Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Tracsis progresses shift to SaaS model in first half

(Sharecast News) - Transport technology provider Tracsis said in a trading update on Thursday that it continued its progress in executing its strategic plans for growth in its first half, as it transitioned to a broader software-as-a-service (SaaS) operating model. The AIM-traded firm said its financial performance aligned with expectations, with anticipated growth in the second half of 2024 due to milestone delivery timelines and transitioning to SaaS for new contract wins in North America.

Revenue for the six months ended 31 January was expected to exceed £36.5m, with an adjusted EBITDA margin of around 16%, reflecting investments made to bolster leadership capabilities and expand the pipeline of large multi-year opportunities.

Despite a slight decrease in cash balances compared to the prior year, Tracsis said it had maintained a robust financial position with approximately £16.8m in cash, enabling continued investment in technology and acquisitions.

Full-year expectations remained unchanged, with the board anticipating performance in line with market expectations.

The company said it had also secured new contracts post-period, expected to contribute to revenue in the latter part of the financial year.

In the rail technology and services division, significant growth in the addressable pipeline for major software opportunities in both the UK and North America markets had been achieved.

New contract awards in the UK included the deployment of the 'Hopsta' smart ticketing mobile app platform and the enhancement of the 'RailHub' safety and risk management platform.

In North America, focus had been on completing the deployment of the new computer-aided dispatch product with a US transit operator, with additional contracts secured for yard automation product offerings.

The data, analytics, consultancy, and events division had meanwhile experienced revenue growth slightly ahead of expectations, driven by high activity levels in events and traffic data survey work supporting UK transport infrastructure projects.

Tracsis said the launch of Tracsis Geo Intelligence targeted the deployment of earth observation technology in the UK and North America rail markets.

The company said it was continuing to progress its transformation activities as planned, incurring exceptional costs of £1.3m in the period to deliver that transformation, with total expected costs of about £2m for the full year.

Those actions were intended to transform the operating model and accelerate future growth trajectories, in line with the board's expectations.

"We continue to see significant software growth opportunities in the UK and North American rail technology markets, as the industry looks to modernise and adopt digital solutions," the board said in its statement.

"The actions taken to transform our operating model and to accelerate pipeline growth leave the group well-positioned to deliver further growth."

At 1259 GMT, shares in Tracsis were down 4.05% at 887.5p.

Reporting by Josh White for Sharecast.com.

Share this article

Related Sharecast Articles

Billionaire Issa nearing deal to sell Asda stake to TDR Capital - report
(Sharecast News) - US private equity firm TDR Capital is reportedly closing in on a deal to buy petrol station billionaire Zuber Issa's stake in supermarket chain Asda.
Billionaire Issa nearing deal to sell Asda stake to TDR Capital
(Sharecast News) - Private equity firm TDR Capital is reportedly closing in on a deal to buy petrol station billionaire Zuber Issa's stake in supermarket chain Asda.
DS Smith tumbles as Mondi abandons pursuit
(Sharecast News) - DS Smith tanked on Friday after Mondi said it would not be making an offer for the rival packaging group, clearing the path for a takeover by International Paper.
Eqtec agrees amendment to Verde subscription
(Sharecast News) - Waste-to-energy technology developer Eqtec updated the market on the Verde Corporation subscription on Friday, confirming that an amendment to the subscription letter had been agreed upon with Verde.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.