9 December 2019

TRAKM8 HOLDINGS PLC

("Trakm8" or the "Group")

Half Year Results

Trakm8 Holdings plc (AIM: TRAK), the global telematics and data insight provider, announces its unaudited results for the six months ended 30 September 2019:

Financial Highlights

1 Recurring revenues are generated from ongoing service and maintenance fees

2 Before exceptional costs and share based payments

3. Total borrowings less cash excluding IFRS 16 adjustment for leased property and motor vehicles

Operating highlights

·      H1 2019 results improved year-on-year due to:

o  Improved levels of new orders leading to slightly higher revenues

o  Significantly improved gross margins due to lower hardware, labour, communication and installation costs

o  Reduced overheads despite a £270k increase in non-cash amortisation and depreciation (net of IFRS16 impact) as a result of efficiency improvements implemented in FY2019

o  Significantly improved cash generation from operations due to significant reduction in losses and strong working capital actions, despite £1.01m R&D tax credit cash not received in the period due to HMRC delays

·      Continuation of new contract wins:

o  New contract awards with major clients By Miles, Altrad, and a number of other Fleet and Vehicle Leasing clients, all deployments commenced in H1 and continue into H2.

o  Installed base continues to grow in Fleet from existing and new customers offset by Insurance reductions:

§ Approximately 240,000 connections (Sept 2018: 250,000 connections), a decrease of 3,000 connections (1%) in the six month period since last year end.

·      Stronger H2 and FY2021 outlook:

o  Major automotive customer committed to a minimum of 45,000 units over next 12 months

o  Ingenie deployment commenced in November

o  Lexis Nexis expected to start deployment in January

o  Strong level of orders, post period, from existing and new Fleet customers

o  Additional significant efficiency savings implemented

Outlook

The Board is confident that the second half of the year will be sufficiently improved over the first half to end the year meeting full year market expectations of increased revenues and modest adjusted profit before tax.

- Ends -

For further information:

About Trakm8

Trakm8 is a UK based technology leader in fleet management, insurance telematics, connected car, and optimisation. Through IP owned technology, the Group analyses data collected by its installed base of telematics units to fine tune the algorithms that are used to produce its solutions; these monitor driver behaviour, identify crash events and monitor vehicle health to provide actionable insights to continuously improve the security and operational efficiency of both company fleets and private drivers.

The Group's product portfolio includes the latest data and reporting portal (Trakm8 Insight), integrated telematics/cameras, self-installed telematics units and one of the widest ranges of installed telematics devices. Trakm8 has over 240,000 connections.

Headquartered in Coleshill near Birmingham alongside its manufacturing facility, the Group supplies to the Fleet, Optimisation, Insurance and Automotive sectors to many well-known customers in the UK and internationally including the AA, Saint Gobain, EON, Iceland Foods, Direct Line Group and Young Marmalade.

Trakm8 has been listed on the AIM market of the London Stock Exchange since 2005.

www.trakm8.com / @Trakm8

Executive Chairman's Statement

Results

I am pleased to report Trakm8's results for the six months ended 30 September 2019.

Revenues increased by 0.3% in the period to £8.87m (H1 2018: £8.84m). There was a reduction of £0.05m in Insurance and Automotive revenues and an increase in Fleet and Optimisation revenues of £0.08m. Only one of the 4 new insurance customers deployed during the period and the recurring revenue decline from our major insurance customer was not quite offset by the growth in new device sales. Our major automotive customer did not require any further devices from us during the period, however they have made a commitment of 45,000 units over the next twelve months.  The Board is encouraged that the decline in revenue has been arrested and the first two months of H2 are significantly ahead of last year.

Total recurring revenues decreased by 5% during the period to £4.89m (H1 2018: £5.17m), as a result of the decline in the revenue per unit in the insurance market and decline in install base of our largest insurance customer. Recurring revenues represent 55% of Group revenues (2018: 58%). There is an ongoing trend of lower service fees per unit for the same functionality.  At the period end we had approximately 240,000 units (Sept 2018: 250,000 units) reporting to our servers, being a decrease of 4% over the last twelve months. This is a decrease of 3,000 units (1%) since 31 March 2019.

