RNS Number:6383P
Trafficmaster PLC
11 September 2003
11th September 2003
Trafficmaster plc
2003 Interim Results
Trafficmaster plc, the leading supplier of digital traffic information and
intelligent navigation services, today announced its interim results for the six
months to 30th June 2003.
Summary
* Group returned to operating profit on continuing operations in H1 2003 -
#52,000 (H1 2002 loss of #3.4m)
* Pre-tax loss narrowed to #0.78m (H1 2002 #4.92m)
* Excellent progress at Smartnav
- Recent deals announced with Chrysler & Jeep, Peugeot, Mazda, Mitsubishi
and Hyundai
- New deal announced today with Citroen
* Strong first half from traffic information business
* Stolen vehicle unit, Trackstar, gross profit up 85% to #646,000
* US fleet business, Teletrac, produced trading profit
* Cash stood at #5.2 million as at 30 June 2003 (#5.7m at 31 December 2002)
Sir James McKinnon, Chairman of Trafficmaster, commented:
"We are pleased with developments in the first half. The company has made good
progress towards profitability. We now have a number of market-leading products
to complement what is widely regarded as the best traffic information available
in the UK. The group's strong trading performance has continued in July and
August and we look forward to continuing the encouraging trends that have been
delivered in the first half of the year."
For further information please contact:
Trafficmaster Tel: 01234 759 300
David Martell, Chief Executive
Nigel Bond, Finance Director
Financial Dynamics Tel: 020 7831 3113
Ben Atwell / Lucy Briggs
Trafficmaster Interim Statement
Trafficmaster's steady progression to sustainable profitability is proceeding on
track, driven by good trading and tight cost controls in each of the company's
four trading divisions. An indication of this positive trend is the group's
return to an operating profit on continuing operations for the first half of
2003, the first since 2000. The group's trading performance is expected to
continue to improve in the second half of this year. With the growing number of
motor manufacturers endorsing our Smartnav advanced navigation system boding
well for the future performance of the company.
All four trading divisions, Smartnav, UK traffic products, RAC Trackstar and
Teletrac have made good advances so far this year.
Smartnav has made excellent progress. Since our last results, Trafficmaster has
completed agreements with Chrysler & Jeep, Peugeot, Mitsubishi, Mazda, and
Hyundai - all of whom are making Smartnav available as an optional approved
accessory on their vehicles in the UK. In addition, Smartnav has won accolades
from the motoring press and the Consumer Association's publication "Which?". By
providing a "complete" product that combines satellite navigation with
Trafficmaster's traffic flow data, it provides people with a genuine solution to
current problems of crowded roads and increasing traffic congestion.
I am pleased to announce today a further deal for the distribution of Smartnav
with Citroen. From 22nd September Smartnav will be available as an approved
accessory on all Citroen models. We expect further announcements over the
coming months in respect of further new distribution contracts which will
continue to drive rapid sales growth for the remainder of this year and through
2004.
Financial Results
A strategy of concentrating on areas of the business that can demonstrate
sustainable profitability is showing good progress. The group achieved a solid
turn around in trading performance in the first half of this year, generating an
operating profit for continuing operations of #52,000 against a comparative
operating loss for the equivalent period last year of #3.47m. Pre-tax losses
continued to narrow during the first half. For the first six months they were
#0.78m compared to #4.92m for H1 2002 and #8.12m for H1 2001. Following the
withdrawal from Teletrac RF operations in Florida and elimination of revenues
received from discontinued activities in Italy and the UK, revenues were #14.90m
against #18.66m for H1 2002. Teletrac generated #7.20m turnover (2002 #8.63).
Group selling, distribution and administration costs were further reduced to
#8.89m (2002 H1 #14.93m).
Trafficmaster's cash balances remain strong at #5.20m compared with #5.72m at
31st December 2002. Teletrac has bonds due for repayment in October 2004 of
$15.00m. This debt is not secured by Trafficmaster Plc.
