Annual Report & accounts 2024

Our purpose

Tracsis' purpose is to "make transport work". Our approach focuses on combining leading edge software and hardware knowledge, data capture, analytics and industry expertise to generate insights and fast-to-market products and services.

1. Read more on pages 24-25

What we do

We develop innovative technology-driven solutions that solve complex problems in order to maximise efficiency, reduce cost and risk, enhance operational and asset performance, improve safety management and decision- making capabilities, and deliver a better customer experience for clients and customers.

1. Read more on pages 14-15

Our customers

Tracsis has a blue-chip customer base which includes all major UK transport owning groups, Network Rail, passenger and freight train operating companies, Transport for London, multiple local authorities, major outdoor music and sporting event organisers, and a wide variety of large engineering and infrastructure companies. In North America our clients include Class 1 rail freight companies, transit operators, shortline railroads and several large rail-served ports and industrials.

1. Read more on pages 22-23

Contents

Strategic Report

1. At a glance

1. Highlights
2. Our strategy in action: Rail Technology UK
3. Our key performance indicators

1. Chair's statement

1. Investment case

1. Our business model

1. Chief Executive Officer's review

1. Market review

1. Our strategy

1. Our strategy in action: Saving costs on the NICTD South Shore Line upgrade
2. Our strategy in action: Traffic Data and Events
3. Chief Financial Officer's review

30 Divisional overview

1. Stakeholder engagement

1. Sustainability

1. Audit & Risk Committee

1. Risk management

1. Principal risks

Governance

1. Governance at a glance

1. Board of Directors

1. Corporate governance

1. Directors' Remuneration Report

1. Nomination Committee
2. Directors' report

1. Statement of Directors' responsibilities

Financial Statements

1. Independent auditor's report to the members of Tracsis plc

1. Consolidated statement of comprehensive income
2. Consolidated balance sheet
3. Consolidated statement of changes in equity
4. Consolidated cash flow statement
5. Notes to the consolidated financial statements

1. Company balance sheet (prepared under FRS 101)
2. Company statement of changes in equity
3. Notes to the Company balance sheet

1. Group information

A largely services-led business that focuses on data capture and analytics, geographic information systems, earth observation, consultancy and event traffic management within a range of transport and pedestrian-rich environments. The business provides technology, bespoke products and services and data insights that underpin large-scale intelligent transport systems, smart city planning, transport management and positive environmental decision making.

A software, technology and product-led business. It develops and supplies software that solves complex resource, asset optimisation and control problems for train operators, as well as smart ticketing, delay repay and other retail software to improve the customer experience for rail users. It also develops Remote Condition Monitoring hardware, data acquisition software and safety and risk management software for rail infrastructure providers.

38%

Traffic Data & Events

16%

Professional Services

23%

Data, Analytics,

Consultancy & Events

77%

Rail Technology

& Services

39%

Rail Technology

UK

7%

Rail Technology North America

Revenue by geography (%)

Where we operate

US

Fairport

Fairport

Fairport

Our strategy

UK

Livingston

Boroughbridge

Leeds

Manchester (Head Oce)

Dublin

Derby

Coventry

Silverstone

London

Our strategy in action

FY24 Rail Technology UK highlights:

• Deployment of our smart ticketing technology across Transport for Wales and Merseyrail, offering a frictionless experience for our customers
• The appointment of key personnel to support our growth in the future, including a Chief Technology Officer who will oversee all aspects of product development and architecture and targeted investment in enhancing our commercial and project delivery capabilities
• 10% growth in annual recurring and repeat revenue in Rail Technology UK

1. Read more at www.tracsis.com

Rail Technology UK

The Group has undertaken a programme

of transformation this year to create a strong foundation for future growth. As part of the series of actions taken, we have integrated our Rail Technology UK businesses, enhancing their IT and software operating model, upgrading operating systems and processes and streamlined its operating footprint.

Our transformational activity has created a platform for Tracsis to be more agile and customer- focused, while still delivering exceptional products and services to our customers."

Simon Critchley

Managing Director, Rail Technology UK

Value of goods sold and services provided to customers, net of sales taxes.

