RNS Number:3699W
ITIS Holdings PLC
24 May 2002
24th May 2002
ITIS HOLDINGS plc
2002 PRELIMINARY RESULTS
ITIS AGREES LONG TERM CONTRACT AND STRATEGIC RELATIONSHIP WITH THE AA
ITIS Holdings plc, a leading traffic information and vehicle tracking company
today announces its preliminary results for the year ended 31 March 2002.
HIGHLIGHTS
• ITIS agrees significant long term contract and strategic relationship with
Automobile Association Development Limited, part of the Automobile
Association (the AA), the UK's leading motoring organisation, worth £1m per
annum:
• ITIS to provide traffic flow information using Floating Vehicle Data
to AA Roadwatch, the traffic division of the AA;
• AA and ITIS to jointly market, manage and develop ITIS's successful
RDS-TMC services, currently being used by motor manufacturers, including
Toyota and BMW;
• AA has more than 12 million members and has agreed to evaluate
opportunities to market NavTrak, ITIS's vehicle tracking system,
potentially opening up a considerable marketing and distribution
network;
• Agreement to use complimentary skills to develop new products and
services together ;
• ITIS to have access to Floating Vehicle Data polled from the AA fleet
of 3,600 patrol vehicles.
• Floating Vehicle Data now endorsed by the AA and other customers.
• ITIS confirmed as General Motors Europe OnStar preferred partner for
developments of telematics services.
• RDS-TMC contracts in place with BMW, Toyota and Siemens VDO.
• Leading navigation system manufacturer, Alpine agrees promotion of ITIS's
RDS-TMC services.
• Increase in turnover by 153% to £1.48m (2001: £0.58m).
• Operating loss for the financial period of £8.49m (2001: £7.95m).
• Cash position remains strong at £17.1m as at 31st March 2002 (2001:
£25.7m).
• Increased revenue and cost reductions will significantly reduce cash usage
for 2002/2003.
Stuart Marks, Chief Executive of ITIS Holdings plc commented:
"Over the last 12 months, as greater clarity has emerged from vehicle
manufacturers regarding their telematics plans, the Company has made good
progress in refining and implementing its strategy of becoming a leading
telematics services provider in the UK and Europe.
The telematics market is now showing the first signs of real growth and ITIS,
with its unique propositions such as the provision of real time traffic flow
information via Floating Vehicle Data ("FVD") and NavTrak is now being
recognised as an attractive integral offering to consumers by the major motor
manufacturers and traffic information service providers.
This is best illustrated by the announcement today of our long term contract and
strategic relationship with Automobile Association Developments Ltd, part of the
Automobile Association (the AA), the UK's largest motoring organisation, and is
further reinforced by our relationship with General Motors' OnStar, Toyota, BMW
and Siemens VDO. Based on the increasing revenues and the substantial reduction
in our cost base, the Board are confident that ITIS is well capitalised to
exploit its leading industry position as the market expands significantly over
the next few years."
Enquiries:
Contact: Stuart Marks, Chief Executive
ITIS Holdings plc
Telephone: 020 7282 2940 until 13.00
Thereafter 07768 454 700
Ginny Pulbrook or Charles Vivian
Citigate Dewe Rogerson
Telephone: 020 7282 2940
There will be an analysts presentation at Citigate Dewe Rogerson's offices,
3 London Wall Building, EC2 at 9.30am.
Financial Overview
Turnover for the twelve months ended 31 March 2002 increased by 153 % to £1.48m
(2001: £0.58m). Loss after taxation of £8.49m (2001: £7.95m) was in line with
market forecasts and reflected a year of significant investment in our RDS-TMC
and FVD technologies.
At the 31 March 2002 our cash position remained strong at £17.1m (2001: £25.7m).
We have implemented stringent cost controls and we will continue diligently to
control our overheads whilst ensuring that the necessary funds are earmarked to
invest in those areas of the business where we can expect the greatest return.
In terms of financial management, many of the aims set out over the last 12
months have been achieved:
- significant reduction in cash burn achieved by an increase in revenues and a
sharp reduction in head count;
- converting relationships into contracts;
- focusing on the key areas of the business which are RDS-TMC, FVD and NavTrak.