Smartnav
Sales have grown strongly through rapidly growing distribution channels and the
product is now available from nearly 1,500 outlets across the UK.
The product has earned accolades from the press, consumer organisations, the
motor industry, and importantly, customers. We continue to develop the product
and have added two additional subscription options to the product over the last
six months, thereby growing the recurring revenue model. Customer satisfaction
levels are over 97%.
In Smartnav, the company has developed a product that enjoys true consumer
appeal and we intend to use every means at our disposal to develop this in the
marketplace by adding further distribution channels in the coming months.
UK Traffic Information Business
Trafficmaster prides itself in providing the best and most comprehensive traffic
data in the marketplace. Its brand recognition is growing within the consumer
marketplace as a symbol of quality. We provide our data through partnerships
including MG Rover, BMW, Citroen, the RAC, O2, Orange, Vodafone, Virgin Mobile,
and Norwich Union.
The UK traffic business has had a strong first half of 2003, performing ahead of
our expectations. Mobile telephone services, in particular, continue to provide
a growing market opportunity and increasingly GPRS telephones have given
Trafficmaster new opportunities to provide services using this medium. During
2003 the company has commenced "pictorial" traffic services on the Nokia 3650
and 7650 handsets, together with the Sony Ericsson P800 Smartphone. We expect a
number of other new traffic services to be launched over the next few months.
Trackstar Limited
RAC Trackstar continues to be the leading GPS/GSM stolen vehicle tracking
product in the UK with gross profit growing by 85% to #646,000 for the first six
months (H1 2002: #349,000). The product continues to gain new distribution
channels and to generate strong support from the insurance industry who welcome
the product's advanced features and cost effectiveness. A number of additional
advanced product features are expected to be launched over the next six months
to maintain the product's momentum.
Teletrac Inc
Continued cost reduction in Teletrac, our US fleet trading business, has been
successfully implemented. Withdrawal from RF operations in Florida at the end
of last year has resulted in lower revenue figures, but attention to gross
margin and tight control of overheads during the period has resulted in the
company producing a trading profit. With a number of opportunities ahead of it,
we expect this trend to continue.
Prospects
We are pleased with developments in the first half. The company has made good
progress towards profitability. We now have a number of market-leading products
to complement what is widely regarded as the best traffic information available
in the UK. The group's strong trading performance has continued in July and
August and we look forward to continuing the encouraging trends that have been
delivered in the first half of the year.
Consolidated profit and loss account
For the six months ended 30 June 2003
Note Unaudited Unaudited Audited
6 months to 6 months to year to
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
______ ______ ______
Turnover: group and share of joint ventures
- continuing operations 15,230 18,441 34,960
- discontinued operations 4 548 664
______ ______ ______
15,234 18,989 35,624
Less: share of joint ventures - continuing
operations (333) (330) (694)
______ ______ ______
Group turnover 14,901 18,659 34,930
Cost of sales 2,3 (6,320) (8,723) (22,878)
______ ______ ______
Group gross profit 8,581 9,936 12,052
Selling and distribution costs 2 (1,711) (2,248) (4,679)
Administrative expenses 2,3 (7,177) (12,680) (67,214)
______ ______ ______
Group operating profit / (loss)
from continuing operations 52 (3,470) (39,317)
Group operating (loss) from
discontinued operations (359) (1,522) (20,524)
______ ______ ______
Group operating loss (307) (4,992) (59,841)
Share of operating loss in joint ventures 3 - (87) (2,677)
Share of operating loss in associate - - (26)
Amortisation of goodwill
arising on associate (90) (90) (180)
______ ______ ______
Total operating loss: group and
share of joint ventures and associates (397) (5,169) (62,724)
Profit on sale of business 3 - 559 559
Gain / (loss) on disposal of fixed assets 3 - - (526)
