How rail technology helped Tracsis mitigate virus impact

The Leeds-based transport software firm said group revenues are expected to be around £48m for the year ended July 31, 2020, down from £49.2m the previous year.

Covid-19 has had a negative impact of around £10m on overall revenues mainly in its Traffic & Data Services division.

The firm said under the circumstances it is pleased with the overall revenue performance, which was assisted by a "very strong performance" from its Rail Technology & Services division.

Despite the impact of Covid-19, Tracsis expects to report a pre International Financial Reporting Standards (IFRS) 16 earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin in the region of 20 per cent, down slightly from 21 per cent the previous year.

Adjusted EBITDA before the adoption of IFRS 16 and adjusted profit are both expected to be less than the previous year when they were £10.5m and £9.7m respectively.

The majority of the EBITDA has been generated from its Rail Technology & Services division, which has largely been protected from the impact of Covid-19 with the exception of a reduction in delay-repay related revenues.

Cash balances at the end of July were around £18m, down from £24.1m the previous year, after Tracsis completed the acquisition of software company iBlocks in March 2020, making all tax payments due and all payments due in respect of previous acquisitions.

Tracsis said: "Our Rail Technology & Services sivision has continued to trade very well throughout the pandemic. The performance of this part of the group is underpinned by high levels of recurring software revenue. In addition, our Remote Condition Monitoring business has traded very strongly, as have all of our software businesses which continue to deliver a number of major multi-year contracts.

"iBlocks, which was acquired in March 2020, has traded well since joining the Group, and integration is ongoing and progressing well. The business continues to pursue a number of exciting opportunities in the smart ticketing space, which could be a major growth opportunity.

"Despite the impact that Covid-19 has had on clients cancelling and postponing projects within the Traffic & Data Services division we have continued to secure new work during the pandemic, with the most notable sources of revenue being the continued strong performance of Compass Informatics and the delivery of a major contract within our Traffic Data business.

"The impact of the reduced revenue on profitability has been mitigated to an extent by not requiring casual labour at major events that have not taken place, plus other actions that have been proactively taken to quickly reduce the fixed cost base across this part of the group."