In January 2002 the Company sold its interest in Novcom Limited, its Spanish
joint venture with Minorplanet Systems plc (Minorplanet) to Minorplanet, our
partner, for a consideration of £2.731m. The consideration was satisfied by cash
of £0.859m, offset by outstanding balances of £0.591m and a supplier credit of
£1.281m.
The AA
ITIS announces today that it has agreed a significant long term contract and
strategic relationship with the Automobile Association Developments Ltd, part of
the Automobile Association (the AA), worth £1 million per annum. Under the terms
of the Agreement ITIS will be responsible for supplying real time traffic flow
information to AA Roadwatch, the traffic and travel division of the AA, from
late November 2002, whilst the AA will jointly market, manage and develop ITIS's
successful RDS-TMC service, which is already used by a number of manufacturers
including Toyota and BMW. AA has more than 12 million members and has agreed to
evaluate opportunities to market NavTrak, ITIS's vehicle tracking system,
potentially opening up a considerable marketing and distribution network.
ITIS will be providing real time traffic flow data to AA Roadwatch collated via
a technique known as Floating Vehicle Data ("FVD"). As part of the agreement
ITIS will also have access to Floating Vehicle Data polled from the AA fleet of
3,600 patrol vehicles. FVD uses information from selected probe vehicles
operating across the strategic road network, including Eddie Stobart lorries and
National Express coaches, to provide both real time information, which can be
used to alert drivers to traffic flow and congestion, and historic information
which can be used to predict journey times and select routes.
This endorsement by the UK's leading motoring organisation is a significant
validation of ITIS's FVD network and our strategy to focus on relevant delivery
channels such as RDS-TMC. The AA is one of the most respected and recognised
brands in the UK.
Floating Vehicle Data ("FVD"):
In June last year we informed the Stock Market and the industry that we were
confident that real time traffic flow information for the strategic road network
in the UK could be provided using Floating Vehicle Data ("FVD") - a technology
which until now had been mainly the subject of academic theory. We have put the
theory into practice and now have a national 24-hour service - the world's
largest commercial FVD network. Coverage of the strategic road network will
develop progressively until it is fully operational ahead of the launch of our
service to the AA.
Key achievements include:
• Data is now sourced from a wide range of vehicles using a mixture of boxes
installed by ITIS and fleet operators with existing systems;
• Traffic Alert Generator (TAG), combining realtime and historic FVD with
journalistic sources, is operational;
• Data warehouse with over 150 million historic speed / position inputs has
facilitated the launch of Road Timetable;
• Fewer probes needed at lower cost per probe than originally anticipated.
The road timetable uses our historic data to calculate predictive journey times
for drivers based upon variable factors such as time of day, day of week. Using
TAG this information can be combined with other sources of real time data
allowing an operator to identify congestion of an exceptional rather than
recurrent nature.
Telematics services
In March, we were pleased to announce that OnStar confirmed that it had
appointed ITIS as its preferred partner to provide and manage a range of
telematics services in Europe following an extensive period of due diligence.
OnStar is currently unable to give an exact date when these services will be
launched but can confirm that it is working alongside ITIS for future projects.
RDS-TMC service : (Radio Data Service - Traffic Message Channel)
Our RDS-TMC service continues to be the easiest and most cost effective route
for manufacturers to offer telematics services and we still remain the only
provider of a high quality, national service.
We have also proven to the market that there is a choice for manufacturers for
the supply and distribution of traffic information.
The Toyota service was launched on time in January under the name ETA ('
Electronic Traffic Avoidance') and is currently available on the Avensis and
Corolla and will be extended to other models during the course of this year. It
was supported by a strong advertising campaign and has been well received by
their customers.
In April, BMW agreed to take our service as standard on the new 7 series. We
have evaluation agreements with several other manufacturers, all of whom see the
customer benefits to integrating high quality traffic information with on board
satellite navigation.
We are pleased to report that Siemens VDO are having considerable success in
selling Traffic Message Channel ("TMC") compatible navigation discs with both
their aftermarket and existing OEM fit products and we expect to see strong
growth in this area over the coming year.
We are also pleased to announce today that Alpine, the leading radio and
navigation system manufacturers, have agreed to promote our RDS-TMC service in a
similar deal to Siemens VDO.
NavTrak: Driver Services
The NavTrak business continues to make steady progress despite a significant
reduction during the year in marketing spend, operating costs and the removal of
the hardware subsidy. Connections for the financial year totalled 4,228 (2001:
3,121). The first half of the year saw better performance (H1: 2,722 H2: 1,506)
due to the hardware subsidy continuing through most of the first two quarters.
