Tracsis' profits dip but 'much stronger' second half expected

Tracsis on Wednesday reported falling interim profits as rising administrative costs negated the effect of a slight climb in revenue, although the second half of the year was expected to yield a "much stronger" performance.

The transportation software provider recorded profit before tax of £2.1m for the six-month period ended 31 January, down 11% compared to the same period a year beforehand, as administrative costs climbed 16% to £9.4m, offsetting a 4% increase in revenue to £18.8m.

Tracsis had cash and cash equivalents of £18.7m at the end of the period, marginally higher than the £18.5m it registered at the same point a year beforehand, while the board proposed an interim dividend of 0.8p per share, a 14% increase.

The AIM traded company said the performance was in line with its expectations and that trading would be "much stronger" in the second half of the financial year due to the timing of traffic surveys and outdoor events taking place.

Furthermore, the second half of the year will include the impact of newly acquired systems development and data analytics company Compass Informatics Limited, which generated revenue of €4.8m and profit before tax of €0.6m in the year ended 30 September while increasing the company's Irish presence significantly.

It will also see a full contribution from Cash & Traffic Management Limited, which generated revenue of £5.5m and normalised profit before tax of £0.35m in the year ended 28 February 2018.

John McArthur, chief executive of Tracsis, said: "This was another busy period for the group and we have made good progress in delivering to our strategy of organic and acquisitive growth. We were pleased to have completed two acquisitions in the period which will benefit the second half of the financial year, and also secured a significant software contract which is strategically important for Tracsis and the wider rail industry."

Tracsis' shares were down 0.58% at 618.90p at 1220 BST.