REG - Trakm8 Holdings PLC - Trading Update, Contract Extension & CLNs Issue

Trakm8 HoldingsAnnouncement

03/04/2024 07:00

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RNS Number : 0621J  Trakm8 Holdings PLC  03 April 2024

Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information as stipulated under the
UK Market Abuse Regulation. With the publication of this announcement, this
information is now considered to be in the public domain.

3 April 2024

 

Trakm8 Holdings plc

("Trakm8", the "Group" or the "Company")

Trading Update, Purchase of IP, Contract Extension & Issue of Convertible
Loan Notes

Trakm8 Holdings plc (AIM: TRAK), the global telematics and data insight
provider, provides the following update.

 

Trading Update

 

On 22 March 2024, the Group announced a trading update relating to the
financial year ended 31 March 2024 ("FY-2024" or the "Period"). Post
completion of the Period, the Group can now confirm that operational cash
generation for the Period is expected to be £5.4m (FY-2023: £4.3m). In
addition, cash on hand amounted to £1.4m (FY-2023: £1.1m) and net debt,
excluding IFRS16 lease liabilities, was £4.9m (FY-2023: £5.6m). The Group
also has an unused overdraft facility of £0.5m.

 

The Group separately noted that the extent of any shortfall in its results for
the financial year ending 31 March 2025 ("FY-2025") would ultimately depend
on, inter alia, insurance capacity returning. The Group is pleased to confirm
that insurance capacity has now been restored to the Group's largest insurance
customer. Accordingly, the board of directors of the Group (the "Board") now
believes that shipments into the insurance market are expected to recover
during April 2024.

 

Purchase of Intellectual Property

 

Trakm8 is pleased to announce that, on 2 April 2024, the Group completed the
purchase of certain Intellectual Property ("IP") from Action 365 Limited, a
Freedom Services Group Company ("Freedom"), under a software licence
agreement, for a total consideration of £500,000.

Under the licence agreement, the Group has acquired industry approved
technology that will complement the Group's existing extensive risk management
and driver profiling capabilities including accident detection. This will
further improve the breadth of service that the Group can offer to its
existing and potential new customers.

 

Supply Agreement Extension

Under a separate agreement with Freedom, Trakm8 has agreed a supply contract
extension for four years. Under this agreement, Freedom has committed to
purchase a minimum of 90% of its OBD (on-board diagnostics) and 12v devices
and related services from Trakm8.

The Board believes that these agreements will provide increased certainty to
the Group's financial results this year and beyond.

Banking Update

Trakm8 and HSBC have agreed to an extension of the Company's existing £5.3m
term loan on the same terms for a further year, to July 2025. HSBC has also
agreed that Trakm8 will not be required to make capital repayments on the loan
until October 2024. Interest will continue to be paid as usual. As at 31 March
2024, the outstanding balance on the loan was £3.6m.

Issue of Convertible Loan Notes

Trakm8 is also pleased to announce a fundraise via the issue of £990,000
nominal of 18% Convertible Unsecured Loan Notes (together the "2024 Loan
Notes"). The primary purpose of the issue of the 2024 Loan Notes is to provide
the Group with the funds required to complete the purchase of IP outlined
above and to provide an increase in working capital to meet the anticipated
volume increases from both the supply agreement extension and the driver
scoring algorithms.

 

The 2024 Loan Notes, which contain customary terms of default, will attract
interest from its issue date of 2 April 2024, payable quarterly, until
repayment on 13 September 2025. No application has been or will be made to any
Recognised Investment Exchange for the listing of, or for permission to deal
in, the 2024 Loan Notes. The 2024 Loan Notes are convertible at a conversion
price of 8.1p, being a ten per cent. discount to the closing mid-market price
of a Trakm8 ordinary share of 9p (the "Reference Price") on 2 April 2024, the
last practicable date prior to this announcement.  The terms of the 2024 Loan
Notes prohibit the Company from entering into any further unsecured loans,
other than in the normal course of business and subject to the prior consent
of holders of the 2024 Loan Notes.  In addition, in the event that the
Company undertakes an equity funding raising in excess of £0.5m prior to
repayment of the 2024 Loan Notes, the conversion price of the 2024 Loan Notes
will be adjusted to a 10 per cent. discount to the price of that equity
funding, provided the issue price of the equity funding is lower than the
Reference Price.  In the absence of a default event, the principal sum of the
2024 Loan Notes will be repaid or converted, in full or in part, at the option
holders of the 2024 Loan Notes at the maturity date of 13 September 2025 into
Trakm8 ordinary shares and will not be redeemed. The Trakm8 ordinary shares so
issued will rank pari passu in all respects with the existing ordinary shares
currently in issue.

 

Certain directors of the Company will also be subscribing for the 2024 Loan
Notes in the following amounts: John Watkins £275,000; Nadeem Raza £100,000;
and Jon Edwards £25,000.

