ITIS Holdings PLC
01 November 2006
ITIS Holdings plc (the 'Company' or 'ITIS')
Results for the six months ended 30th September 2006
ITIS Holdings plc, a leading road traffic information and data specialist, is
pleased to announce its results for the six months ended 30th September 2006.
Highlights
• Turnover up 41% to £8.9m (Six months ended 30th September 2005: £6.3m);
• Profit before tax up 298% to £1.8m (Six months ended 30th September 2005:
£0.45m);
• UK business continues to trade ahead of expectations;
• Contracts renewed for RDS-TMC with the BMW Group, Ford Motor Company and
TomTom;
• Cash balance increased to £7.2m from £5.7m at 31st March 2006.
Stuart Marks, Chief Executive of ITIS Holdings plc, commented:
'We are very pleased with this excellent set of results which underline the
strength of our business strategy. The Company has continued to deliver
substantial growth which has led to our profits for the first half of this
current financial year exceeding the pre-exceptional profits that we achieved
during the whole of the last year. Within our AGM statement on 20th September
2006 we reported that 'all areas of our UK business have traded strongly'. This
has continued to be the case and, therefore, our current expectations for full
year profits are now slightly ahead of those we had anticipated in September.
ITIS is now established as a highly profitable and leading supplier of real time
traffic information with largely fixed costs and a broad base of customers and
applications. We now have over 350,000 users of our RDS-TMC service across
eighteen car manufacturers and seventeen aftermarket providers. The market for
both line fit and aftermarket satellite navigation systems is forecast to
continue to grow in the UK and we expect ITIS will remain the preferred provider
of information to this market. With substantial and increasing cash reserves,
strong management and proven services the Board are confident that ITIS is well
positioned to take advantage of the world wide demand for accurate traffic
information.'
Financial Overview
For the six months ended 30th September 2006, Group turnover increased 41% to
£8.88m (2005: £6.29m). This increase in turnover came predominantly from the
Group's UK business - from traffic data sales to RDS-TMC customers; from data
sales to local and central Government and other third party organisations; and
from customers using the Group's various mobile telephone information services.
The Group continued to invest heavily in its research and development centre in
Israel during the period, spending £0.46m (2005 research and development
expenditure: £0.41m).
On a Group basis, profit before taxation increased 298% to £1.78m (2005: profit
before taxation £0.45m). These results again demonstrate that the Group's
operational infrastructure is capable of supporting incremental business and
that we are able to control our costs effectively.
Basic and diluted earnings per ordinary share were 1.8p, up 350% (2005 earnings
per ordinary share: 0.4p).
Cash balances at 30th September 2006 strengthened to £7.2m as against £5.7m at
31st March 2006.
As a sign of its confidence in the continuing growth and cash generation in the
business, the Board is considering the most efficient deployment of its cash
reserves. We will update shareholders further at the time of release of our
preliminary results for the year ending 31st March 2007.
UK Business Review
ITIS continues to derive almost all of its revenues from the UK. Our sustained
success in this competitive and still developing market is proof that ITIS
possesses strong management, high quality information and scaleable systems.
Our focus has been on supporting our customers by becoming an integral part of
their customer solutions rather than by competing with them by developing our
own hardware. When we announced our contract renewal with BMW for a further
five years on 11th September 2006, they commented 'We have conducted ongoing
testing of the service and are completely satisfied that the traffic information
which ITIS supplies meets all of our quality criteria whilst their understanding
and experience of TMC is significantly ahead of anyone else in this market.' We
expect the UK market to continue growing and as we have consistently
demonstrated, ITIS is ideally placed to take advantage of this.
