Thank you for making time to listen to our presentation. By means of introduction, I'm Russ. I'm an engineer, and I'm the CEO. My colleague on the right is Nick, who's our Chief Financial Officer. We've got today a short slide deck, really, just to run through our FY2024 results, which we're pretty pleased with, actually. For everybody new to us, Journeo's really an information systems and technical services business, working predominantly in the transport sector. We've been growing strongly over the last five years, and the results that we've announced build on that. Strong growth in revenue, profit, and cash. We've got a growing sales pipeline, which has gone up from GBP 50 million in 2023 to GBP 60 million in 2024. We're now running ahead of GBP 75 million of opportunities in the pipeline with qualified opportunities and prospects.
We've been really busy last year whilst we've been executing our business plans and our strategy. We've also been beefing up the, what we call the bench or the seniority around Nick and I so that we can absorb further growth and that we ourselves don't become a bottleneck on that. We've made some high-level appointments, which we can cover later on. We've also been investing in some of the systems behind that, through CRM packages and HR software packages. The final point, really, there is that we've been developing an active M&A program, with a number of businesses that we've been getting to know over the last three or four years or even longer than that, such that we are able to bring businesses into Journeo Group that we understand, with people that we know and we can trust.
We'll give you a bit more information on that later on. The headlines are there, so we'll come onto the financials a little bit later. What Journeo is doing is we are bringing in sort of off-the-shelf IT products and software, and really tailoring them for fleet operators, businesses to help them drive cost and improve efficiency. It's all about really making public transport and freight transport safer, more sustainable, of course, and more attractive where there's passengers involved, as part of a program really to get people out of personal use cars into public transport, which aids congestion, and it's all part of the decarbonisation agenda. Journeo really focuses everything that it does into two core kind of application areas.
One of them is on vehicle systems where our IT solutions are onboard the bus, the train, the tram, the coach. Also, the infrastructure around the rail platforms, bus stations, and parts of the inner cities. We do that currently through four operating companies. The image on the left is a picture of a train, actually, and that's obviously our fleet systems business, where what we're doing there is providing integrated services. It is a bundle of hardware, know-how, external products and software, binding them all together and then providing over-air, generally through cloud-based applications, access to the onboard systems, whether they are passenger counting, access maybe to the vehicle's telemetry information or security.
Our passenger systems really is about public sector information delivery, and that business works with civil contractors, architects, and specifiers, and it has a focus on real-time information delivery out to members of the public. It's got some quite long-duration relationships with sort of local authorities and sort of government agencies. Infotec is a market-leading manufacturer of rail information systems in the U.K. It's on about 80% of the network, and it has some quite sophisticated cloud-based software applications for managing the displays, particularly the graphical layouts, and ingesting the different data streams that are connected to that. The new business, Journeo A/S, is based in Denmark.
This has been formed from Journeo's operation in Stockholm, where we have an engineering services business for the last 10 years and MultiQ, and that's now run by the managing director of the business that we acquired, Mads Henrik Hansen. The aim of Journeo A/S is to take everything that Journeo has to offer out into the Scandinavian market, but also bring back from that Scandinavian market the really modern aesthetic, engineering approach to their products, which look really cool. This next slide really is about the fabulous list of companies that we work through, sorry, we work for.
Obviously, predominantly, these are in the U.K., but there's a number of them that are outside the U.K. where we're dealing with, for example, a large media agency called Outfront Media, who have the New York City contract for the subway, obviously, Dublin Airport, Skånetrafiken, which is the transport, regional provider in southwest Sweden, and Copenhagen Airport, and Vertiseit, which is the Swedish-listed digital media company that we work with, and their subsidiary Grassfish. Really good selection of operator customers. We're very happy to work with a small, you know, coach operator that may have two or three coaches right through to operations with many thousands of them. The bar at the bottom is a sort of snapshot of a few KPIs.