______ ______ ______
Loss on ordinary activities before interest (397) (4,610) (62,691)
Net interest (payable)/receivable and
similar income (378) (306) (612)
______ ______ ______
Loss on ordinary activities before taxation (775) (4,916) (63,303)
Taxation on loss on ordinary activities - - 31
______ ______ ______
Loss on ordinary activities after taxation (775) (4,916) (63,272)
Equity minority interest 36 186 3,979
______ ______ ______
Loss attributable to the shareholders
of Trafficmaster Plc (739) (4,730) (59,293)
______ ______ ______
Earnings per ordinary share - basic (0.59p) (3.76p) (47.10p)
- diluted (0.59p) (3.76p) (47.10p)
Consolidated statement of total recognised gains and losses
For the six months ended 30 June 2003
Unaudited Unaudited Audited year to
6 months to 6 months to 31 December
30 June 2003 30 June 2002 2002
#000 #000 #000
______ ______ ______
Loss for the period attributable to the
shareholders of Trafficmaster Plc (739) (4,730) (59,293)
Net exchange differences on
foreign investments 76 1,284 896
______ ______ ______
Total recognised gains and losses
relating to the period (663) (3,446) (58,397)
______ ______ ______
Consolidated balance sheet
For the period ended 30 June 2003
Unaudited at Unaudited at Audited at
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
______ ______ ______
Fixed assets
Intangible fixed assets 2,178 19,850 1,889
Tangible fixed assets 13,905 48,170 14,902
Investments in joint ventures
Share of gross assets 134 2,751 290
Share of gross liabilities (567) (240) (724)
______ ______ ______
(433) 2,511 (434)
Loan to joint ventures 550 550 550
117 3,061 116
Interest in associated undertakings 1,018 1,225 1,108
______ ______ ______
1,135 4,286 1,224
______ ______ ______
17,218 72,306 18,015
Current assets
Stocks 4,935 8,677 6,310
Debtors due within one year 5,756 5,785 4,695
Debtors due after more than one year 146 - -
5,902 5,785 4,695
Investments 420 550 420
Cash at bank and short- term deposits 5,204 7,151 5,729
______ ______ ______
16,461 22,163 17,154
Creditors:
Amounts falling due within one year (6,000) (6,591) (6,964)
______ ______ ______
Net current assets 10,461 15,572 10,190
______ ______ ______
Total assets less current liabilities 27,679 87,878 28,205
Creditors:
Amounts falling due after more
than one year (9,129) (10,114) (9,350)
Deferred Income (1,969) (1,444) (1,569)
Provisions for liabilities and charges
Investments in joint ventures
Share of gross assets - 298 -
Share of gross liabilities (208) (732) (208)
______ ______ ______
(208) (434) (208)
(208) (434) (208)
Net assets 16,373 75,886 17,078
______ ______ ______
Capital and reserves
Called up share capital 6,294 6,294 6,294
Share premium account 90,759 90,759 90,759
Profit and loss account (80,293) (24,679) (79,630)
______ ______ ______
Equity shareholders' fund 16,760 72,374 17,423
Equity minority interest (387) 3,512 (345)
______ ______ ______
16,373 75,886 17,078
_____ ______ ______
Consolidated cashflow statement
For the six months ended 30 June 2003
Note Unaudited Unaudited Audited
6 months to 6 months to year to
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
______ ______ ______
Net cash inflow/(outflow) from operating activities 4 648 4,108 6,013
Returns on investments and servicing of finance (387) (398) (809)
Taxation - - (10)
Capital expenditure and financial investments (596) (3,557) (4,438)
Acquisitions and disposals - 459 (1,500)
______ ______ ______
Cash outflow before management of
liquid resources and financing (335) 612 (744)
Management of liquid resources (738) 1,334 2,483
Financing (89) (179) (225)
______ ______ ______
(Decrease)/increase in cash in the period (1,162) 1,767 1,514
______ ______ ______
Reconciliation of net cashflow to movement in net (debt)/funds
(Decrease)/increase in cash in the period (1,162) 1,767 1,514
Cash outflow from repayment of debt 89 179 225
Increase/(decrease) in short-term deposits 738 (1,334) (2,483)
______ ______ ______
Change in net funds arising from cashflows (335) 612 (744)
Exchange differences 322 664 1,071
===== ===== =====
Change in net (debt)/funds (13) 1,276 327
Opening net debt (3,912) (4,239) (4,239)
______ ______ ______
Closing net debt (3,925) (2,963) (3,912)
===== ===== =====
Notes to the financial accounts
1. Basis of preparation
The interim financial statements are prepared on the basis of the accounting
policies set out in the accounts for the year ended 31 December 2002.