RDS-TMC (Radio Data Service - Traffic Message Channel)
ITIS continues to dominate the delivery of real time traffic information to
factory fitted navigation systems, personal navigation devices and mobile
phones. Our service is established with eighteen car manufacturers; BMW,
DaimlerChrysler, Ferrari, Ford, Jaguar, Land Rover, Lexus, MINI, Mitsubishi,
Nissan, Porsche, Renault, Rolls Royce, Saab, Subaru, Toyota, Vauxhall (GM) and
Volvo. In the period under review we announced contract renewals with BMW, the
Ford Motor Company and TomTom. BMW have been a customer since 2002 and this new
contract will see ITIS provide data until 2012. Aftermarket and portable device
customers include AA Navigator, Bose, Clarion, Co Pilot, Harman Becker,
Navicore, Naviflash, Navman, Panasonic, Pioneer, Siemens VDO, Sony Europe,
TomTom, ViaMichelin and Way Finder. The size and scope of our customer base is
the proof that ITIS provides the highest quality traffic information and has
unparalleled knowledge and experience of the Traffic Message Channel.
Currently ITIS supports over 350,000 users of TMC and this is number increasing
rapidly. We expect that the penetration of in-vehicle satellite navigation
systems in the UK will continue to rise as only 8% of new cars sold have
navigation fitted as standard or as an option compared to 24% in Germany. The
personal navigation device market is extremely competitive and is moving towards
a model where traffic information is bundled into the price of the unit rather
than a monthly subscription. We expect to see our revenues grow in this market
as this strategy becomes widely adopted by all the leading manufacturers.
Other Services
We announced on 23rd October 2006 that we had entered into a partnership with
Clear Channel to operate a new cross network short dial traffic service called '
The Hound' which is being promoted extensively on Clear Channel media sites
throughout the country. ITIS has established short dial traffic information
services with the AA, Vodafone, T-Mobile and various other networks. Through
all of these channels, customers express a high degree of satisfaction with the
services and once trialled, ongoing regular usage is likely. It is expected
that the partnership with Clear Channel will be an effective means of generating
initial customer trials.
We announced on 26th October 2006 that the Department for Transport had extended
its contract with ITIS to supply historic traffic information until February
2008. As part of this contract, all local authorities receive limited historic
data from ITIS and we have enjoyed some success in selling real time data and
more detailed historic information to a small number of them. Sales in this
area take time because our data is relatively new and prospective customers need
to undertake rigorous evaluation. In the medium term, as the Government seeks
to understand better how congestion can be managed and continues to work more
closely with the private sector, we are confident that this will become an
important revenue stream.
International Business Review
Internationally, we use both our Floating Vehicle Data and our Cellular Floating
Vehicle Data (CFVD) technologies. CFVD works on a combination of our highly
developed algorithms and specific information provided by mobile networks.
Cooperation from the networks and their ability to provide us with the data we
require can vary, not only from country to country but from network to network.
Given the critical nature of the networks' involvement, we look for markets
where we can develop a strong relationship with our chosen network partner,
combined with private or public sector revenues.
We have a significant R&D operation based in Israel focussed on further
developing our software and algorithms and a dedicated team in the UK currently
supporting existing deployments. The size and experience of the team is such
that additional business can be accommodated within the existing infrastructure.
The Board recognises that progress in the US has been slower than we would have
liked following the encouraging start with the contract wins with the Maryland
and Missouri Departments of Transport. However, our cost exposure in the US
market is minimal due to our decision to partner with Delcan - a US based
organisation which already has significant resources committed to serving the
DOTs.
We remain focussed on fulfilling our obligations to deliver traffic information
in the State of Missouri and continue to believe that the global market for
traffic information is vast and that ITIS will be able to compete effectively.
We have proven with trials in the US, Belgium, Scotland and Israel that our CFVD
technology is robust, highly accurate and scalable. We also have the necessary
experience and resources to handle complex and large deployments. At our AGM on
20th September 2006, we announced that we had been selected by one of the
world's largest mobile operators to demonstrate how we can provide traffic
information in a large European metropolitan area. We are encouraged to see a
major network taking a lead in this technology.
Our business model for international markets will be determined by the scope of
work required, strength of local partners and geography. The Groups licensing
model for entering into new markets allows for controlled expansion and we have
already proven this model in Australia. We are confident that such new markets
can be profitable for ITIS in the short to medium term.
