RNS Number:1243S
ITIS Holdings PLC
17 November 2003
17 November 2003
ITIS Holdings plc (the "Company" or "ITIS")
Interim results for the six months ended 30th September 2003
ITIS Holdings plc: a leading UK road traffic information and data specialist, is
pleased to announce its interim results for the six months ended 30th September
2003.
Highlights
* New traffic information contract with Orange UK announced today to deliver
realtime traffic information on Orange World.
* New contracts for traffic information signed with BMW, Ford Motor Company,
Lexus, Saab and Subaru with further contracts due to be announced in the
second half.
* Three-year contract to supply Floating Vehicle Data (FVD) for network
management purposes to the Highways Agency.
* Final and exclusive terms agreed today for the Acquisition of a ground
breaking system for measuring and forecasting traffic flow based on
anonymously sampling the positions of cellular phones (the "Acquisition").
* Turnover up 186% to #3,156,000 (2002: #1,103,000)
* Loss for financial period reduced by 14% to #2,969,000 (2002: #3,466,000
loss)
* Strong cash position of #7.5 million at period end.
Stuart Marks, Chief Executive of ITIS Holdings plc commented:
"We are successfully implementing our strategy of providing services directly to
vehicle manufacturers, government and mobile phone networks. We are winning
major contracts on a regular basis and revenues continue to demonstrate
sustained and impressive growth, all of which will make a significant
contribution to our second half trading. Our attention at the same time
continues to be focussed on cash and cost control and ensuring that the fixed
cost base of providing our services is at a level where profitability can soon
be achieved and maintained. On this basis, the Directors remain confident that
the Company will reach profitability within current cash reserves.
We are pleased that we have finalised exclusive terms to acquire Estimotion Inc.
which delivers technology to support the markets ITIS already serves and like
FVD, is scaleable and operates on a low fixed cost. The technology enables us
to continue to lead the way in the automated collection and analysis of traffic
data but on a much wider scale than previously and to new levels of accuracy."
Enquiries:
Stuart Marks, Chief Executive
ITIS Holdings plc
Telephone: 0161 929 5788
Ginny Pulbrook, Director
Citigate Dewe Rogerson
Telephone: 020 7282 2945
Financial Overview
For the six month period ended 30th September 2003, turnover increased 186% to
#3,156,000 (2002: #1,103,000), which has resulted in an increase in gross profit
of #1,044,000 to #102,000 (2002: gross loss #942,000). Other operating costs
have again been stringently controlled, with the rise of #419,000 to #3,225,000
being attributable to: the costs associated with the acquisition of the
Estimotion traffic flow technology; ITIS covering certain of the running costs
of Estimotion since May 2003 and an increase in professional fees on the new
contracts signed. The increased revenue and continuing cost control has enabled
us to reduce the operating loss for the financial period to #3,123,000 (2002:
#3,748,000 loss).
At 30th September 2003, the cash balance of ITIS remained strong at #7.5
million. With increasing revenues, and the move to a mainly fixed cost basis on
the traffic information services side of the business, we will see a much
reduced cash usage in the second half of the year. The Directors are confident
that ITIS has sufficient cash to develop the business and to fully exploit the
opportunities afforded by the acquisition of the Estimotion technology in the UK
and internationally.
Business Review
Traffic Data Services
ITIS operates the world's largest commercial FVD system providing full coverage
of the UK's Strategic Road Network, totalling some 8,200 miles. The Company has
developed a strong traffic information business providing services in four
market segments including: mobile phone services; automotive; public sector and
logistics. Information is delivered to customers using appropriate
technologies. Examples of this include the 2222 traffic information service on
Vodafone and the delivery of information direct to in car satellite navigation
systems known as RDS-TMC.
RDS-TMC remains the only international standard for providing traffic data to a
navigation system. Virtually all screen based satellite navigation systems are
TMC compliant and vehicle manufacturers see this as a low cost entry point to
providing driver information services. ITIS has the exclusive licence to
broadcast RDS-TMC in the UK until 2012. The penetration of satellite navigation
systems is growing strongly year on year and whether offered as standard feature
or a factory fitted option, the ITIS RDS-TMC service comes at no cost to the
customer since the commercial agreement is between ITIS and the manufacturer
directly.
