Trakm8 released their interims this morning, and it appears that the company has now resumed it's growth trajectory.
You can crunch the numbers all you like and perform some sort of forensic analysis on the results, but I've always found that sticking to very simple measures works for me.
Simply put, the interims were a great improvement on last year. What do you need to know?
For me it's just these facts:-
1) They generated £3.6m cash, paid down £2m in bank loans and added £730,000 to the balance sheet in the latest 6 months. Cash on the balance sheet stands at £2.7m.
2) Adjusted profit was up 78% to £1.05m, and adjusted basic EPS up 125% at 3.56p.
3) Solution sales were up 29% with the all important recurring revenues up 17% (£5.5m). Forget the overall revenue figure (up 12%) because it's distorted by their move out of low margin product sales.
4) At the period end they had approximately 217,000 units (Sept 2016: 177,000 units) reporting to their servers, being an increase of 23% over the last twelve months. This is an increase of 27,000 units (14%) since 31 March 2017.
5) Gross margin is steady at a more than healthy 48%.
They anticipate a stronger second half (as usual) with the visibility to support their second half expectations.
Pretty straightforward to me.
The share price was up 0.5p today, but has risen strongly in recent weeks following their October trading update. There were no surprises in the interims.
All the basic measures look pretty impressive to me, and I am hopeful that the company will go from strength to strength. For a growth company at the cutting edge of an exciting space, I'd suggest the share price has far further to run in the short, medium and longer term, although ultimately I'd expect Trakm8 to be acquired for between 4 and 10 times revenues (based on other Telematics company acquisitions).
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