NavTrak
NavTrak continued to grow its subscriber base predominantly through our
principle automotive customers - Bentley Motors, Ferrari and Maserati. We
continue to develop business outside the UK by partnering with organisations
that can support the NavTrak brand and we currently have such relationships in
32 countries. Consistency and quality of service are very important to the
automotive industry and therefore the ability for a manufacturer to make one
vehicle tracking product standard throughout the world is an attractive
proposition.
Current Trading & Prospects
In recent years, ITIS has successfully delivered on its strategy to focus on
traffic information technologies through a largely fixed cost base and this has
turned the company into a respected and leading information provider.
ITIS is now entering an exciting phase of its development. The UK market
continues to experience strong growth and the Board believes that the potential
exists to add to this growth outside the UK. These strong results combined with
our excellent management, growing cash and proven technology, give the Board
good reason to be confident about the Company's future.
Contact: Stuart Marks, Chief Executive ITIS Holdings plc - 07768 454700
Ginny Pulbrook, Director Citigate Dewe Rogerson - 0207 282 2945
Consolidated profit and loss account
Note Six months to Six months to Year ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Restated Restated
(Note 1) (Note 1)
£ £ £
Group turnover 8 8,884,515 6,289,853 14,416,113
Cost of sales (3,672,885) (3,044,266) (6,982,244)
__________ __________ __________
Gross profit 5,211,630 3,245,587 7,433,869
Operating costs (3,544,723) (2,870,488) (5,630,145)
__________ __________ __________
Operating profit 1,666,907 375,099 1,803,724
Operating profit before exceptional item 1,666,907 375,099 1,472,456
Exceptional item 3 - - 331,268
Operating profit 1,666,907 375,099 1,803,724
Group interest receivable and similar income 116,433 73,214 158,723
Group interest payable and similar charges - (729) (2,123)
__________ __________ __________
Profit on ordinary activities before taxation 8 1,783,340 447,584 1,960,324
Tax on profit on ordinary activities - (6,528) 93,350
__________ __________ __________
Profit on ordinary activities after taxation 1,783,340 441,056 2,053,674
Minority interests (4,036) (4,578) (5,396)
__________ __________ __________
Profit for the financial period 1,779,304 436,478 2,048,278
__________ __________ __________
Basic and diluted earnings per ordinary share (p) 4 1.8 0.4 2.1
__________ __________ __________
Consolidated statement of total recognised gains and losses
Note Six months to Six months to Year ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Restated Restated
(Note 1) (Note 1)
£ £ £
Profit for the financial period 1,779,304 436,478 2,048,278
Currency translation difference 2,078 1,893 1,858
Prior period adjustment - adoption of FRS20 Share Based 1 26,128 - -
Payments
__________ __________ __________
Total recognised gains relating to the period 1,807,510 438,371 2,050,136
__________ __________ __________
Consolidated Balance Sheet
Note 30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Restated Restated
(Note 1) (Note 1)
£ £ £
Fixed assets
Intangible assets 502,515 733,109 617,812
Tangible assets 925,874 515,408 659,746
__________ __________ __________
1,428,389 1,248,517 1,277,558
__________ __________ __________
Current assets
Stocks 283,442 286,493 374,998
Debtors
- due within one year 4,982,087 3,189,698 4,300,432
- due after more than one year 27,500 55,000 40,000
Cash at bank and in hand 7,169,519 4,718,100 5,697,498
__________ __________ __________
12,462,548 8,249,291 10,412,928
Creditors: Amounts falling due within one year (4,924,240) (3,605,133) (4,434,618)
__________ __________ __________
Net current assets 7,538,308 4,644,158 5,978,310
__________ __________ __________
Total assets less current liabilities 8,966,697 5,892,675 7,255,868
Creditors: Amounts falling due after more than one year
- accruals and deferred income (516,732) (811,536) (601,991)
Provisions for liabilities and charges (36,290) (109,766) (54,459)
__________ __________ __________
Net assets 8 8,413,675 4,971,373 6,599,418