Over the last six months, ITIS have announced material contracts with a number
of the world's leading automotive companies including BMW, Ford Motor Company,
Lexus, Saab and Subaru and expect to announce further contracts with
manufacturers in the second half.
We announce today a new contract with Orange UK to deliver real time traffic
information on Orange World.
Orange customers will be the first to access the new AA Roadwatch service and
receive constantly updated traffic flow information displayed in colour . Users
can scroll up and down affected segments of any UK motorway and see a colour
coded scale that shows traffic conditions such as stationary, queuing, slow or
heavy traffic. This "at a glance" service is supplemented by incident reports
from AA Roadwatch, advising users of the cause of a specific problem as well as
additional ITIS data displaying traffic speed and delay extent.
The service will support a wide range of popular handsets including models from
Nokia, Motorola, Sony Ericsson and Sagem. Users will pay 50p allowing unlimited
access for up to 60 minutes
NavTrak
NavTrak is able to detect vehicle theft with the owner's keys, provide detailed
crime history and police liaison across 23 countries in Europe. NavTrak is now
recognised as the most comprehensive stolen vehicle tracking system and this is
endorsed by the number of vehicle manufacturers that not only approve the
product as an accessory but also fit it as standard on their vehicles. NavTrak
is recognised by top marques such as Ferrari, Maserati, Bentley, Landrover and
BMW.
The Acquisition
ITIS announced that it has finalised exclusive terms for the acquisition of
certain assets of Israel based Estimotion Inc. and Estimotion Ltd. ("Estimotion")
(the "Acquisition") by its wholly owned subsidiary, ITIS UK Limited. ("ITIS").
The initial consideration is US$0.3m and further payments of up to a maximum
US$4.2m are payable over the next three years. The principal activity of
Estimotion is the use of low cost and patented technology to provide a unique
system for measuring and forecasting traffic flow based on anonymously sampling
the position of mobile phones. The Directors believe the Acquisition marks an
important strategic move to further enhance ITIS' strong position in the fast
growing market for real time and predictive traffic information.
The terms of the Acquisition have been structured to minimise its impact on
ITIS' financial performance. Initial consideration of US$0.3m is payable in
cash to Estimotion on completion. Further payments up to a maximum of US$4.2m
are due over the three years following completion and are reliant upon the
achievement of certain milestones, a major part of which are linked to the
financial performance of ITIS.
Whilst Estimotion's turnover has been negligible to date, the low level of
operating costs is anticipated to have little impact on ITIS' financial
performance, particularly when balanced against the forecast upside of
commercialising this technology and the associated projected revenues.
Over the past two years, the Group has made significant technical and commercial
progress, resulting in its recognised position as a leading traffic information
provider. ITIS is credited with establishing the world's first commercial
application for Floating Vehicle Data ("FVD") and has been successful in using
FVD to generate growing revenues in the automotive, mobile telephony, Government
and logistics sectors in the UK. Customers include the Automobile Association
(AA), BMW, Ford Motor Company, Highways Agency, Toyota and Vodafone. The
Acquisition allows ITIS to utilise information already collected by cellular
networks as part of their day-to-day operations to further develop the business
in those areas that have already proven to be commercially successful. These
include RDS-TMC (the delivery of traffic information directly into a vehicle
satellite navigation system) and ITIS' telephone traffic services, which are
available across all networks on short dial numbers, such as 2222 on Vodafone.
ITIS has started to receive serious enquiries outside of the UK from government
organisations and from its existing international customers. As a result of
this, negotiations are already in advanced stages with several mobile networks
to use their data to launch traffic information services based on the Estimotion
technology. Whilst FVD is both scaleable and now operates on a fixed cost
basis, ITIS believe that it will be more cost effective and quicker to deploy
Estimotion's technology in these new markets given that there is no major city
in the world which does not support a mobile phone network.
Estimotion will enable ITIS to provide highly accurate urban traffic data as a
result of the large concentration of mobile phones in urban areas. This will be
of particular use to those cities looking at congestion charging or with chronic
traffic problems.
Reasons for Announcement of Acquisition
The Board expect completion of this transaction shortly and have chosen to
announce details today to coincide with the Interim Results and also the start
of the ITS World Congress in Madrid where ITIS is meeting with
potential and existing customers and wishes to demonstrate and discuss this
exciting new technology.