We currently have 31,000 assets that could be buses, trains, coaches, or displays or pollution sensing equipment connected to our cloud-based platform that's growing all the time. Our onboard systems are now connected to about 30% of the buses and coaches in the U.K. I won't go through all of these, but there's just over 200 people, actually, in the company as I sit here today. Revenue's about GBP 50 million, and that's all delivered through these business units and 200 people. That's a quick introduction to what Journeo's about. I'll now hand over to Nick to run through the financial results.
Okay. 2024 was a good, very, very good year. Revenue was up 8% for the group to GBP 49.6 million. Another particularly pleasing bit was gross margin increased by 5% to 36%. We touched on this at the interims, but we've improved margin significantly. That obviously flowed through to gross profit where we were up 24% to GBP 17.7 million. We flowed the profit well down to PBT. We're up 33% to GBP 5 million for the year. EPS was up to 26.29p, which is a 46% uplift. We had a very low effective tax rate, which aided the uplift in EPS. That's a combination of our new tax claims and other pieces. We had a very low effective tax rate. Cash, we were very, very cash generative.
We moved to GBP 14.3 million cash, up by GBP 6.2 million from the year before. We also paid deferred consideration of GBP 1.25 million during the year as well on that, maybe in 2023. Operationally, cash actually moved by about GBP 7 million, just over in the year. We always talk about R&D and how much we spent there. We spent just over GBP 1.5 million during the year. It all passes through the P&L. Amortization matches capitalization. The profit of GBP 5 million is after the write-off of GBP 1.5 million of R&D. Into the segments, Russ has explained each segment. Fleet systems was a phenomenal year. We were up 45% for revenue there, GBP 23.7 million. That is nigh on doubled in two years. You know, very, very strong performance.
Gross margin is, it's, it's got the lowest margins in the group, but we had a 4% uplift in margin. We actually increased gross profit by 69%, GBP 6.7 million. The really pleasing bit with fleet is we had a bottom line in fleet of GBP 2.5 million, so an operating margin of over 10% in fleet. Passenger systems, we were up 5% to GBP 9.5 million, consistent uplift with last year. We have good margins here, so we're in the forties and we increased it by 3%. We're up to 47% margin, which means gross profit was up by 12% to GBP 4.4 million. Bottom line operating profit was a bit lower here, but has improved. We have a fairly fixed overhead base in there now.
It will only take, it only takes a bit more on uplifting revenue to move that to be, to be a very variable operating margin into Infotec. Revenue decreased here to GBP 12.4 million, missed exactly what we expected. As we've mentioned before, we had a large contract in New York, which ended during the year. That was fundamentally the movement in year-on-year revenue. If you just look at Infotec in terms of its like-for-like U.K. rail, it had its best ever year. Again, although the revenue decreased, it's as expected and we are pleased with performance. Again, margins were up here significantly, 7% up. Gross profit had, I guess, a much lower decrease. We're at GBP 4.6 million, GBP 6 million there. There's no real contribution for Infotec. It made just over GBP 2 million.
Operating margin is just over 15% there. Very, very good results. Journeo A/S, which is the Danish business we acquired in 2023, previously called MultiQ, we just have, we had three and a half to four months of it in 2023, a full year in 2024. Revenue was up to GBP 4 million. Gross margins are very good here, 48%. It delivered a gross profit of GBP 2 million. This business has the benefit that it has enough, it has a good recurring revenue base, which means it is profitable without winning any new business. It has a very good fixed income to start the year off, which then moves to group recurring revenue. We were up 40% of group recurring revenue year-on-year. We moved from GBP 5 million to GBP 7 million.
It's 14% of the total group revenue in the year. The SaaS element is about 40-45% of the total. The balance is more maintenance and services. SaaS is the area which I guess had the biggest growth in the year. Next slide. Contract wins. This is, I guess, a list of the announcements we made during the year. We did previously increase our announcement threshold. We had less announcements than we had historically, but the threshold is higher. They are large, large wins. The good thing with this list is it shows success across the group and the different areas. The first one, GBP 4.7 million for Transport for London, is fleet on bus.
