Trafficmaster Plc filled in the details of its flotation through Allied Provincial Securities Ltd. The company is placing 7.5m shares at 130p per share to raise UKP9.8m; this represents 34.3% of the 21.9m shares being listed; it still has 8.1m shares in its locker that can be issued whenever the company needs them. Just over UKP2m of the money raised is for existing shareholders who are divesting 10% of their shares; the existing shareholders are Hambrose, Peek Plc the traffic management company, and the directors. Following the divestment, the institutions are subject to a lock-in clause of one year, while the directors cannot sell up for two years. This dumping of shareholder ballast means that the firm will be left with UKP7.17m net of expenses. It will be using UKP2.5m of this nest egg to finance the expansion of its network of road sensors in the UK from the southeast to major trunk roads and motorways over most of England. It will plough UKP1.5m into the expansion of its market activity that it believes it will need after opening up the motorway network in the north. Another UKP800,000 of the money raised will go into product development; the firm currently manufactures its receiver terminals with the software built into an EPROM device, but by the end of the year it wants to produce a version using a removable card so that upgrades to the software can be distributed through the post rather than the receiver having to be sent back to be re-engineered. The rest of the money will be used as working capital for the firm, which says it has no gearing. For all its bravado, it needs to get this expansion of its market under way quickly if it is to be a success. Its 1993 net loss increased to UKP845,000 from UKP669,000, on turnover that grew 62.6% to UKP823,000. Loss-making firms up for flotation are nothing extraordinary, but Trafficmaster says that it won’t reach profitability within the next year because of the level of investment it is making. Hopefully, it will stem its flow of losses after this and get in the right lane some time, or it could find itself in a jam.
