Trafficmaster skids after £53m charges

Shares in Trafficmaster plunged 23 per cent yesterday after the provider of traffic information and in-car navigation systems announced a three-fold increase in losses.

The group, as flagged in January, took an exceptional charge of £53m to cover a goodwill writedown as well as writedowns of its German and UK traffic networks.

The charge inflated Trafficmaster's losses to £63.3m for 2002 – more than three times the £20.4m loss that the company reported a year before. Sales were £34.9m, up from £30.9m. The shares closed down 2.5p at 8.5p.

"Many of our assets were acquired and developed to take advantage of a traffic information market that has not developed as expected," the company said, but added it believed the carrying value of its remaining assets was now "in line with expected future earnings potential".

The company reviewed the value of its assets to reflect its focus on newer navigation products such as Smartnav away from older products that provided traffic information without navigation. "The traffic information business in Continental Europe has not developed as previously expected and Trafficmaster has decided to suspend all further investment whilst considering its future plans in those marketplaces," it said.

Nevertheless, Sir James McKinnon, the chairman, said he was "confident" Trafficmaster was now positioned "to take advantage of the developing in-car navigation market".

He said he was "encouraged" by the outlook for Smartnav, "which we believe has enormous potential". Smartnav – a sophisticated navigation system that incorporates live traffic information and can re-route drivers if roads are jammed – was launched in June.