The next one, GBP 3 million is success on train. We have won, we have done well there. Metroline in Manchester again is on bus. The following three, so the Northern Transport Partnership, Swansea, and Edinburgh are all within passenger systems business, and that is a mixture of hardware and recurring ongoing income. The bottom one is, although below a million, it shows a win for our Danish business, Umove, was a contract won by Journeo A/S. Operational highlights. As Russ said, we spent a lot of this year or last year getting ready for next steps. We formed the Journeo Design Centre for product development. Organization, organizational development. We have made a number of key recruits in key areas to get us ready for next step.
We've implemented group-wide HR systems and support programs. As Russ said, we've now got over 200 people. We've made steps there, and we retained all our ISO, cybersecurity, and information certifications.
Okay. Thanks, Nick. Really, this next couple of slides are about what we see, why Nick and I put our own money into this business, why we actually believe that there's an opportunity if we can get the technology and the services right to scale this business up significantly. I'm sure most of you are aware of the sort of smarter cities agenda, which has been going on for at least the last 20 years. That has moved from being about congestion to it being about globalization to these kind of five major sort of descriptors that we've been using to say, actually, what are these trends?
Are we just trying to fix a problem that's applicable just in the U.K., or is some of the solutions that we're developing, whether they're services or products or indeed software, does this have a potential for, you know, exposure growth in terms of, you know, world, worldwide deployment or certainly replicated in other major economies? These things are the urbanization, which is leading to more people coalescing on large cities. You know, London's a good example of that. That's leading to further congestion, and that's obviously a problem. There's then the climate change agenda where, lots of, governments are looking at how they can decarbonize parts of society and public transport and shipping, but pretty major areas to go. You've got the shift in economic power.
Whilst the pandemic affected globalization and started to see sort of friend-shoring sourcing or insourcing, there still is an inexorable move towards electric vehicle production in Asia, where China leads the world in renewable, both solar manufacture and battery technology manufacture, and also the rare earth products for the motors. Obviously, there are some demographic changes now where young people are in increasing numbers deciding not to take driving license and actually to use public transport. On the technological side, we can see things like with the IoT and the smarter cities agenda, where there just is going to be more connectivity between vehicles and the infrastructure and the signaling and things like highways monitoring as the world starts to adopt autonomous vehicles as part of this kind of change.
What Journeo has been doing is we've been creating the integrated services platform where we can link together all sorts of disparate technologies. It doesn't matter what the operator has or what the local authority has. We will connect it up and give them access to that over a cloud. That's kind of like a sort of a single level access. What we're starting to do then is to overlay machine learning and AI into that so that we can start to pull meaning or valuable sort of insights out of this connectivity. That's helping Journeo directly for things like our predictive maintenance schedules, but it's so much more that that can be used for. Those are kind of like the things that's in the background, you know, fragmented supply chain at the moment.
There are substantive government backing for a number of initiatives. It is things like the Bus Open Data, which is effectively trying to make the information more accessible, trying to get public transport to become a de facto choice. You have what is left of the Williams- Shapps Plan and Control Period 7 for rail. There are effectively two quite important initiatives that the government has started. One is the Bus Service Improvement Plan, which effectively put GBP 1.2 billion into the market to enable local authorities and fleet operators to form and enhance partnerships and have access to this. In December-January this year, that was extended by another GBP 958 million, taking the total up to GBP 2.2 billion. That is effectively going to provide a catalyst for further investment in clean energy vehicles for the next few years.
There is also something called City Regional Sustainable Transport Settlements, CRSTS, which is GBP 5.7 billion. That is effectively going into mayoral authorities. One of the aspects that we are very interested in there is that these mayoral authorities, a number of them, are looking at adopting the franchising model, which has been adopted obviously originally by Transport for London, but more recently by Transport for Greater Manchester with great success. With these schemes come sort of integrated park and ride schemes, cycle lanes, clean, you know, pollution sort of free zones, all of which are opportunities for Journeo, either through its public information businesses or through its fleet services businesses.
