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Tuesday 23 February 2021

Tracsis sees light at the end of the tunnel

LogoFall-out from the pandemic continued to take its toll on traffic data and transportation software and services provider Tracsis during H121. The Leeds-HQ’d company, which relies on the coronavirus ravaged large-scale outdoor events sector for a significant proportion of its revenues, now estimates that revenue for the six months ended 31st January will be down c. 17% yoy to £22m. EBITDA for the period is, however, expected to hold up well, landing only slightly lower than the £5.6m achieved in the first half of last year.

Tracsis attributes the anticipated comparatively strong bottom line performance to the continued resilience of its higher margin Rail Technology & Services (RTS) Division, and the positive impact of cost reduction actions taken in response to the COVID-19 driven disruptions. RTS, which generated over 50% of total company sales in FY20, was reported to have traded well H1 with several new business wins. It also continued to benefit from high levels of recurring software revenue and turnover from existing multi-year contracts. The division currently has two large rail opportunities in the final stages of contract award.

Looking ahead, the Board continues to believe as it did at the end of last November (see here) that FY21 will see both modest revenue growth and EBITDA margin improvement. There is also increasing optimism that activity levels in the Events and Traffic Data business units will progressively return to normal as lockdown restrictions are lifted. These as they relate to mass outdoor gatherings, however, are unlikely to ease fast enough to make any material difference to Tracsis this financial year.

Posted by: Duncan Aitchison at 09:05

Tags: sofftware   rail   traffic   tradingupdate  

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