Interim report January to June 2017
High and profitable growth
- Net sales increased during the second quarter by 145,0% to 50,5 MSEK (20,6)
- Result before depreciation (EBITDA) increased during the second quarter by 206,1% to 5,2 MSEK (-4,9), corresponding to a margin of 10,3% (-23,8)
- Net result after tax was 4,1 MSEK (-5,2)
- Result per share was 0,02 (-0,03)
- Cash flow from the business for the period was 4,3 MSEK (-2,0)
- TagMaster acquired CA Traffic Ltd from Hill & Smith Holdings PLC with access on April 27 2017. At a purchase price of 34 MSEK TagMaster is taking over a business with 50 MSEK in sales on a yearly basis and with a positive result from the business.
- The issue of shares with preferential rights for existing shareholders, which was approved by the annual general meeting on April 27 was concluded successfully. The share issue was subscribed to approximately 199%.
First half year
- Net sales increased during the period by 104,6% to 92,6 MSEK (45,2)
- The result (EBITDA) was 10,0 MSEK (-2,9), corresponding to a margin of 10,8% (-6,4)
- Result after tax was 7,1 MSEK (-4,3)
- Result per share was 0,04 (-0,03)
- Cash flow from the business was 11,6 MSEK (-2,2)
Comments by the CEO
Our sales during the second quarter has been satisfactory with good volumes for TagMaster as well as for Balogh while CitySync still underperforms against budget. CA Traffic has been close to budget during the two months it has been consolidated and has generated a positive result.
During the quarter the turnaround work with Balogh has continued. The work is intended to lower both personnel costs and other costs, to reduce the number of products and to simplify the business processes. We estimate the work to be done during 2017, which is a bit later than previously communicated and the delay mainly depends on the work on reducing the product assortment and to start a more efficient product supply requires more efforts. The delay also depends on that the order intake has been higher than expected, which means that we adopt the changes to a higher volume.
CitySync is in discussions about a number of parking projects with several large international customers and deliveries have started during the end of the second quarter. We see a strong trend among other in Scandinavia that ANPR becomes a key component in future parking systems where barriers and ticket machines disappear.
CA Traffic will during the third quarter start a change work to make the business more scalable and more profitable also for lower sales volumes. We will outsource production and assembly and we will move the ANPR development to the same facilities as CitySync. We will also simplify the product assortment and invest more in the newer and more profitable products.
Our rail business has been good during the quarter, but we see a somewhat lower level for the quarters to come. We are approaching the end of the development of a new RailTag, with 20 year lifetime, which should be used in ongoing projects but also for future projects. We already see indications that our acquisition of Balogh will increase our total offering to the rail market and that our complementary product assortment is well received by our common customers. Balogh has during the quarter had an even flow of new projects for delivery during 2017 and 2018 and we expect volumes to stay during the remainder of 2017 mostly driven by our new, simplified and upgraded product assortment.
Our Traffic business has had an acceptable volume development during the quarter with a continued positive margin development. The US market has continued to do well and the Indian market has been strong in products for toll road solutions. We have during the quarter continued the launch of our UHF products in the French market through the sales channels of Balogh and during 2017 we will let our local sales forces sell our complete assortment, which means RFID and ANPR products. We see that we with three home markets (The Nordics, UK & France) are able to integrate and streamline our sales work and we have therefore during the quarter created an EMEA sales organization with responsibility for the whole region. We will also continue the work with developing more products in RFID and ANPR and several of these will be launched already during 2017.
Our quarterly result of 5,2 MSEK (-4,9) and our cash flow from the running business of 4,3 (-2,0) is an acceptable result to be satisfied with, while we still have work to do and it is always worth mentioning that the variation could be significant since especially our rail business is volatile to its character.
This as well as previous financial reports could be found at the company homepage www.tagmaster.com
For further information, please contact
Jonas Svensson, CEO, +46 8-6321950, email@example.com
This information is information that TagMaster AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 8.30 a.m. CET on July 14, 2017.
TagMaster is an application driven technology company that designs and markets advanced identification systems and solutions based on radio, radar & vision technology (RFID & ANPR) for demanding environments. Business areas include Traffic Solutions and Rail Solutions sold under the brands TagMaster, CitySync, Balogh & CA Traffic with innovative mobility solutions in order to increase efficiency, security, convenience and to decrease environmental impact within Smart Cities. TagMaster has dedicated agencies in the US and in China and exports mainly to Europe, The Middle East, Asia and North America via a global network of partners, systems integrators and distributors. TagMaster was founded in 1994 and has its headquarters in Stockholm. TagMaster is a public company and its shares are traded on First North stock exchange in Stockholm, Sweden. TagMasters certified advisor is Remium AB.