Comment: Decrease from prior year reflects impact of UK pre-general election activity restrictions in the final two months of the year, the anticipated non-repeat of perpetual licence revenue in the prior year, and lower levels of contact delivery revenue in North America due to the timing of milestone delivery in the order book and slower than expected conversion of our Yard Automation opportunity pipeline.

Earnings before net finance income/expense, tax, depreciation, amortisation, exceptional items, other operating income, share-based payment charges and share of result of equity accounted investees. See note 28 for reconciliation.

Comment: Decrease from prior year includes the lower level of revenue, the impact of UK pre-general election activity restrictions in the final two months of the year, lower contribution from certain non-strategic activities that are no longer being pursued and investment in building a scalable platform for future growth.

Profit before tax (£m)

£1.0m

Definition

Earnings before taxation.

Comment: Principally reflects the lower level of adjusted EBITDA alongside £3.0m of exceptional costs associated with delivering the Group transformation.

Cash (£m)

£19.8m

Definition

Value of cash and cash equivalents and cash held in escrow.

Comment: Net cash flow from operating activities

remained healthy at £8.5m (2023: £9.6m) despite the lower level of EBITDA and £2.3m of cash outflows associated with delivering the Group transformation.

Adjusted EBITDA margin (%)

15.7%

Definition

Adjusted EBITDA divided by revenue.

Comment: Decrease from prior year includes the lower level of revenue, the impact of UK pre-general election activity restrictions in the final two months of the year, lower returns from certain non-strategic activities that are no longer being pursued, and investment in building a scalable platform for future growth.

Annual Recurring Revenue (Rail Technology & Services) (£m)1

£25.5m

Definition

Revenue in the financial year from recurring software licences relating to products that have gone live, and annually repeating hardware revenue from framework agreements.

Comment: Growth principally in Rail Technology UK from new multi-year contract wins and the delivery of the order book.

1 This metric was not reported prior to FY21.

Basic earnings per share (p)

1.6p

Definition

Profit attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue.

Comment: Principally reflects decrease in profit before tax.

Adjusted basic earnings per share (p)

25.5p

Definition

Profit after tax before amortisation, share-based payment charges, exceptional items and other operating income divided by the weighted average number of ordinary shares in issue during the period.

Comment: Principally reflects decrease in adjusted EBITDA.

Jill Easterbrook

Chair

We have made strong operational progress this year, in order to create a platform for significant future growth. While the Board acknowledges this has been a difficult year financially, we remain optimistic about the growth opportunities for the Group, with a range of products and services in attractive end markets."

Dear stakeholder

Whilst our financial performance was impacted by the unexpected timing of the UK general election alongside a slower than expected conversion of opportunities in our North American pipeline, I am pleased to report that operationally the Group has made strong progress, executing a programme of transformational change to create a strong foundation for future growth. I would particularly like to thank our teams for the hard work and commitment they have shown in delivering this.

Drawing out some key performance highlights, our Rail Technology UK business enjoyed double-digit organic growth this year, offsetting slower than anticipated conversion of pipeline opportunities in North America. In addition, notwithstanding the short-term disruption caused by the unexpected timing of the UK general election, our Traffic Data & Events business reported record revenue with a number of strategically important contract wins.

The achievements of the Group in transforming the business to its new operating model should not be understated. Tracsis is now more agile and responsive, focusing its products and services portfolio on fast-growing, higher margin activities, which means we look to the future with confidence.

Strategic progress

During the year, the Board reviewed its strategy and developed an ambitious plan for growth to 2030. This will inform our product proposition and target markets, as well as M&A and sustainability activities.

The Group has delivered a programme of actions during the year to transform its operating model. These one-off actions were delivered to plan and included optimising the Group's organisational structure, integrating the Rail Technology UK businesses, enhancing its IT and software operating model, upgrading operating systems and processes, and streamlining its operational footprint. This transformation has created a scalable platform for future growth, with enhanced capability and experience across our senior leadership teams.

Our strategic plan aims to drive future growth through annual recurring software licence revenue and improving profitability. Aligned with this ambition, we have taken actions in the final two months of the year to re-focus our product and services portfolio on higher margin growth activities. As a result, the Group will no longer pursue certain non-strategic, lower margin activities within its Transport Consultancy business in the UK and within its Rail Technology North America portfolio.