As a result of that, we're feeling that there's now a really good opportunity for Journeo to take another step forward and effectively double its revenues that take us through the GBP 100 million mark. If we're able to continue to drive out costs out of our integrated supply chains and unified manufacturer, we believe that this could lead to sort of GBP 100 million market cap opportunity for us. We're talking about a sort of two- to three-year timeframe for that. The way that we are going to achieve that is through organic growth. We won't be able to maintain the 45% in our fleet business. Obviously, that's not sustainable. There's a kind of cap where we can get that to, but we believe sort of 10% or more is realistic.
There are opportunities, and we've obviously, we're gonna come onto the questions shortly, but there are a number of opportunities for us in terms of consolidation, where some service providers or niche providers of services, whether that's in-street furniture or it's on vehicle, could make sense for us to acquire. Obviously that would give us some sort of leverage in there because we have more sort of advanced technology and a nationwide service to expand those businesses. Our recurring revenue has grown, and obviously that grows as a function of our sales. It gives us sort of high quality future visibility about revenue. We're also very interested now in businesses that are providing services to what we call adjacent markets, where Journeo at the moment doesn't have within its extent of supply or not within our firm boundary.
but it would make sense for us to have them within our firm boundary rather than them be subcontracted. 'cause obviously when you deal with a subcontract, ultimately, you don't actually have control of the priorities of the subcontracted business. This would enable Journeo to capture more of the spend on some of these larger infrastructure projects. At the moment, the sort of summary picture for Journeo is that we delivered what we set out to deliver in FY 2024. In fact, it's ended up better than we originally expected. That led to upgrades from Cavendish. You know, overall an 8% increase in revenue to just GBP 50 million. The profit, sort of GBP 5 million, very healthy cash generation, as Nick said, even after settling deferred consideration on the acquisitions.
There's a lot of momentum now, both in the U.K. and it's gathering momentum in our Scandinavian operations. I think that's probably a good point for us to stop with the sort of presentation. Do we hand back to Paul now for the questions?
Fantastic. Look, thank you very much indeed for your presentation, Russ, Nick. Ladies and gentlemen, do please continue to submit your questions just using the Q and A tab situated in the right-hand corner of your screen. Just while the team take a few moments to review those questions submitted today, I'd like to remind you the recording of the presentation, along with a copy of the slides and the presentation, will be available on the Investor Meet Company dashboard. Russ, Nick, as you can see, we've had a number of questions, both pre-submitted throughout today's presentation, and thank you to all the investors who submitted those. If I may just ask you just to click on that Q and A tab, and where appropriate to do so, just read out the question, give your response, and I'll pick up from you at the end.
Okay. Do you wanna go right up to the top then?
Yep.
Please. Oh, it's good. There's quite a few. Okay. It doesn't say who this is from, but it's who are your biggest competitors and what is the main reason for customers choosing Journeo over them?
We, our competitors really, we don't have one sort of monolithic competitor that we're up against. There tends to be different competitors in each of our business segments. That may be because we are sort of entering the market. We are, you know, we're trying to dislodge an incumbent. Or it could be that we are the incumbent and we've got people obviously trying to buy market share.
In our fleet systems business, which is predominantly bus, rail, and coach, the businesses that some of you might have heard of that we sort of compete with are companies like Tracsis on rail and to some extent Petards. In the bus and coach market, it tends to be smaller operator, sort of privately owned companies that can sometimes offer a lower cost on sort of a one-off basis. In our passenger business, we do not really have many competitors because there are not many people who can actually do the breadth of things that we do. There are companies sort of on the periphery of that that are specialists maybe in ticketing, and so they perhaps provide ticket vending solutions and they are able to provide some passenger information systems.
We may well find that there's a large contractor that picks up the whole contract. They perhaps will bring in displays from, say, from the Far East and then connect them up. We don't see a lot of that. In Infotec, it's on about 80% of the U.K. rail network now. There are competitors come up from time to time. I was trying to think of one of them, it was a company called Black Box who had a relationship, I believe, with Samsung for their displays. From time to time, there are sort of different companies come in there. As Infotec has also been growing, it's now starting to get involved directly with the very large 30 or 40 meter concourse wide displays.
