Tracsis delivers improved H1 performance, announces Vesputi acquisition

Tracsis H1 FY26 results show better quality growth and stronger margins

Tracsis has put out a solid set of interim numbers for the six months to 31 January 2026. This is not a blockbuster update, but it is clearly better than the same period last year, and importantly it shows the business is making progress in the areas management keeps saying matter most – recurring software revenue, consumer-driven ticketing income and international expansion.

The headline figures are encouraging. Revenue rose 7% to £38.9 million, adjusted EBITDA – a non-IFRS profit measure that strips out items like depreciation, amortisation and exceptional costs – jumped 31% to £5.0 million, and diluted adjusted earnings per share climbed 34% to 10.2p. That tells you this was not just growth for growth’s sake. Profitability improved too.

Key H1 FY26 numbers	H1 FY26	H1 FY25	Change
Revenue	£38.9 million	£36.3 million	+7%
Adjusted EBITDA	£5.0 million	£3.8 million	+31%
Adjusted EBITDA margin	12.8%	10.5%	+236 bps
Diluted adjusted EPS	10.2p	7.7p	+34%
Cash	£25.8 million	£22.1 million	+£3.7 million
Interim dividend	1.3p	1.2p	+8%

Why the Tracsis interim results matter for investors

The big positive here is the mix of revenue. Tracsis is trying to become a more scalable software-led transport technology business, and this half-year report shows some movement in that direction. Recurring software licence revenue increased 4% to £10.4 million, while consumer-driven transactional revenue rose 24% to £2.4 million.

Those are the kinds of revenues investors usually like. They tend to be stickier, more repeatable and potentially higher quality than one-off project work or hardware sales. So even though total revenue growth was only 7%, the composition of that growth looks healthier than the raw top-line number suggests.

There is also a clear margin story. Adjusted EBITDA margin improved from 10.5% to 12.8%, helped by better profitability in Traffic Data and Events. That matters because it shows management is not only chasing growth but also getting more out of the existing base.

Rail Technology & Services delivered steady growth and strong profit improvement

Rail Technology & Services remains the core engine of the group. Revenue in the division rose 7% to £18.1 million, while adjusted EBITDA increased 16% to £3.5 million. Profit before tax jumped to £1.2 million from £0.2 million.

The drivers were sensible enough. UK ticketing performed well, supported by development revenue from the Tap Converter contract, which is being built as the back-office solution for a wider pay-as-you-go rollout on the National Rail network. Consumer-driven transactional revenue also kept growing, helped by more customers using digital ticketing and higher delay repay volumes.

Recurring software licence revenue in this division reached £10.4 million, up 4%, with growth mainly coming from the Operations and Planning portfolio and some benefit from price increases. That is good news, because software licence income is exactly what management wants more of.

One softer point remains Remote Condition Monitoring, or RCM, which is hardware used to monitor rail assets. UK Control Period 7 funding constraints are still weighing on volumes. Tracsis did report a £0.3 million increase in UK RCM hardware revenues, but management was clear that this part of the business is still facing headwinds.

Data, Analytics, Consultancy & Events bounced back nicely

The other division also had a much better half. Revenue rose 7% to £20.8 million and adjusted EBITDA nearly doubled to £1.5 million from £0.8 million. Profit before tax moved into the black at £0.1 million, versus a £0.7 million loss last year.

This improvement looks meaningful because last year’s comparator was weak. Traffic Data and Events profitability has now improved for two consecutive periods, building on the recovery seen in the second half of FY25. Increased activity in Events helped, while Professional Services got a lift from a new GeoIntelligence contract with the UK government.

For me, this is an important part of the update. Investors often worry when one division is carrying the rest. Here, both divisions grew revenue by 7%, and both improved margins. That makes the overall result feel more balanced.

Vesputi acquisition gives Tracsis a foothold in German digital ticketing

The post-period acquisition of Vesputi is one of the more interesting strategic moves in this RNS. Tracsis bought the German digital ticketing technology provider on 31 March 2026 for an initial net cash payment of €4.7 million, around £4.1 million, funded from existing cash.

Vesputi runs Mobilitybox, a platform that connects public transport operators with consumers via third-party apps and websites. The attraction is clear enough. It extends Tracsis’ ticketing capability into a strategically adjacent area and gives it a small foothold in the German public transport market.

There is also an earn-out structure, with up to €2.4 million, around £2.1 million, payable subject to performance criteria through to 31 December 2027. A maximum of €0.5 million, around £0.4 million, will be settled in new Tracsis shares, with the rest in cash. The formal valuation exercise has not yet been completed, so some acquisition detail is not disclosed yet.

My view is that this looks sensible rather than flashy. It is not a transformational deal, but it fits management’s strategy of building software capability and diversifying internationally. That said, investors should remember it is still small, and integration always carries some risk.

Cash generation and balance sheet strength remain a real plus

One of Tracsis’ better traits is financial discipline, and that comes through again here. The group finished the half with £25.8 million of cash and no debt. Free cash flow improved to £2.5 million from £2.3 million, despite higher tax paid and £1.1 million of exceptional cash outflows.

That strong balance sheet matters for two reasons. First, it gives the company resilience while UK rail procurement remains slow. Second, it gives Tracsis firepower for product investment and bolt-on acquisitions like Vesputi.

The dividend also edged higher to 1.3p per share, up from 1.2p. On its own, that is not a huge event, but it does reinforce management’s message that the business remains financially healthy.

What could hold the Tracsis share story back in FY26

It is not all plain sailing. The company was very clear that near-term UK rail market headwinds remain. Network Rail Control Period 7 funding constraints are still affecting RCM hardware volumes, and broader rail reform is leading to longer procurement timelines.

There are also costs attached to the group’s internal transformation. Tracsis expects to incur around £1.0 million of non-repeat cash costs during FY26 as it extends its ‘One Tracsis’ operating model across the group, mainly through headcount reductions where roles are duplicated or no longer needed.

On top of that, reported statutory profitability is still thin. The group made a statutory profit before tax of just £29,000 and posted an operating loss of £77,000. That is better than last year, but it shows how much the adjusted figures rely on excluding amortisation and exceptional items. Investors should not ignore that gap.

Tracsis outlook stays unchanged – steady, not spectacular

The board said full-year adjusted EBITDA should be in line with market expectations. The company’s compiled analyst expectations for the year ending 31 July 2026 point to a mean adjusted EBITDA of £13.4 million, with a range of £13.0 million to £13.9 million.

That tells you management is confident, but not raising the bar. Given the ongoing rail headwinds, that feels fair enough. Better to quietly deliver than get carried away.

The support for the second half should come from recurring revenues from the installed base, digital ticketing activity at a similar level to the first half, the contribution from Vesputi from 1 April 2026, a significant confirmed orderbook and expected run-rate activity consistent with the fourth quarter of FY25.

Bottom line on Tracsis H1 results and the Vesputi deal

This was a good, credible update from Tracsis. Revenue is growing, margins are improving, cash is strong and the strategy is moving in the right direction. Better still, the growth is coming from software, ticketing and recurring income rather than weaker-quality revenue sources.

The negatives are still there. UK rail spending remains patchy, procurement is slow, and statutory profits are only just above break-even. But with £25.8 million of cash, no debt and a clear focus on scalable transport software, Tracsis looks in decent shape.

If you already follow the company, this RNS should be reassuring. It does not scream breakout growth just yet, but it does suggest the business is becoming stronger, more software-led and a bit more internationally diversified. In this market, that is worth paying attention to.