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Highlights
- Revenue Growth: H1 FY25 revenue expected at £36.3m, up from £35.5m (like-for-like, excluding discontinued revenue).
- Profitability Impact: Adjusted EBITDA margin anticipated at 10% (down from 16% in H1 FY24) due to CP7 funding headwinds and lower profitability in Traffic Data & Events.
- Future Outlook: H2 FY25 revenue and margins expected to strengthen, driven by a robust order book, major contract wins, and seasonal uplift in Traffic Data & Events.
Tracsis plc (LSE:TRCS), a leading transport technology provider, has released a trading update for the six months ended 31 January 2025 (H1 FY25), highlighting steady revenue growth despite market pressures and signaling confidence in the performance for the second half of the year.
Stable Revenue Despite CP7 Headwinds
Tracsis expects to report H1 FY25 revenue of approximately £36.3m, up from £35.5m on a like-for-like basis (excluding £1.1m in discontinued Transport Consultancy revenue from H1 FY24). This growth came despite the anticipated decline in Remote Condition Monitoring hardware revenue, impacted by the Network Rail Control Period 7 (CP7) funding cycle.
The company's UK Rail Technology division continued to grow, bolstered by significant contract wins, including a multi-year PAYG Tap Converter system, the first intercity deployment of TRACS Enterprise in the UK, and the initial full deployment of Train Dispatch technology in the US.
Profitability Impacted by Market Conditions
Tracsis expects an adjusted EBITDA margin of around 10% for H1 FY25, down from 16% in H1 FY24, primarily due to:
- A £1m impact from CP7 funding delays.
- Lower profitability in the Traffic Data & Events segment, where performance is typically weighted towards the second half of the year.
H2 Set for Recovery with Pipeline
The company anticipates a rebound in H2 FY25, supported by:
- Recent contract wins and an expanding order book.
- The natural seasonality of the Traffic Data & Events business, which tends to deliver improved results in the latter part of the year.
- Pipeline conversion opportunities in both the UK and North American rail markets, with key procurement decisions expected in the coming weeks.
The UK rail market remains a point of focus, with the Board closely monitoring CP7 funding developments and the ongoing rail reform consultation.
Healthy Cash Position
Despite the challenges, Tracsis maintained positive cash generation, with £22.1m in cash reserves as of 31 January 2025 — up from £16.8m a year ago and £19.8m as of July 2024.
Positioned for Long-Term Growth
Tracsis' ability to secure key contracts, expand internationally, and maintain financial resilience positions the company well for long-term success. As rail markets adjust to new funding cycles and regulatory changes, Tracsis' data-driven and technology-led solutions remain in high demand.
“We’ve navigated a tough rail market with resilience, continuing to win major contracts while sustaining healthy cash flow,” the company noted. “With a strong order book and promising opportunities on the horizon, we are confident in delivering a stronger performance in the second half of FY25.”
