Trakm8 see strong growth in full-year revenues

Trakm8, the AIM-listed GPRS technology group, saw revenues rise by a quarter in the year ended March 31st 2012 and said that it is confident of further growth in the coming year.

Revenue increased from £4.19m to £5.22m year-on-year, helped by strong growth in its Telematics hardware division, which saw sales increase from £1.39m to £2.23m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) slumped from £0.59m to £0.36m but the prior year's results included £0.4m of government grants. Stripping out these, adjusted EBITDA improved from £0.23m to £0.35m. The gross profit margin edged lower from 66.6% to 63.7%.

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"We have a strong balance sheet with substantial cash reserves and minimal debt. The market for vehicle telematics in the UK is still very fragmented and should opportunities emerge for us to grow by making acquisitions then we will seriously consider them," said Chief Executive Officer John Watkins.

The group said that revenues will continue to improve over the next twelve months with results expected to be in line with market expectations. "Cost reduction initiatives and innovative product launches undertaken during the downturn, have left us well positioned for future growth," Watkins said.

Analysts at finnCap said this morning: "The telematics market is showing growth and within that Trakm8 has become a leading supplier, with a swathe of impressive contracts and customers.

"The quality of its client base and its work with government agencies reflects Trakm8's reputation in an industry which has seen some fly-by-night operators. It has shown it has the scale and quality to deliver at the highest levels."

Shares had gained 3.85% to 13.5p by the close on Monday.

BC