Strategy
Whilst recognising the success of NavTrak, the Board believe that the Group has
successfully demonstrated that the greatest potential for growth lies in the
traffic information and data market. The Board are therefore reviewing how
NavTrak might fit into the overall strategy of the Group.
Outlook
The significant revenue benefit of many of the contracts signed over the past
six months will become apparent in the second half of the current year and
consequently the Directors remain confident that the Company will reach
profitability within current cash reserves.
Consolidated profit and loss account
Note Six months to Six months to Year ended
30th September 30th September 31st March
2003 2002 2003
Unaudited Unaudited Audited
# # #
Turnover 3,155,760 1,102,945 3,821,977
Exceptional direct costs 9 - - (1,050,000)
Other cost of sales (3,053,778) (2,045,412) (5,346,229)
Cost of sales (3,053,778) (2,045,412) (6,396,229)
__________ __________ __________
Gross profit (loss) 101,982 (942,467) (2,574,252)
Other operating costs (3,225,102) (2,805,831) (5,636,844)
__________ __________ __________
Operating loss (3,123,120) (3,748,298) (8,211,096)
Interest receivable and similar income 154,913 284,357 544,615
Interest payable and similar charges (723) (1,929) (2,893)
__________ __________ __________
Loss on ordinary activities before taxation (2,968,930) (3,465,870) (7,669,374)
Tax on loss on ordinary activities - - 241,431
__________ __________ __________
Loss for the financial period (2,968,930) (3,465,870) (7,427,943)
__________ __________ __________
Basic and diluted loss per ordinary share (p) 3 (3.0) (3.5) (7.5)
__________ __________ __________
There are no recognised gains or losses other than those shown in the profit and
loss account above.
Consolidated Balance Sheet
Note 30th September 30th September 31st March
2003 2002 2003
Unaudited Unaudited Audited
# # #
Fixed assets
Intangible assets 375,540 414,502 395,138
Tangible assets 750,070 387,861 814,016
__________ __________ __________
1,125,610 802,363 1,209,154
__________ __________ __________
Current assets
Stocks 458,416 152,179 768,865
Debtors
- due within one year 3,799,071 2,119,471 2,741,985
- due after more than one year 885,312 500,000 953,438
Cash at bank and in hand 7,536,292 13,812,444 11,153,945
__________ __________ __________
12,679,091 16,584,094 15,618,233
Creditors: Amounts falling due within one year (3,997,290) (1,548,043) (3,727,608)
__________ __________ __________
Net current assets 8,681,801 15,036,051 11,890,625
__________ __________ __________
Total assets less current liabilities 9,807,411 15,838,414 13,099,779
Creditors: Amounts falling due after more than one year (1,242,224) (342,224) (1,565,662)
__________ __________ __________
Net assets 8,565,187 15,496,190 11,534,117
__________ __________ __________
Capital and reserves
Called-up share capital 5,186,286 5,186,286 5,186,286
Share premium account 37,342,877 37,342,877 37,342,877
Profit and loss account (33,963,976) (27,032,973) (30,995,046)
__________ __________ __________
Shareholders' funds 6 8,565,187 15,496,190 11,534,117
__________ __________ __________
Shareholders' funds may be analysed as:
7 As restated
Equity interests 5,347,319 12,278,322 8,316,249
Non-equity interests 3,217,868 3,217,868 3,217,868
__________ __________ __________
8,565,187 15,496,190 11,534,117
__________ __________ __________
Consolidated Cash Flow Statement
Note Six months to Six months Year ended
to
30th September 30th
September 31st March
2003 2002 2003
Unaudited Unaudited Audited
# # #
Net cash outflow from operating activities (3,770,115) (3,504,057) (6,480,904)
4
__________ __________ __________
Returns on investments and servicing of finance
Interest element of finance lease rental payments (723) (1,929) (2,893)
Interest received 140,964 284,357 726,068
__________ __________ __________
Net cash inflow from returns on investments and servicing of finance 140,241 282,428 723,175
__________ __________ __________
Taxation
Research and development tax credit 246,593 - -
__________ __________ __________
Net cash inflow from taxation 246,593 - -
__________ __________ __________
Capital expenditure and financial investment
Purchase of tangible fixed assets (124,326) (147,535)
(30,278)
Sale of tangible fixed assets - 5,000 19,950
__________ __________ __________
Net cash outflow from capital expenditure (124,326) (25,278) (127,585)
__________ __________ __________
Cash outflow before financing (3,507,607) (3,246,907) (5,885,314)
__________ __________ __________
Financing
Capital element of finance lease rental payments (110,046) (20,092) (40,184)
__________ __________ __________
Net cash outflow from financing (110,046) (20,092) (40,184)
__________ __________ __________
Decrease in cash (3,617,653) (3,266,999) (5,925,498)
5
__________ __________ __________
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 31st March 2003 and are have been neither audited nor
reviewed.
