£154,000) at 31 January 2025.
At the balance sheet date, the Directors assessed the fair value of the
remaining amounts payable as follows:
At 31 January At 31 January At 31 July
2025 2024 2024
£000 £000 £000
The Icon Group Limited 154 145 151
The movement on contingent consideration can be summarised as follows:
Six months ended 31 January Six months ended 31 January Year ended 31 July
2025 2024 2024
£000 £000 £000
At the start of the period 151 139 139
Unwind of discounting - 7 14
Exchange adjustment 3 (1) (2)
At the end of the period 154 145 151
The ageing profile of the remaining liabilities can be summarised as follows:
At 31 January At 31 January At 31 July
2025 2024 2024
£000 £000 £000
Payable in less than one year 154 - 151
Payable in more than one year - 145 -
Total contingent consideration payable 154 145 151
b) Deferred consideration
The Group acquired Flash Forward Consulting Limited on 26 February 2021. As
part of this acquisition cash consideration totalling £945,000 became payable
in three equal instalments on the first, second and third anniversary of the
acquisition date. At acquisition the present value of this deferred
consideration was assessed as £878,000 discounted using a rate of 3.75%. In
the year ended 31 July 2024 the final payment of this deferred consideration
was paid. The movement on deferred consideration can be summarised as follows:
Six months ended 31 January Six months ended 31 January Year ended 31 July
2025 2024 2024
£000 £000 £000
At the start of the period - 308 308
Cash payment - - (315)
Unwind of discounting - 6 7
At the end of the period - 314 -
Further information for shareholders
Company number: 05019106
Registered office: Nexus
Discovery Way
Leeds
LS2 3AA
Directors: Jill Easterbrook (Non-Executive Chair)
Chris Barnes (Chief Executive Officer)
Andrew Kelly (Chief Financial Officer)
Ross Paterson (Non-Executive Director)
James Routh (Non-Executive Director)
Tracy Sheedy (Non-Executive Director)
Company Secretary: Jan Mitson
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