University spin-out firm Tracsis on track for 15pc revenues rise

The Leeds-based group said it expects revenues in excess of £10m when it announces its results for the year ending July 31, compared to £8.7m the year before.

It added underlying profits for the year ending July 31 would be in line with previous market expectations. Pre-tax profit was £3m in 2012. The group’s cash position is around £6m.

“Tracsis continues to aggressively manage costs and has maintained a prudent approach to how it undertakes investment decisions,” the company said in a trading statement.

“The business remains debt free, actively manages cash reserves and remains committed to a strategy of delivering shareholder value through a combination of acquisitive and organic growth.”

Tracsis is a Leeds University spin-out, which produces software that can prevent train derailments and delays.

Its ‘resource optimisation’ technology is used by train companies including Virgin Trains, First Group, Go-Ahead, Serco, Arriva, Scot Rail and National Express.

One of its biggest customers is Network Rail, responsible for the UK’s train tracks and infrastructure.

The company’s products allow transport operators to computerise staff and rolling stock scheduling through ‘smart planning’, effectively using their resources much more efficiently.

The group said the acquisition of Tadcaster-based Sky High, which took place in April, would make a “good contribution” to the group’s overall performance next month.

It said that the elimination of surplus PLC related overheads combined with other measures had enabled it to save costs and improve performance.

Sky High is the UK’s biggest provider of traffic analysis and is expected to help the group to secure more work overseas.

Tracsis believes there will be significant cross-selling opportunities of both services and technology and the deal will expand its presence in Australia as Sky High has a number of operations there.

In April, Mr McArthur said that Sky High had significant stature in the market, a “formidable reputation”, and “robust systems to meet the data and analysis needs of its enviable client list”.

Yesterday, the group said it is currently involved in negotiations with a major customer to continue the next phase of a significant framework agreement for its condition monitoring technology.

It welcomed the recent changes to the UK rail re-franchising rules and said it had entered into a long term agreement with one of the major operating groups for retention of its consultancy and software services.

“Looking ahead, the next few years should be a period of stability in the consultancy and software offering and allow the group to invest in a broader range of products and services,” it said.

Chief executive John McArthur added: “The progress made since the acquisition of Sky High has been very pleasing and we are excited by the opportunities presented to us in the new markets using technology and services familiar to us.

“We look forward to updating the market in due course on further developments, and in concurrence with the positive industry indicators, we will work to drive further shareholder value through organic growth and acquisition.”

In the past the company has focused on passenger trains, but it has now successfully devised software suitable for the freight market, which will help to progress its plans for overseas expansion.

Mr McArthur, 38, was just 32 when Tracsis floated, making him one of the youngest CEOs on the London Stock Exchange.

Tracsis was this week named as one of Leeds’s top five high growth companies by Alert Research. The city was ranked fifth in a new City League of the UK companies showing the highest turnover growth.

[email protected]