Tracsis given trading boost as group expects £10m revenue hit

TRANSPORT SOFTWARE firm Tracsis said overall trading since the start of the Covid-19 crisis has been better than originally expected, but it has had an adverse impact on the business.

The Leeds-based group, which produces software that can prevent train delays and derailments, estimates that the pandemic’s impact on current year revenue will be around £10m, with its traffic data and events divisions most affected by project cancellations and postponements.

The firm expects to report fullyear revenues of around £46m.

Despite the Covid-19 challenges, the traffic and data services division has managed to secure new work and the impact of the reduced revenue on profitability has been mitigated to an extent by a range of actions taken to reduce costs.

Tracsis said its rail technology and services businesses have continued to trade very well as their performance is underpinned by high levels of recurring software revenue.

It is delivering a number of large multi-year projects whilst winning new work and said it has a good pipeline of future opportunities.

It added that current cash balances remain strong at around £16m, after all tax and acquisition related payments.

Analyst Andrew Darley at FinnCap said: “Tracsis has reported that the Covid-19 consequences have not been as bad as originally feared.

“The impact on revenue is expected to be of the order of £10m, leaving full-year revenue at around £46m versus withdrawn original forecasts of £55m.

“Cash is strong at £16m after the £12.5m initial consideration for iBlocks and the payment of all tax amounts due (VAT and PAYE without deferral) – so all balance sheet based strategic options for investment and M&A persist.

“Rail technology and services continued to trade very well with high levels of recurring software revenue, new business and a strong pipeline, from exciting opportunities from the March iBlocks acquisition and from continuing delivery of multi-year projects.”

Tracsis said a more detailed update will be provided in August.