Software provider for rail, traffic and wider transport, Tracsis (LON:TRCS) saw its share price rally during the Thursday session after booking significant, but expected, growth in its revenues.
For the six month period ended 31 January 2020, the company reported that its revenues had hiked up to £26 million, from £18.8 million year-on-year.
Despite the apparent significance of such jump, the company had expected this extent of change, and said trading had been ‘in line with expectations’.
While choosing not to disclose the predicted figures within their statement on Thursday, the company also said that, “adjusted Profit are also expected to be ahead of the previous year”, where they stood at £4.2 million and £3.9 million respectively.
Tracsis went on to say that its Rail Tech and Services division traded ‘well’ as a result of recurring software revenue and multi-year contract wins. It also said its recent acquisition, Bellvedi, had performed well, and its rail businesses’ involvement in ‘major tenders’ would pave the way for further growth.
It continued, saying its Traffic and Data Services division is ‘highly second-half weighted, and thus its good performance during H1 exceeded expectations. It added that its acquired businesses – CTM and Compass Informatics – provided ‘strong contribution’ towards these results.
Tracsis strategy looking ahead
Discussing its outlook, the company finished its statement by saying:
“As highlighted previously, the Group continues to invest heavily in our technology base, and continues to make good progress developing the next generation of products for the transport industry.”
“The Group continues to review acquisition opportunities particularly in the Rail Technology & Services division as we seek to judiciously use cash balances to fuel growth.”
Investor notes
The company’s share price rallied 5.06% or 40.00p following the update, up to 530.00p per share 20/02/20 16:30 GMT. Analysts from finnCap reiterated their ‘Corporate’ stance on Tracsis stock. The Group’s p/e ratio stands at 27.96, their dividend yield is modest at 0.22%.
