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In line with the trading update issued in February (see here), H125 revenue at Tracsis declined by 1% yoy to £36.3m. The previously signposted £1.1m revenue discontinuation resulting from the Network Rail Control Period 7 funding also took a significant toll on the bottom line of the Leeds-HQ’d provider of software and services to the rail and transport industries. The six months ended 31st January saw the company’s adjusted EBITDA drop by a third yoy to £3.8m with the associated margin shedding 504 bps to stand at 10.5%.
Despite the uncertainties regarding the impact of recently announced US tariffs on procurement activity by rail-served ports, freight operators and industrials in North America, Tracsis remains optimistic that its second half fortunes will improve significantly. Without further material contract wins, the Board expects FY25 adjusted EBITDA to be in the range £12.5m - £13.5m. The company also reports making good progress against its strategic objectives: focusing the business on higher-margin technology solutions; growing annual recurring and transactional revenues; and expanding its international presence.
The publication this morning of its interim results was followed shortly afterwards by an announcement by Tracsis of its intention to launch a buyback programme of up to £3.0 million. The initiative will see the repurchase and cancellation of c.5% of the company's Ordinary Shares. Despite the promise of returning surplus capital to shareholders, market reaction has been muted. At the time of writing, the Tracsis’s share price was down by 2.6% in early trading to leave it almost two thirds lower than its value twelve months ago. Investors do not yet appear to share CEO, Chris Barnes’s confidence in the company’s prospects.
Posted by: Duncan Aitchison at 09:49
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transportation