__________ __________ __________
Capital and reserves
Called-up share capital 5,230,270 5,230,270 5,230,270
Share premium account 38,070,740 38,070,740 38,070,740
Profit and loss account (34,955,537) (38,348,684) (36,736,919)
Other reserve 54,967 10,666 26,128
__________ __________ __________
Equity shareholders' funds 8,400,440 4,962,992 6,590,219
7
Minority Interests - equity 13,235 8,381 9,199
__________ __________ __________
Total capital employed - equity 8,413,675 4,971,373 6,599,418
__________ __________ __________
Consolidated Cash Flow Statement
Note Six months to Six months to Year ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Restated Restated
(Note 1) (Note 1)
£ £ £
Net cash inflow from operating activities 5 1,792,014 505,789 1,765,284
__________ __________ __________
Returns on investments and servicing of finance
Interest element of finance lease rental payments - (729) (2,123)
Interest received 116,433 73,214 158,723
__________ __________ __________
Net cash inflow from returns on investments and servicing of 116,433 72,485 156,600
finance
__________ __________ __________
Taxation
Foreign tax paid - - (20,300)
Research and development tax credit 20,924 128,613 127,124
__________ __________ __________
Net cash inflow from taxation 20,924 128,613 106,824
__________ __________ __________
Capital expenditure and financial investment
Purchase of tangible fixed assets (459,428) (161,523) (489,566)
__________ __________ __________
Net cash outflow from capital expenditure (459,428) (161,523) (489,566)
__________ __________ __________
Cash inflow before financing 1,469,943 545,364 1,539,142
__________ __________ __________
Financing
Issue of share capital - 771,847 771,847
Capital element of finance lease rental payments - (14,345) (28,690)
__________ __________ __________
Net cash inflow from financing - 757,502 743,157
__________ __________ __________
Increase in cash 6 1,469,943 1,302,866 2,282,299
__________ __________ __________
Notes (unaudited)
1. Accounting policies
The interim accounts have been prepared using accounting policies stated in the
Company's Report and Accounts for the year ended 31 March 2006 and have been
neither audited nor reviewed.
FRS 20 Share Based Payments was adopted in the period. FRS 20 requires the Group
to recognise a charge in the Profit and Loss account and a credit in equity to
reflect the fair value of outstanding share options issued to employees. Share
compensation charges have been recognised in the period and comparative periods
have been restated to include a similar charge (see note 7).
FRS 25 Financial Instruments: Disclosure and Presentation was adopted in the
prior year. This has resulted in a change in the presentation of the Group's
deferred shares. These are now classified as equity rather than non-equity.
2. Preparation of the interim financial information
The summarised results for the six months to 30 September 2006 and the
comparative results for the half year to 30 September 2005 are non-statutory
accounts within the meaning of Section 240 of the Companies Act 1985 and have
not been reported upon by the auditors under Section 235 of the Companies Act
1985.
The comparative figures for the year ended 31 March 2006 are an abridged version
of the Company's full accounts and, together with other financial information
contained in these interim results, do not constitute statutory accounts of ITIS
Holdings PLC within the meaning of section 240 of the Companies Act 1985. The
statutory accounts for the year ended 31 March 2006 have been delivered to the
Registrar of Companies. The report of the auditors was not qualified and did not
contain a statement under Sections 237 (2) and (3) of the Companies Act 1985.
3. Turnover
Included within turnover for the year-ended 31 March 2006 is an amount of
£354,297. This amount, net of associated expenses of £23,029, has been shown as
an exceptional item of £331,268 on the face of the profit and loss account as it
relates to income from one of the Group's customers that related to the 2005
financial year. This was not declared to the Group until after publication of
the 2005 financial statements.
