Journeo plc

Investor presentation throughout recorded presentation investors will be in listening mode. Questions are encouraged and they can be submitted at any time by the Q&A tab situated in the right corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company can review the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you up to CEO Russ Singleton. Good afternoon to you, sir.

Good afternoon and thank you, Alessandro. Good afternoon to everybody. It's made time to join us on this presentation and hear about our H1 results. By means of an introduction, I'm Russ. I'm the chief exec and I'm joined by Nick Lowe, who's our chief financial officer. We've both been with the company a fair while and obviously we're delighted now to talk to you about our results. So Genio is about intelligent systems for transport networks and infrastructure, if there's any new investors or potential investors listening. And what we're about is providing sort of fully integrated solutions, sort of end-to-end in those networks. We've delivered good results for H1, very strong results, got a growing opportunity pipeline, We also have an acquisition pipeline which we've been working through over the last few years. And as some of you will have seen, we recently completed an acquisition at the beginning of this month of Crime and Fire. And we've been building the senior leadership team and our backend software systems to create an organization that's capable now of working at a much higher rate, much larger footprint in the market. And we've been investing considerably in our research and development and what that's doing for us. As we put in there, it's helping us to increase our profits, delivering an 11% operating margin and a strongly growing pipeline. Again, for anybody that's not familiar with us, We have four operating companies at the moment. Our fleet systems business, which is really about fully integrated services end to end in public transport and some selected areas of freight market. We have our passenger systems, which is really about information delivery to members of the public from transportation applications. Infotech is the market leading rail passenger displays business in the UK. And we have Genio AS in Denmark, which was formed from the acquisition of MultiQ systems in September 23. We have a growing and wonderful list of end users and customers that we work with. And that's growing both geographically and segmentally. And at the moment, we have 31,000 assets connected to our cloud platforms on a concurrent basis, generating a recurring revenue. We've got about 30% or over 30% of the UK bus network onto our cloud platform. Two million journeys a day reliant on the infotech information systems. And I won't go through all of this, but there's just over 200 in the company prior to the acquisition. I'll hand over to Nick to run through a summary of the interims.

OK, so I guess it was a very, very pleasing set of results. At the headline level, revenue decreased by 4%. As we go into the segments, we'll see why that was. But we had a 3.4 million pounds of revenue from a contract with the US MTA in H1 last year, which we didn't have in H1 this year. So if we remove the effect of that, for us a lot on a life-like basis, revenue actually up by about 10%. Gross margins were good, very good. We were up 3% across the group. As we'll see later on, we were up in every segment in the group. So overall gross profit actually increased by 3% to 9.2 million, despite the drop in revenue. We had a small uplift in overhead, just inflationary. So overall adjusted PVT state level at 2.8 million. EPS was down at 12.51p. The reason for that is the effective tax rate. We had a very, very low effective tax rate last year. We still have a low rate this year because of the benefit of R&D tax credits, but that's the reason for the movement in EPS. Cash was phenomenally strong at the end of the half. We had £18 million. Obviously, we've spent some of that since the half on the acquisition, but we still sit with just over £9 million of cash today. We spent about a million pounds in R&D in the half. We capitalised some, we expensed some, but capitalisation is matched by amortisation. So basically one million did pass through the P&L. So the PBT is after writing off a million of R&D in the half. Onto segments. So Fleet Systems had a stunning performance, up 46% for revenue. It's gone up by about two and a half times revenue as in the last three years. um gross profit was good uh 65 amount was driven by three percent uplift in margin as well so a really really strong performance from fleet um but the contribution level it delivered 1.6 million which is three times up on what it did in the same period last year uh passenger system again very good performance of 17 on revenue 6.1 million margins were two percent up um so overall gp was up by 21 percent um and that group delivered a profit or bottom line about 600 000 for the group which is about 50 up on last year infotech so this is where we had a drop in revenue so as i said earlier on we had a 3.4 million pounds of revenue from the us contract in uh h1 last year Nothing in H1 this year. But moving forward, we won $5.2 million of POs with the same customer in H1, which we will get probably up 40% of the revenue in H2 this year. So we expect, well not expect, we will have a stronger H2 in H1 for Infotech. Within that, gross margins were up to 45%, which meant that GDP didn't decrease by as much. And overall, we still had a good contribution out of Infotech at about £400,000. Journey OAS, so our Danish business, again, at the headline level, revenue was down at 1.5 million. Similar to Infotech, we'll have a stronger H2 from Journey OAS. The benefit we have with Journey OAS is the recurring revenue. Junior S makes a profit just from its recurring revenue. So because we're predominantly recurring revenue in H1, we had a gross margin of 61%. So the 1.2 million drop in revenue actually only resulted in the drop of the bottom line by £100,000. So overall, although it dropped, it was less and we'll have a stronger H2. So fleet and bus did very well. And Infotech and Junior S will deliver a stronger H2 than H1. Recurring revenue, it was 16% of the group in H1, 13% of it last year, so we're up about 15% for recurring revenue. Roughly 40% of it is SaaS, and the balance of 60% is more traditional maintenance. But SaaS is the element, as we said before, that is growing, probably from about 10%, 15% two or three years ago, up to 40% of total recurring revenue now. Contract wins. So we have an announcement threshold of a million pounds for contract wins. So anything below a million pounds, we don't announce. What we have here is, again, success across the business. So we have multiple contract wins say in a different segment so the first two Stoke and Cardiff are in passenger systems and they're principally hardware contracts but with a recurring tail of revenue for three to five years the third and the last are the 5.2 million dollars of orders from the US for infotech which is why we will have a stronger H2 from infotech So $5.2 million across the two. The fourth one is a three-year frame with the first bus. So that's the estimated value of about £10 million. There's a two-year option on it. So ultimately, we would expect £15 million plus from that contract over the five years. And the £4.2 million is from Alstom. So that's within fleet systems for rail. The £4.2 million is a hardware delivery. What we will also have after the delivery of that is a recurring income of £400,000, which isn't part of the £4.2 million. So there's additional future recurring revenue to come from it. The last is operational highlights. This is some of the, I guess, Russ has touched on mostly already, but we had our first carbon reduction plan for the group in H1. We are now integrating all the business systems from the acquired business, our own business. So we have a new CRM system across the business. We have a new software development platform. As Ross said, the senior leadership team was strengthened at the end of last year and into this year.