Despite the market continuing to be adversely effected by the current uncertainty over Brexit and the economy in general Fleet units installed have increased by 1,000 units to 77,000 (1%) since March 2019.  This is due to improved level of performance from our Channel and Direct Fleet sales teams resulting in an increase in new orders especially in the mid-market.

Our largest insurance customer has continued to experience a decline in young driver policies and as a result the level of new policies written has been less than those not renewed or cancelled. By Miles, one of our newly secured customers has deployed a number of units but not sufficient to cover the decline elsewhere. In addition our major automotive customer has waited to start its marketing campaign into the current period. One major new insurance customer has now deployed in the current period and the other is expected to do so in January. Our volume automotive customer has committed to a minimum of 45,000 units over the current period and the first six months of FY2021. As a result, Insurance & Automotive connections reduced by 4,000 since March 2019, to 163,000 (-2%).

Gross profit margin has increased to 53% (2018: 43%), with cost of sales reducing by £0.82m to £4.17m (H1 2018 £5.00m), despite marginal increase in revenue. This is due to the vigorous actions taken over the past 12 months to introduce hardware with lower costs, reduce the direct labour costs and to reduce the cost of communications and installations. This trend is expected to continue as further efficiency actions are taken.

Total overhead costs, excluding exceptional costs reduced by £0.17m to £6.44m (H1 2018: £6.61m).  Excluding a £0.27m increase (net of IFRS16 impact) in depreciation and amortisation to £1.32m (H1 2018: £1.05m), overheads reduced by £0.44m year on year.  This is the result of the cost actions taken over the last 12 months.  In addition to this £0.44m reduction in overheads the level of R&D expenditure capitalised has reduced by £0.21m. Exceptional costs in the period include £0.23m associated with a headcount reduction activity undertaken at period end. This is part of preparing the Company for improved profitability going forward.

Financial position

Net cash inflow from operating activities was £1.43m (H1 2018: outflow of £0.42m), this is despite the R&D tax credit receipts of £1.01m failing to be received before period end due to HMRC delays (H1 2018: £0.97m received in August 2018). This good result, despite the losses incurred, is as a consequence of strong working capital management including a £0.62m reduction in inventory.

Our net debt as at September 2019 excluding the impact of the IFRS16 lease recognition was £6.10m (H1 2018: £5.73m) (31.3.2019: £5.63m) including £0.69m of cash (H1 2018: £2.00m). In addition, the Group at 30 September 2019 held an undrawn credit facility of £0.15m at HSBC. With the changes in the Net Debt as result of IFRS 16, Net Debt is £8.42m.

Strategy

The Group has been following the strategy outlined in the 2019 Annual Report. Our focus is to provide ever more meaningful insights to our customers using the data generated by our installed devices and other connections so that they can run their operations more efficiently and safely.

Our primary strategy going forward is to return to growth of our business through more connections, increased device sales and higher service fees. The long awaited deployment, in volume, with our insurance and automotive customers has now commenced. The Fleet teams are delivering new contract wins significantly ahead of the previous year and the pipeline for new opportunities is strong.

Trakm8 has focused on delivering market leading technology and ensuring that the solutions are generating the best possible ROI's for our customers. We have reduced the levels of expenditure in R&D but believe we have appropriate levels of resource to continue to invest heavily to meet the demands of the market and customers. We will continue to own the majority of IP in our value chain.

Our third strategy has been to improve the efficiencies of our business in every possible way. We have been extremely successful in delivering the £2m reduction on all costs year-on-year promised last year.  We have continued to focus on this and have implemented a further £1.5m of annualised cost reductions at the end of the period. We will continue to seek efficiencies as we go forward. The next phase of these efficiencies will be as a result of investment in new lower cost hardware devices and, provided volumes increase as expected, in improved manufacturing and test equipment.

JOHN WATKINS

Executive Chairman