The interim financial statements are unaudited but have been reviewed by the
Auditors and their report to the directors is set out on page 11. The statements
do not constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985. Full accounts of Trafficmaster Plc for the year ended 31
December 2002, on which the Auditors gave an unqualified report, have been
delivered to the Registrar of Companies.
2. Analysis of continuing and discontinued operations:
Unaudited Unaudited Audited year to
6 months to 6 months to 31 December
30 June 2003 30 June 2002 2002
#000 #000 #000
______ ______ ______
Cost of sales
- continuing operations 6,320 8,608 22,763
- discontinued operations - 115 115
______ ______ ______
6,320 8,723 22,878
______ ______ ______
Selling and distribution costs
- continuing operations 1,711 1,897 4,274
- discontinued operations - 351 405
______ ______ ______
1,711 2,248 4,679
______ ______ ______
Administrative expenses
- continuing operations 6,814 11,076 46,546
- discontinued operations 363 1,604 20,668
______ ______ ______
7,177 12,680 67,214
______ ______ ______
Discontinued operations relate to the closure of the group's operations in
Germany and elsewhere in Europe.
3. Exceptional items
Unaudited Unaudited Audited year to
6 months to 6 months to 31 December
30 June 2003 30 June 2002 2002
#000 #000 #000
______ ______ ______
Exceptional operating items:
Tangible fixed assets - - 24,979
Intangible fixed assets - - 18,005
Investments - - 2,276
Stock - - 7,750
Debtors - - 851
Creditors: Amounts falling due
within one year - - (929)
Foreign exchange adjustment - - 78
______ ______ ______
- - 53,010
______ ______ ______
Profit on sale of business - (559) (559)
Loss on disposal of fixed assets - - 526
______ ______ ______
The exceptional operating items related to fixed asset impairment reviews,
provisions against certain current assets and provisions for certain costs in
respect of the companies within the group and were charged as follows:
Cost of sales 7,750
Administrative expenses 42,984
Share of operating loss in joint venture 2,276
______
53,010
______
4. Reconciliation of operating profit to net cash inflow from operating activities
Unaudited Unaudited Audited year to
6 months to 6 months to 31 December
30 June 2003 30 June 2002 2002
#000 #000 #000
______ ______ ______
Group operating loss for the period (307) (4,992) (59,841)
Depreciation and amortisation 1,141 4,385 8,655
Impairment - - 42,984
Provision against current asset investment - - 130
Transfer from infrastructure stock - - 6,080
Loss on disposal of fixed assets - 45 -
Decrease in stock 1,375 3,024 5,347
(Increase)/decrease in debtors (1,210) 2,144 3,321
(Decrease) in creditors (351) (498) (663)
______ ______ ______
Net cash inflow from operating activities 648 4,108 6,013
______ ______ ______
5. Earnings per share
The calculation of earnings per ordinary share is based on the consolidated loss
for the six months ended 30 June 2003 of #739,000 (2002: loss #4,730,000) and
the weighted number of ordinary shares in issue during the period of 125,882,737
(2002: 125,882,737) ordinary shares.
The company's share options are not diluted for earnings per share calculations
because the share options exercise prices are greater than the current market
price.
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