2. Preparation of the interim financial information
The summarised results for the six months to 30th September 2003 and the
comparative results for the half year to
30th September 2002 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 31st March 2003 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 31st March 2003 have been delivered to the Registrar of Companies.
The report of the auditors was not
qualified and did not contain any statements under Section 237 (2) or (3) of the
Companies Act 1985.
3. Basic and diluted loss per ordinary share
Six months to Six months to Year ended
30th September 30th September 31st March
2003 2002 2003
Unaudited Unaudited Audited
# # #
Loss for the financial period (2,968,930) (3,465,870) (7,427,943)
__________ __________ __________
Weighted average number of ordinary shares 98,420,884 98,420,884 98,420,884
in issue
__________ __________ __________
Loss per ordinary share (p) (3.0) (3.5) (7.5)
__________ __________ __________
Due to losses made, there is no difference between basic loss per ordinary share
and diluted loss per ordinary share.
4. Net cash outflow from operating activities
Six months to Six months to Year ended
30th September 30th September 31st March
2003 2002 2003
Unaudited Unaudited Audited
# # #
Operating loss (3,123,120) (3,748,298) (8,211,096)
Depreciation and amortisation of licenses 207,870 134,954 338,921
Decrease (Increase) in stocks 310,449 (42,531) (659,217)
(Increase) decrease in debtors (1,221,604) 705,668 (310,305)
Increase (decrease) in creditors 56,290 (551,683) 2,371,412
Profit on disposal of tangible fixed assets - (2,167) (10,619)
__________ __________ __________
Net cash outflow from operating activities (3,770,115) (3,504,057) (6,480,904)
__________ __________ __________
5. Reconciliation of net cash flow to movement in net funds
Six months to Six months to Year ended
30th September 30th September 31st March
2003 2002 2003
Unaudited Unaudited Audited
# # #
Decrease in cash in the period (3,617,653) (3,266,999) (5,925,498)
Cash outflow from decrease in lease funding 110,046 20,092 40,184
__________ __________ __________
Change in net funds resulting from cash flows (3,507,607) (3,246,907) (5,885,314)
New finance lease - - (500,000)
__________ __________ __________
Change in net funds in the year (3,507,607) (3,246,907) (6,385,314)
Net funds brought forward 10,643,899 17,029,213 17,029,213
__________ __________ __________
Net funds carried forward 7,136,292 13,782,306 10,643,899
__________ __________ __________
6. Reconciliation of movements in Group shareholders' funds
Six months to Six months to Year ended
30th September 30th September 31st March
2003 2002 2003
Unaudited Unaudited Audited
# # #
Loss for the financial period (2,968,930) (3,465,870) (7,427,943)
__________ __________ __________
Net reduction in Group shareholders' funds (2,968,930) (3,465,870) (7,427,943)
Opening Group shareholders' funds 11,534,117 18,962,060 18,962,060
__________ __________ __________
Closing Group shareholders' funds 8,565,187 15,496,190 11,534,117
__________ __________ __________
7. Non-equity shares
In the year ended 31st March 2003, the directors, having considered the terms of
the group's deferred shares in the light of the requirements of FRS 4,
reclassified these shares as non-equity interests. The comparative figures for
30th September 2002 have accordingly been restated.
8. Segmental analysis
The directors are of the opinion that the Group operates in a single segment,
that of the provision of telematics products and services. Hence all turnover,
profits and net assets relate to this class of business. All of the activities
were carried out in and supplied to the United Kingdom.
9. Exceptional item
Exceptional direct costs in the year ended 31st March 2003 comprise #650,000 in
respect of licence costs written off and #400,000 payable on renegotiation of a
commission agreement.
10. 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
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