There are very few businesses actually that can combine the sort of active digital media with the real-time information that they provide. The similar situation actually in Scandinavia. What we are finding is that there are not many companies that can actually provide both the in-street and the onboard technology. I must point out that, in terms of onboard connectivity, the Scandinavian market is ahead of the U.K. They have something called ITxPT, which is Internet for Public Transport. They have had that for quite some time. Their systems tend to be more deeply integrated. Journeo has benefited from that because we have had sort of advanced warning for many years about the kind of technology that we should be bringing into the U.K. We have used that to our benefit actually.
I hope that's enough on that one. We'll go take the next one. Don't wanna just have a, okay. Some of them are the same question, aren't they?
Yeah.
Okay. I'll take this one. Are you able to put a specific figure on your sales pipeline for this year? In the same presentation last year, we said the sales pipeline was GBP 60 million.
Yes, I can answer that. And as you say, as you can see there, our sales pipeline actually, when we started the year on January the first, was actually GBP 79 million. What we've been doing, we've recruited a new Group Sales Director, working across Journeo, supporting the Managing Directors or the Divisional Directors of each of our four businesses. And we've put in something called HubSpot, which is a unified CRM system.
Prior to this, Journeo Fleet and Passenger were using something called Pipedrive for CRM. The Danish and Swedish business we use is Salesforce.com. Infotec used something called EFACS, which is an ERP-based system. By putting all of the sales opportunities and pipelines together, the pipeline is now heading towards twice the figure that we've revealed here. The only reason in fact that we haven't included it in this presentation is it's not on a like-for-like basis. The actual overall sales pipeline is very significantly higher than GBP 75 million.
Okay. What is the geographical split for the business? That's perhaps one for Nick to answer.
Okay. I'll just pull out the notes. We are, so U.K., we are about GBP 40 million. So for 80%, 80% of us last year was U.K., and 20% was overseas.
Of the overseas, about half of it is Scandinavia. A mixture of Danish business we acquired and our Swedish business we already have. There is about GBP 5 million of other overseas revenue, about GBP 3.6 million related to the end or the last part of the U.S. contract with Infotec. We have about GBP 1.5 million, roughly, of sales to predominantly bus builders overseas. There is a number in China, there is Egypt, there are others. I guess the original source of the business is our UK operators, but the actual sale will be to either Chinese or Egyptian or other overseas builders.
Okay. Just again, there's lots of them repeat here. So there's a couple. Just bear with us. Okay. One here. Can we provide more color on the display to the New York City implementation?
Infotec secured a contract with a media company called Outfront Media, based in the US, to provide displays onboard the new New York City Metro. Outfront Media has the exclusive marketing rights onboard the new Metro between 2020 and 2030. As part of that contract, they are installing digital media screens on the new trains. The first phase, so there's 1,600 new, we call 'em subway cars, 1,600 of them being supplied under a $6 billion contract from the MTA. The vehicles are being manufactured by Kawasaki, a Japanese company who've set up a manufacturing presence in Nebraska.
Outfront Media placed a contract with Infotec to provide about 5,000 displays for these first 500 trains. It's roughly 100 of these digital media screens per train. The contract was about $18 million. That was already partway through when we acquired Infotec, and the project went through to completion in 2024. The subsequent phase is for about 600 additional trains. Kawasaki have made announcements to say that they have received the PO to start building them. Our customer, Outfront Media, advises that they're not currently taking up their option to fit the digital media screens on this next batch of trains because the passenger footfall on the Metro has been suppressed since the pandemic. They signed the contract in 2020 and then obviously the pandemic hit.
As a result of that, they haven't had anywhere near the same passenger footfall in order to monetize the displays on the screens. The trains are going to be built and they're gonna be pre-wired so that they can be retrofitted with digital media screens at some point in future. Whilst it's not concrete at this point in time, 'cause we speak to our customer twice a week, what they are saying to us is that President Trump has made statements about people returning to offices and that anecdotally the Metro is getting busier. If the passenger footfall metrics sustain the kind of tipping point that our media customer needs, then they would start to install the media screens. We've had some conversations with them about that. Nothing definitive at this stage. That's the position.