Total NavTrak subscribers stand at 7,512. 32% of connections have been to our
award winning proactive system - the only solution designed to combat the rising
incidence of vehicle theft using owners' keys. 40% of all connections are now
pre-paid for at least 1 year. 47% of prepaid contracts are for 2 years or more.
We have taken the opportunity to restructure our business processes, to
differentiate further our proposition and to improve margins. Today we have
announced a significant improvement to our award winning proactive system to
coincide with introduction of the Minorplanet AEM 4000 unit as our base
platform.
NavTrak is now firmly established as a leading consumer telematics brand
recognised by many leading insurance companies. We are confident that, with a
combination of innovative driver services and the backing of many major
organisations in the industry, the NavTrak business will continue the progress
achieved during the year.
Board changes
Mark Simpkins our Finance Director today announces that he will be leaving the
Company and the Board would like to thank him for his important contribution to
ITIS during and since the flotation process. He is being replaced by Andrew
Forrest (BEng, ACA) who is currently Financial Controller and has been with the
Company since 1999. Andrew Forrest is appointed with immediate effect as Chief
Financial Officer.
Current trading and prospects
In the context of the long product development cycle to which the OEM industry
works we are pleased with the excellent progress that the Company has made over
the last year. This is best illustrated by the announcement today of our long
term contract and strategic relationship with Automobile Association
Developments Ltd, part of the Automobile Association, the UK's largest motoring
organisation and is further reinforced by our relationship with General Motors'
OnStar, Toyota, BMW and Siemens VDO. Based on the increasing revenues and the
substantial reduction in our cost base, the Board are confident that ITIS is
well capitalised to exploit its leading industry position as the market expands
significantly over the next few years.
ITIS Holdings plc
Preliminary results for the year ended 31 March 2002
Consolidated profit and loss account
2002 2001
£ £
Turnover 1,480,520 585,226
Cost of sales (3,895,119) (1,688,653)
--------------- ---------------
Gross loss (2,414,599) (1,103,427)
Distribution costs (493,209) (615,068)
Impairment of fixed assets (896,000) -
Other administration expenses (6,659,842) (6,992,861)
Administrative expenses (7,555,842) (6,992,861)
--------------- ---------------
Group operating loss (10,463,650) (8,711,356)
Profit on sale of joint venture 1,533,971 -
Share of operating losses of joint venture (659,678) (50,000)
Goodwill amortisation- joint venture (236,111) (47,222)
Interest receivable 1,089,214 855,654
Interest payable and similar charges (7,121) -
-------------- ----------------
Loss on ordinary activities before taxation (8,743,375) (7,952,924)
Tax on loss on ordinary activities 255,843 -
--------------- -------------
Loss on ordinary activities after taxation (8,487,532) (7,952,924)
Dividends on non-equity shares - (89,781)
--------------- ---------------
Loss for the financial year (8,487,532) (8,042,705)
========= ========
p p
Basic and diluted loss per ordinary share (8.6) (11.1)
========= =========
All activity has arisen from continuing operations.
The group has no recognised gains or losses in either year other than the loss
for that year.
