Quarterly report for TagMaster AB January-March 2017
Continued high growth for both sales and result
- Net sales increased during the first quarter by 70,8% to 42,1 MSEK (24,6)
- Result before depreciation (EBITDA) increased during the first quarter by 140% to 4,8 MSEK (2,0), corresponding to a margin of 11,4% (8,3)
- Net result after tax was 3,1 MSEK (0,9)
- Result per share was 0,02 (0,01)
- Cash flow from the business for the period was 7,3 MSEK (-0,2)
- On March 22, 2017, the Board resolved to, subject to approval by the annual general meeting, conduct an issue of shares with preferential rights for existing shareholders, whereby the Company’s share capital may increase with no more than SEK 1 678 243,91 and 33 564 878 shares of series B. Shareholders in TagMaster have the preferential right to subscribe for one (1) new share of Series B per five (5) existing shares, ie. subscriptions ration 1:5. The subscription price in the rights issue is SEK 1,10 per share. The right issue is secured to approximately 74 percent by existing shareholders, board and management and warranties.
- TagMaster acquires CA Traffic Ltd in England with admission date April 27, 2017. The acquisition means that TagMaster takes over a business with a yearly turnover of approximately 50 MSEK and a positive result.
Comments by the CEO
Our sales during the first quarter has been satisfactory with good volumes for TagMaster as well as for Balogh while CitySync has had seasonably lower volumes.
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 the first half of 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.
CitySync is in discussions about a number of parking projects with several large international customers and we expect deliveries to start in smaller scale during 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.
Our rail business has been good during the quarter and product deliveries have continued for the big rail project announced at the end of 2015 and for another smaller project. Deliveries will continue, somewhat slower, during 2017. We are approaching the end of a development project for a new Railtag, with a 20-year lifetime, which will be used in these two projects, but also for other 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 development during the quarter with a continued positive margin development. The US market has stared well and the Indian market has been strong in products for toll road solutions. We will continue to increase our market efforts among others by participating in more fairs during 2017 and by new recruitment in sales. We have during the quarter started launching our UHF products in the French market through the sales channels of Balogh and during 2017we 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 and 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 4,8 MSEK (2,0) and our cash flow from the running business of 7,3 (-0,2) 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 April 27, 2017.
TagMaster is an application driven technology company that designs and markets advanced identification systems and solutions based on radio & vision technology (RFID & ANPR) for demanding environments. Business areas include Traffic Solutions and Rail Solutions sold under the brands TagMaster, CitySync and Balogh 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.