Okay. Okay. There are a couple of questions about the, I guess, market consensus for us. One question is that the consensus revenue for FY 2025 is GBP 52 million, which seems prudent. We are comfortable with the forecast that is in the market for us. I think that is the best answer to that. There is another question referencing are we likely to be H2 weighted this year?
We have been in many years. We were not last year. I suspect there is a small chance we might be slightly H2 weighted. So, yes, it is possible. Historically, we have been.
Okay.
What's the revenue?
Okay. What's the revenue split between government and private customers? That's difficult to answer. A lot of public transport has its origination in sort of government, whether that's actually direct CapEx through things like the BSIP or the funds that preceded that, or in fact whether it's coming from the local authority directly. More than likely it still has its roots in central government finance indirectly. We do have some commercial revenue. Quite a bit of what Journeo does in coach is actually private. The coach is privately owned and obviously the fleet operators are generally privately owned. In rail, a lot of the work we're doing is actually with the ROSCOs, which for those that don't know, that actually is effectively the leasing company that owns the rolling stock. So it's not really related to government funding.
Obviously the overseas isn't related to source of government finance. I can't put a figure on it, but it is a good proportion of what we do does originate in central government funding either directly or indirectly, but we are not completely reliant on it. There are several questions around plans for cash and acquisition.
I guess Russ answered in the presentation. There are, we have several acquisition targets and we would hope that we utilize some of the cash for acquisitions.
Yeah. I mean, there's a, one of the questions, what firm plans do we have for our cash over the next 12 months? What order do you give to acquisitions, buyback, and dividends? And how likely is a, a European acquisition?
Our priority, obviously we're a very cash-generative business and our priority is to deploy that cash to grow the company. We're at various stages of conversations with businesses that we think would, that we understand, that we know very well, that would fit very nicely into the Journeo portfolio. We believe that that's really the right place for us to grow the company. In due course, obviously dividends are a possibility, but they're not at the moment on our agenda nor are buybacks. We think we've got better use for that cash to grow the company.
In terms of European acquisitions, we are looking at potential acquisitions elsewhere in continental Europe and also in the United States. I would say that our priority, certainly for the medium term anyway, is the United Kingdom where there is a number of consolidation opportunities and also acquisitions in adjacent markets that we think can really help us scale the business up.
Okay. There is a question around, from the Cavendish forecast, as to why EPS is forecast to be lower next year or this year. From a PBT perspective, the Cavendish forecast is that we will be higher. There is more prudence around the tax charge. That is why the EPS appears to be lower. From a pure profit perspective, the expectation is that we will be higher.
Let's just say we're the same one. I can keep going.
A lot of them the same point. Just bear with us and see if there's any discomfort. Yeah. Covered that. We've covered that one.
Okay. I don't know.
I think we've actually covered most of the questions. I think they'll hand back to you.
Fantastic. Russ, Nick, thanks indeed. Thanks for covering all four of the questions you can. You will, if any further questions come through, have the ability to review those. We will publish responses where appropriate to do so on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, I know it is particularly important to you and the team. Russ, if I may, just ask you for a few closing comments, please.
Really, the sort of the takeaway from this is that the opportunity that we saw a number of years ago to link these disparate systems together, both in street and on vehicle, is gathering pace. There's more opportunities now. This is actually something that's expanding. It's not contracting. We've been building the technical delivery platform through a nationwide network of engineers, with spares in their vehicles to keep these things going 24/7. We also have the remote condition monitoring and cloud-based services now to scale them up truly. There's a number of areas that look very exciting. We're in a pretty strong cash position to execute acquisitions without initially having to come back to the market. It feels like the sort of vista for the next few years looks quite attractive.
We are very excited by the opportunities that are emerging. Thank you very much for everybody's time.
Fantastic. Russ, Nick, thanks indeed for updating investors today. Could I please ask investors not to close the session? It should be automatically redirected to provide your feedback in order that the team can better understand your views and expectations. This may take a few moments to complete and is greatly valued by the company. On behalf of the management team, Journeo, we'd like to thank you very much for attending today's presentation. That concludes today's session and good afternoon to you all.