Tracsis (TRCS) H2 2024 earnings summary

Executive summary

• Achieved 10% growth in recurring revenue and strong cash flow, with no debt, while transforming the operating model and establishing new senior leadership.

• Rail software pipeline increased by 200%, with new train dispatch product launched in North America and expanded smart ticketing deployments in the UK, including the first contactless solution outside London.

• Financial performance missed FY24 targets due to UK election timing and slower North American pipeline conversion, but was in line with revised guidance.

• Defined a carbon reduction plan targeting carbon neutrality by 2030.

Financial highlights

• FY24 revenue £81.0m, down 1% year-over-year, with a £2m hit from the UK general election and £4m of non-repeat revenue from FY23.

• Adjusted EBITDA £12.8m, down 20%; adjusted profit £10.4m, down 25%; statutory operating profit £1.0m, down 87%.

• Statutory profit includes £3.0m of exceptional transformation costs, mainly for headcount reduction and IT upgrades.

• Cash increased by £4.5m to £19.8m; all material earn-outs paid; no debt or material earnouts remain.

Outlook and guidance

• Margins expected to remain flat in H1 FY25, with full-year FY25 targets aiming to return to FY23 levels and long-term EBITDA margin goal above 20%.

• FY25 priorities include converting large North American Train Dispatch pipeline, growing UK PAYG smart ticketing, expanding RailHub, and completing at least one acquisition.

• Short-term UK headwinds anticipated from Network Rail funding and increased employment costs, but long-term growth drivers in both UK and North America remain strong.