Journeo LON:JNEO, the Aim-listed, East Midlands-based provider of technology solutions to the transport sector and local authorities, published a trading update this morning (12th February).
Despite the well-publicised travails of the rail industry, battling not only a sustained campaign of industrial action across the network, but uncertainty caused by the British government cancelling the widely debated HS2 Phase 2, Journeo has had a strong trading period.
Its other target market, local authorities, have also not fared well either, with central government cuts to grant funding, many councils have been left in a precarious financial position, with five local authorities in England issuing a Section 114 Notice (effectively declaring bankruptcy) since 2021.
- YouGov faces activist pressure to improve performance
- Minerals & Financial Investments: flexibility to take advantage of global trends
- Hercules Site Services share price surges 82% in a year
Nevertheless, Journeo reported that trading had been in-line with expectations, with revenues rising 118% year-on-year to GBP46m to end-December 2023. The company offers a number of services, including information technology infrastructure design, installation and maintenance, as well as helpdesk support services.
- Stock recommendations by Bridgewise. Try a free trial of Data+ for a deeper look.
Its fastest-growing segments were Fleet Systems and Passenger Systems, which together saw a 20% uptick in organic growth, delivering revenues of GBP25m, up from GBP21m the year previously which was supported by an order intake growth of GBP30m, up 11% y-o-y.
The company has grown its own services and products, investing over GBP5m into research and development since 2020, but has also supplemented its range of products and services through acquisition, expanding into the Nordic markets through the acquisition of MultiQ for EUR2.5m in September 2023, a leading full-service provider of Intelligent Transport Systems with customers in Denmark, Sweden and Iceland. Journeo had already secured a Scandinavian bridgehead, with operations in Sweden.
Russ Singleton, Journeo’s CEO said in a statement this morning: “I am very pleased with the progress we made in 2023, both organically and through two acquisitions. These developments are fuelling our strategy to broaden our customer base, extend our geographic reach, deepen our capabilities and provide us with access to thematically linked adjacent markets.”
Another year of growing profits for Journeo
MultiQ, and its earlier acquisition (in February 2023) of Infotec, a British supplier of rail passenger information systems, helped deliver GBP21m of revenues in the year, and as such the IT services company expects profit before tax to be in line with market expectations for the year. In November 2023, Journeo said that it expected PBT for FY23 to be around GBP3.9m, which was ahead of expectations at the beginning of 2023.
The IT services company had cash-on-hand of GBP8.1m at the end of the year. This figure included advance payments of GBP1.6m and has an agreed invoice discounting facility of GBP2.75m, which the company said was still unused at the end of the year.
In its final results for 2022, Journeo saw its revenue increase y-o-y by 35% which was accompanied by a 29% uptick in gross profit to GBP7.8m and had GBP500,000 in the bank. The Ashby-de-la-Zouch-headquartered company kicked off 2023 with the closure of a retail offer grossing GBP7.35m.
The company opened the week’s trading at 256p, jumping to 274p on publication of the trading update before settling back to 265p mid-morning. Over one-year the company’s shares have returned 83.5%, ranging between 125.1p and 298.44p over a 52-week period.
Bridgewise, the AI-powered analyst rates Journeo as ‘Buy’, saying: “Journeo’s latest financial results position the company in the top 10% of Consumer Discretionary companies, highlighted by its strong performance in Net Change in Cash and Return on Equity Ratio (ROE) relative to its peers. Strong performance in these two metrics has historically had a positive correlation with Consumer Discretionary stocks outperforming industry competitors. Considering Journeo plc’s latest financial performance, the firm’s shares seem to be a compelling option for investment in the Automobile Components industry.”
