Shares of Leeds-based transport data analytics firm Tracsis plc fell as much as 12% after it said the unexpected timing of the UK general election has resulted in a one-off impact on the group’s business in the final two months of the current financial year.
Unrelated, Tracsis also said some North American revenues would be delayed.
In a trading update for the year ending July 31, 2024, Tracsis said it had been planning for an October/November 2024 UK election date.
“The unexpected recent announcement that a UK general election will take place on 4 July 2024 has initiated a period of pre-election activity restrictions, resulting in a one-off impact on the group’s trading in the final two months of the current financial year,” said the firm.
“The pre-election restrictions are temporarily impacting central government, local authority and Train Operating Company decision making and spending across the UK transportation sector.
“This action is resulting in the rescheduling of certain projects and a short-term contraction of new order activity, that was previously expected to occur in the group’s Q4 financial period.
“This impact relates to the Group’s UK Rail Technology, Transport Consultancy and Traffic Data businesses, whilst the Events business remains unimpacted.”
On North America, Tracsis added: “In the group’s April 2024 interim results statement, we highlighted risks in converting our North American pipeline before year end.
“While these opportunities continue to be pursued, the board now expects that associated revenue will not be realised within this financial year.
“Coupled with the one-off financial impact of the UK general election and strong operational gearing within the business, this will have a material effect on the group’s FY24 adjusted EBITDA margin.
“Given the short-term nature of the financial impact, ongoing project commitments, and the significant market opportunity available to the group, the board does not consider it appropriate to implement near term cost mitigation measures.”
Tracsis said FY24 revenue is now expected to be in the range of £80 million to £82 million. Analysts’ consensus range for FY24 revenue had been £84 million to £85.9 million, with an average of £85.2 million.
Tracsis CEO Chris Barnes said: “Our positive direction of travel and significant market opportunity remains unchanged for Tracsis.
“While the impact of the pre-election restrictions coinciding with our busy final quarter of the financial year is unquestionably disappointing, this is an isolated event outside of our control.
“Overall, the momentum in the group remains strong and our market opportunity continues to grow, especially in North America. I’d like to thank our team for their continued efforts, during what has been a year of positive operational progress, despite this performance.
“We look forward to returning to business-as-usual across our affected UK businesses, as we emerge from the UK election period, regardless of the political outcome.”