Consolidated balance sheet
2002 2001
£ £
Fixed assets
Intangible assets 435,501 512,520
Tangible assets 474,371 860,419
Investments
- joint ventures
- share of gross assets - 998,750
- share of gross liabilities - (198,750)
- associated goodwill - 802,778
----------- ------------
909,872 2,975,717
------------ ---------------
Current assets
Stocks 109,648 93,879
Debtors
- due within one year 2,825,139 1,307,647
- due after more than one year 500,000 -
Cash at bank and in hand 17,079,443 25,769,329
Cash at bank and in hand ----------------- -----------------
20,514,230 27,170,855
Creditors: Amounts falling due within one year (2,083,237) (2,281,980)
--------------- -----------------
Net current assets 18,430,993 24,888,875
-------------- -------------
Total assets less current liabilities 19,340,865 27,864,592
Creditors: Amounts falling due after more than one year (378,805) (415,000)
------------- -------------
Net assets 18,962,060 27,449,592
========= ========
Capital and reserves
Called-up share capital 5,186,286 5,186,286
Share premium account 37,342,877 37,342,877
Profit and loss account (23,567,103) (15,079,571)
--------------- -------------
Equity shareholders' funds 18,962,060 27,449,592
=============== ==============
Consolidated cash flow statement
Notes 2002 2001
£ £
Net cash outflow from operating activities 2 (9,595,338) (7,969,036)
---------------- -----------
Returns on investments and servicing of finance
Interest paid (5,835) -
Interest element of finance lease rental payments (1,286) -
Interest received 1,027,135 855,654
-------------- -----------
Net cash inflow from returns on investments and servicing of finance 1,020,014 855,654
-------------- -----------
Taxation
Research and development taxation credit 255,843 -
-------------- -----------
Net cash inflow from taxation 255,843 -
-------------- -----------
Capital expenditure and financial investment
Purchase of intangible fixed assets - (935,000)
Purchase of tangible fixed assets (705,235) (902,305)
Sale of tangible fixed assets 6,500 -
------------ ------------
Net cash outflow from capital expenditure (698,735) (1,837,305)
------------- ------------
Acquisitions and disposals
Investment in joint venture (490,040) (1,700,000)
Disposal of joint venture 859,000 -
------------ ------------
Net cash inflow (outflow) from acquisitions and disposals 368,960 (1,700,000)
-------------- ------------
Cash outflow before financing (8,649,256) (10,650,687)
-------------- ------------
Financing
Issue of ordinary share capital - 36,395,667
Issue of shares to minorities 200 -
Capital element of finance lease rental payments (30,138) -
-------------- -----------
Net cash (outflow) inflow from financing (29,938) 36,395,667
-------------- -----------
(Decrease) increase in cash in the year 3 (8,679,194) 25,744,980
============== ===========
Reconciliation of movements in group shareholders' funds
2002 2001
£ £
Loss for the financial year (8,487,532) (8,042,705)
--------------- ---------------
New equity share capital subscribed - 651,482
New preference share capital subscribed - 1,479,450
Premium on new share capital subscribed, net of expenses - 34,397,459
Shares issued to employee benefit trust - (132,724)
Dividends on non-equity shares - 89,781
------------- --------------
Net (reduction in) addition to group shareholders' funds (8,487,532) 28,442,743
Opening shareholders' funds (deficit) 27,449,592 (993,151)
-------------- --------------
Closing group shareholders' funds 18,962,060 27,449,592
========= =======
Notes
1. Basis of Preparation
The financial information set out in this preliminary announcement does not
constitute the Group's statutory accounts for the years ended 31 March 2001 or
2002. The financial information for 2001 is derived from the statutory accounts
for 2001, which have been delivered to the Registrar of Companies.
The auditors have reported on the 2001 accounts: their report was unqualified
and did not contain a statement under section 273(2) or (3) of the Companies Act
1985.
The statutory accounts for 2002 will be finalised on the basis of the financial
information presented by the directors in this preliminary announcement and will
be delivered to the Registrar of Companies following the Group's annual general
meeting, which will be held during September.
A copy of the annual report and accounts will be circulated to all shareholders
of the company shortly and copies will also be available for members of the
public upon application to the registered office at Fifth Floor, Station House,
Stamford New Road, Altrincham, WA14 1EP and on the website www.itisholdings.com
2. Reconciliation of operating loss to net cash outflow from operating
activities
2002 2001
£ £
Operating loss (10,463,650) (8,711,356)
Depreciation and amortisation of licenses 346,533 547,482
Impairment losses 896,000 -
(Increase) decrease in stocks (15,769) 17,106
Increase in debtors (674,616) (911,924)
Increase in creditors 316,527 1,055,237
(Profit) loss on disposal of fixed assets (363) 34,419
-------------- --------------
Net cash outflow from operating activities (9,595,338) (7,969,036)
========= =========
3. Reconciliation of net cash flow to movement in net funds
2002 2001
£ £
(Decrease) increase in cash in the year (8,679,194) 25,744,980
Cash inflow from decrease in lease financing 30,138 -
------------- -------------
Change in net funds (8,649,056) 25,744,980
New finance lease (80,368) -
-------------- -------------
(8,729,424) 25,744,980
Net funds brought forward 25,758,637 13,657
---------------- --------------
Net funds carried forward 17,029,213 25,758,637
======== ========
This information is provided by RNS
The company news service from the London Stock Exchange
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