Trafficmaster Plc, the Milton Keynes, Buckinghamshire-based manufacturer of real-time traffic information systems, saw its share price rise fourpence to 1.62p following the announcement of its year-end figures. The rise in share price indicates surprising confidence in a company that has yet to reach profitability since its inception four years ago; pre-tax and net losses for 1994 were #1.3m, up from #835,000 in 1993. The shares are well in the money because the company floated them on the Stock Exchange in March last year at 130 pence. Trafficmaster remains reticent about making a stab at forecasting when profitablity will be reached, and prefers to explain this in terms of subscriptions to its Trafficmaster YQ product. Now that the infrastructure and product are in place, our cost base remains fixed and additional subscribers can be taken on at no additional cost, says finance director, Bill McIntosh. McIntosh predicts the company will see substantial revenue growth this year as subscription levels rise and revenues from repeat subscriptions begin to show through. Confidence in significant sales from repeat subscriptions is high: McIntosh estimates cancellation rates will be less than 20%. Trafficmaster launched its eponymous YQ in-car unit last month and had set a target of 5,000 units in the first three months – but this target has already been met. Part of this success has been thanks to the retail distribution channel it has now established, says McIntosh. The product is being sold in 2,000 retail outlets in the UK including Dixons, Tandy and John Lewis.
Voice-based system
Trafficmaster has also set up a direct sales channel aimed squarely at the corporate market, which operates out of its headquarters in Milton Keynes. The company is also beginning to put out a few feelers into foreign markets and has struck its first overseas licensing deals in Brazil, selling one licence for Sao Paulo and another for the rest of the country, for which it will receive royalties plus additional revenue as a hardware supplier. It is also currently developing a voice-based real-time information system. This product is aimed at the low end market for drivers who travel only relatively short distances and therefore need only local travel information. Prices for this have yet to be announced, by McIntosh says it will be cheaper than the existing screen system, and it should be ready in August. Trafficmas ter’s product development schedule is fairly ambitious and the company has plans to introduce a new product every six months. According to McIntosh, shorter term profits will come from Travel News Ltd, the soon-to-be-launched road conditions information services joint venture with Independent Television News Ltd, in which Trafficmaster holds a 50% stake.
