Tracsis reports solid growth in first half

Rail, traffic data and transport technology specialist Tracsis reported a 34% increase in revenue in its interim results on Monday, to £39.2m, with organic revenue growth coming in at 13%.

The AIM-traded company said its rail technology and services division accounted for 69% of revenue growth in the six months ended 31 January, including recurring software licence revenue, and a strong performance in North America.

It said its data, analytics, consultancy, and events division saw an 11% increase in revenue growth.

Adjusted EBITDA increased 21% to £7.5m, compared to £6.2m in the first half of the 2022 financial year.

Tracsis said it invested in integrating its activities, technologies, and operating model in the period to accelerate future growth, resulting in a 76% increase in profit before tax to £2.3m.

The company had total cash balances of £17m with no debt at period, compared to £17.2m on 31 July, and £25.1m on 31 January last year.

Tracsis reported a positive start to third quarter trading, with high activity levels across the group.

The firm left its expectations for the full year unchanged, as the board announced an interim dividend of 1p per share.

“I am pleased with the first half performance which was in line with our expectations,” said chief executive officer Chris Barnes.

“We have seen strong revenue and adjusted EBITDA growth, underpinned by strong rail technology recurring revenue growth in both the UK and North America and new large contract wins across remote condition monitoring and smart ticketing.

“I am also delighted to see good growth in our data, analytics, consultancy and events division which is a huge testament to the team and all their hard work throughout the Covid pandemic to ensure that we could respond quickly to market demand post the removal of all lockdown restrictions.”

Barnes said the firm’s future opportunity pipeline was “strong”, with the UK rail industry's transition to a new Great British Railways structure set to drive interest in product solutions.

“Tracsis is well positioned to benefit from the digital transformation of the rail industry both in the UK and North American markets.

“We continue to invest in implementing a simplified and more integrated operating model to help us to execute our growth strategy, to improve the speed and robustness of large software-as-a-service programme delivery, to strengthen the resilience of our IT infrastructure, to attract and retain talent, and to meet our objectives of being carbon neutral by 2030.”

Tracsis was confident that there were strong growth prospects for all parts of its business, and so remained committed to implementing its overall strategic growth and investment plans,Chris Barnes added.

“We will continue to pursue organic and acquisitive growth, including greater investment in self-funded research and development supported by a strong balance sheet.”

At 1130 BST, shares in Tracsis were down 1.68% at 880p.

Reporting by Josh White for Sharecast.com.