4. Basic and diluted earnings per ordinary share
Six months to Six months to Year ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Restated Restated
£ £ £
Profit for the financial period 1,779,304 436,478 2,048,278
__________ __________ __________
Weighted average number of ordinary shares in issue 100,620,099 97,446,256 100,120,420
__________ __________ __________
Basic and diluted earnings per ordinary share (p) 1.8 0.4 2.1
__________ __________ __________
5. Reconciliation of operating profit to cash inflow from operating
activities
Six months to Six months to Year ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Restated Restated
(Note 1) (Note 1)
£ £ £
Operating profit 1,666,907 375,099 1,803,724
Depreciation and amortisation of licences 308,597 254,699 552,934
Decrease (increase) in stocks 91,556 67,058 (21,447)
Increase in debtors (690,079) (339,894) (1,322,584)
Increase in creditors 404,363 223,888 867,563
Decrease in provisions (18,169) (85,727) (141,034)
Share compensation charge 28,839 10,666 26,128
__________ __________ __________
Net cash inflow from operating activities 1,792,014 505,789 1,765,284
__________ __________ __________
6. Reconciliation of net cash flow to movement in net funds
Six months to Six months to Year ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
£ £
£
Increase in cash in the period 1,469,943 1,302,866 2,282,299
Cash inflow from decrease in lease funding - 14,345 28,690
__________ __________ __________
Change in net funds resulting from cash flows 1,469,943 1,317,211 2,310,989
Translation differences 2,078 1,893 1,858
__________ __________ __________
Change in net funds in the period 1,472,021 1,319,104 2,312,847
Net funds brought forward 5,697,498 3,384,651 3,384,651
__________ __________ __________
Net funds carried forward 7,169,519 4,703,755 5,697,498
__________ __________ __________
7. Reconciliation of movements in Group shareholders' funds
Six months to Six months to Year ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Restated Restated
(Note 1) (Note 1)
£ £ £
Profit for the financial period 1,779,304 436,478 2,048,278
Other recognised gains and losses relating to the period 2,078 1,893 1,858
Issue of share capital - 771,847 771,847
Share compensation charge 28,839 10,666 26,128
__________ __________ __________
Net increase in Group shareholders' funds 1,810,221 1,220,884 2,848,111
Opening Group shareholders' funds 6,590,219 3,742,108 3,742,108
__________ __________ __________
Closing Group shareholders' funds 8,400,440 4,962,992 6,590,219
__________ __________ __________
8. Segmental analysis
The Directors are of the opinion that the Group operates in a single segment,
that of the provision of telematic products and services. Hence all turnover,
profits and net assets relate to this class of business.
Turnover by origin Turnover by destination
Six months to Six months Six months to Six months
to Year ended to Year ended
30 September 30 September 31 March 30 September 30 September 31 March
2006 2005 2006 2006 2005 2006
Unaudited Unaudited Audited Unaudited Unaudited Audited
£ £ £ £ £ £
United Kingdom 8,761,263 6,108,977 14,216,022 8,713,317 6,103,852 14,187,833
Mainland Europe - - - 47,946 5,125 28,189
U.S.A. 28,252 180,876 200,091 28,252 180,876 200,091
Other 95,000 - - 95,000 - -
_________ _________ _________ _________ _________ _________
Total 8,884,515 6,289,853 14,416,113 8,884,515 6,289,853 14,416,113
_________ _________ _________ _________ _________ _________
Profit (loss) before taxation Net assets
Six months to Six months Year ended Six months to Six months Year ended
to to
30 September 30 September 31 March 30 September 30 September 31 March
2006 2005 2006 2006 2005 2006
Unaudited Unaudited Audited Unaudited Unaudited Audited
Restated Restated Restated Restated
(Note 1) (Note 1) (Note 1) (Note 1)
£ £ £ £ £ £
United Kingdom 2,434,047 725,250 2,889,018 8,360,537 4,960,939 6,552,724
Mainland Europe (121,326) (82,813) (123,796) - - -
U.S.A. (167,250) 104,668 66,318 - - -
Other (299,521) (871,216) 53,138 10,434 46,694
(362,131)
_________ _________ _________ _________ _________ _________
Total 1,783,340 447,584 1,960,324 8,413,675 4,971,373 6,599,418
_________ _________ _________ _________ _________ _________
9. Interim statement
A copy of this announcement will be circulated to all registered shareholders of
the Company and copies will be available for members of the public upon
application to the Registered Office at Station House, Stamford New Road,
Altrincham, Cheshire, WA14 1EP.
This information is provided by RNS
The company news service from the London Stock Exchange
