LONDON (ShareCast) - (Sharecast News) - Trakm8 said in a trading update on Tuesday that revenues for the year just ended totalled £18.2m, up 14% year-on-year, although it did warn of supply chain issues and inflationary pressures going forward.
The AIM-traded telematics firm said revenue from fleet customers totalled £11.3m, 19% more than last year, while revenue from Insurance customers amounted to £6.9m, 7% higher than last year after a strong fourth quarter for new policy sales and new customer launches.

It said it was expecting an adjusted profit before tax for the year ended 31 March in line with previous guidance of about £7k, swinging from an adjusted loss of £0.3m, and a profit after tax of £0.2m, compared to a loss of £1.2m in the 2021 financial year.

Cash generation from operating activities totalled £3.6m, which was "as expected", and at 31 March the group said it had net debt of £5.4m, or £7.0m after IFRS 16 changes, which was £0.5m higher than a year earlier, and a £0.8m reduction since 30 September.

At the year end, the group had £1m of cash on hand and a further £0.5m of available funds under an overdraft facility.

During the financial year, the group reduced its long term liability to HMRC by £0.9m to £0.9m, in line with an agreement reached last year.

Trakm8 said during the year, connections increased by 4% to 264,000, with fleet connections rising 1% to 71,000, and insurance and automotive connections growing 5% to 193,000.

The resulting recurring revenues in the year were ahead 5% to £9.8m, representing 54% of group revenues.

Software revenues, meanwhile, expanded 149% to £1.3m, representing 7% of group revenue.

"The group has had to deal with a number of significant supply chain challenges but, with the benefit of our fully integrated business model, has successfully avoided any meaningful interruptions to customer deliveries during the period," the board said in its statement.

"There has, however, been an impact on the group's costs and we estimate this amounted to £0.2m during the financial year."

Trakm8 said that during the year, several major contract awards, extensions and renewals were secured, while new products and solutions were introduced to the market that it said would continue to improve the costs and functionality of the solutions it sells.

"A major challenge for Trakm8 post Covid-19 and now the war in Ukraine will be the security of component supply where it faces challenges weekly of varying significance," the board said of the company's outlook.

"However, the group continues to take steps to minimise these risks.

"There are a number of fleet deployment contract renewals during 2022 which are important to the outcome for the year and the timing of which will lead to group revenue being second half weighted."

Trakm8 said growth in Insurance policy sales would depend on the level of activity from new customers, alongside a return to more normal sales at existing customers.

"Like many businesses, Trakm8 is currently experiencing significant salary and component inflationary pressures.

"Whilst it is unlikely that the group will be able to mitigate all of these cost increases, it is taking what steps it can to achieve this."

At 1356 BST, shares in Trakm8 Holdings were down 10.28% at 16.15p.

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