 

Variation to 2022 convertible loan notes

 

On 13 September 2022, the Group issued £1,580,000 nominal of 12% Convertible
Unsecured Loan Notes (the "2022 Loan Notes"). These were due for repayment on
13 September 2024. All of the holders of the 2022 Loan Notes have agreed: (i)
that the Company can issue the 2024 Loan Notes; and (ii) to extend the
repayment period for the 2022 Loan Notes to 13 September 2025. In order to
obtain the agreement of the holders of the 2022 Loan Notes to these
variations, the interest rate on the 2022 Loan Notes has been increased to 18%
and the conversion price amended to 8.1p, matching that of the 2024 Loan
Notes. Other terms, as detailed in the announcement of the 2022 CLNs on 14
September 2022, remain unchanged.

 

Related party transactions

 

Nadeem Raza, John Watkins and Jon Edwards are directors of Trakm8 (together
the "Connected 2024 Loan Note Subscribers"). The Connected 2024 Loan Note
Subscribers are therefore related parties of the Group for the purposes of the
AIM Rules for Companies (the "AIM Rules"). Participation in the 2024 Loan
Notes by the Connected 2024 Loan Note Subscribers and the variation to the
terms of the 2022 Loan Notes in respect of the related parties that
participated in those constitute related party transactions under the AIM
Rules. Keith Evans, the Director independent of the related party
transactions considers, having consulted with the Group's nominated adviser,
Allenby Capital Limited, that the terms of the participation in the 2024 Loan
Notes by the Connected 2024 Loan Note Subscribers and the variations to the
terms of the 2022 Loan Notes held by the related parties are fair and
reasonable insofar as the Group's shareholders are concerned.

 

John Watkins, Trakm8's Executive Chairman, commented "We are delighted to
extend our partnership with Freedom and to increase our capability in
Insuretech services. We also thank the subscribers to the 2024 Loan Notes who
are not directors of the Company in helping to facilitate this."

 

The FCA notification, made in accordance with the requirements of the UK
Market Abuse Regulation, is appended further below.

- Ends -

 

 

For further information:

 Trakm8 Holdings plc
 John Watkins, Executive Chairman                           Tel: +44 (0) 1675 434 200
 Jon Edwards, Chief Financial Officer                       www.trakm8.com (http://www.trakm8.com/)

 Allenby Capital Limited (Nominated Adviser & Broker)       Tel: +44 (0)20 3328 5656
 David Hart / Vivek Bhardwaj, Corporate Finance             www.allenbycapital.com

Tony Quirke, Sales and Corporate Broking

 

 

 

 

 

 

About Trakm8

 

Trakm8 is a UK based technology leader in fleet management, insurance
telematics, connected car, and optimisation. Through IP owned technology, the
Group uses AI data analytics collected from its installed base of telematics
units to fine tune the algorithms that are used to produce its' solutions;
these monitor driver behaviour, identify crash events and monitor vehicle
health to provide actionable insights to continuously improve the security and
operational efficiency of both company fleets and private drivers.

 

The Group's product portfolio includes the latest data analytics and reporting
portal (Trakm8 Insight), integrated telematics/cameras/optimisation,
self-installed telematics units and one of the widest ranges of installed
telematics devices. Trakm8 has over 275,000 connections.

 

Headquartered in Coleshill near Birmingham alongside its manufacturing
facility, the Group supplies to the Fleet, Optimisation, Insurance and
Automotive sectors to many well-known customers in the UK and internationally
including the AA, Saint Gobain, EON, Iceland Foods, GSF, Direct Line Group,
Ticker and Freedom Group.

 

Trakm8 has been listed on the AIM market of the London Stock Exchange since
2005. Trakm8 is also recognised with the LSE Green Economy Mark.

 

www.trakm8.com (http://www.trakm8.com) / @Trakm8

 

 1.  Details of the person discharging managerial responsibilities / person closely
     associated
 a)  Name                                                         John Watkins

                                                                  Nadeem Raza

                                                                  Jon Edwards

                                                                  All Directors of the Company
 2.  Reason for the Notification
 a)  Position/status                                              PDMRs
 b)  Initial notification/Amendment                               Initial Notification
 3.  Details of the issuer, emission allowance market participant, auction
     platform, auctioneer or auction monitor
 a)  Name                                                         Trakm8 Holdings plc
 b)  LEI                                                          213800I7RQRIKCSHY846
 4.  Details of the transaction(s): section to be repeated for (i) each type of
     instrument; (ii) each type of transaction; (iii) each date; and (iv) each
     place where transactions have been conducted
 a)  Description of the Financial instrument, type of instrument  Ordinary shares of 1p each in the Company ("Ordinary Shares")
     Identification code                                          ISIN: GB00B0P1RP10
 b)  Nature of the transaction                                    Participation in the subscription of the 2024 Loan Notes
 b)  Price(s) and volume(s)                                       Price: base conversion price of 8.1p per Ordinary Share

Name          Volume (principal value of 2024 Loan Notes subscribed)
                                                                  John Watkins  £275,000

                                                                  Nadeem Raza   £100,000

                                                                  Jon Edwards   £25,000

 d)  Aggregated information:                                      n/a

     - Aggregated volume

     - Price
 e)  Date of the transaction                                      2 April 2024
 f)  Place of the transaction                                     Outside a trading venue

d)

Aggregated information:

- Aggregated volume

- Price

n/a

e)

Date of the transaction

2 April 2024

f)

Place of the transaction

Outside a trading venue

 

 

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