TIDMSAAS
RNS Number : 0249H
Microlise Group PLC
25 July 2023
25 July 2023
Microlise Group plc
("Microlise", "the Group" or "the Company")
Trading Update
Supply chain issues begin to ease resulting in double digit
growth
Microlise Group plc (AIM: SAAS), a leading provider of transport
technology solutions to fleet operators, is pleased to provide a
half year update on trading for the six months to June 30, 2023
("the Period"). The Group expects to publish its interim results in
late September.
Trading update
Microlise experienced solid trading during the first half of
FY23, in-line with management expectations. The Group saw continued
growth in revenue, recurring revenue, ARR and profitability.
As a result, revenue for the first half of the year is expected
to show growth of 10% to GBP33.9m (H1 FY22: GBP30.7m) with
anticipated adjusted EBITDA(1) growth of 4% to GBP4.5m (H1 FY22:
GBP4.3M). Microlise's main growth driver in the period was
increased demand from OEM customers, contributing to ARR growth of
11%, of which 10.2% represented organic growth, to GBP44.8m (H1
FY22: 10.5% and GBP40.2M). New vehicle delays continued to slow
down deliveries to direct customers resulting in an order backlog
increase of 95%, which is expected to be delivered during H2 as new
vehicle lead times continue to improve. The delays to delivery for
direct customers, together with the investments made last year in
product development, operations, and sales & marketing,
impacted EBITDA margin in H1, however this will normalise in H2 as
the Company delivers against its order book for direct sales.
The Group's net cash at 30 June 2023 was GBP14.1m (31 December
2022: GBP16.7m), after net cash spend of GBP2.86m on acquisitions
during the period, including initial consideration of GBP1.86m for
Vita Software and the final deferred consideration instalment of
GBP1.0m in relation to the 2020 acquisition of Trutac. Several
large receipts were received post period end, totalling GBP2.8m,
this resulted in a cash conversion rate(2) of 80% of adjusted
EBITDA, which was lower than H122 (127%), reflecting this working
capital phasing. FY cash conversion rate expectations remain
unchanged.
Customers
New customer acquisition continued to be strong in the first
half, with the Group adding an additional 250 new customers,
including Leeds headquartered LF&E Refrigerated Transport, and
Northern Ireland based McCulla, both signing 6-year contracts.
Microlise continues to have high rates of customer retention and
very low churn. Churn in the six months under review was 0.5%,
emphasising the importance of Microlise's solutions to its
customers, which the Group continue to deepen through a combination
of its market leading solutions coupled with the introduction of
new integrated products.
Acquisition and Products
Microlise acquired Vita Software in March 2023 for a total net
consideration of GBP2.06m, expanding the Group's suite of
technology solutions to include resource and transport costing,
subcontractor management and invoicing solutions. The acquisition
has proven to be immediately earnings enhancing, and the Company
has made good progress with 2 contract wins for Vita's solutions to
existing clients. The integration of the acquisition has progressed
well and Microlise is confident of further customer successes going
forward.
Microlise Transport Conference
The Microlise Transport Conference, Europe's largest road
transport conference, returned for another year in May 2023. Over
50 speakers, 48 exhibitors, and more than 1,100 delegates attended
the event this year. They joined leaders from across the transport
industry to learn about the challenges and opportunities facing the
sector, as well as creating a space for them to network and
collaborate.
There were two interactive panel discussions that took place
this year, 'Alternative Fuel Future' and 'Road to Rail'. Both
sessions sparked debate surrounding two key topics that support the
industry's route to zero emissions and the government's wider 'net
zero' target. During the same time as the conference, Microlise
also hosted a separate event for investors. This provided a
hands-on demonstration of Microlise's technology, including its new
Transport Management System; 2 customer showcases; and a joint
presentation in which Microlise and OEM customers discussed
strategy in relation to the changing nature of vehicle fuel.
Link to video:
https://vimeo.com/user107326204/mtc23?share=copy
Outlook
Microlise has seen the global supply chain and microchip
shortages ease during the Period and the Board remains confident
that this trend will continue in the second half of 2023. These
supply chain issues have also reduced the availability of new
vehicles for our customers, leading to delays in the delivery of
projects to new customers. Despite this, the Group enters the
second half of the year in a strong position with a record order
book to deliver as it is beginning to see new vehicle lead times
begin to improve and expects this to improve further by Q4 2023. As
a result, the Company is confident of meeting market expectations
for revenue, profit and cash for the full year. The Group's cash
balance, continued strong cash generation and the GBP20m available
under its undrawn committed revolving credit facility, leave the
Group well placed to pursue its organic and acquisition growth
strategy.
Nadeem Raza, CEO, Microlise said : "We are very pleased with the
performance of the Group during H1, given the many challenges we
have had to overcome. These have included supply chain issues and a
shortage of new vehicles coming to market, both of which hampered
our ability to deliver solutions, though not to secure sales, such
that our order book is at a record level.
"We enter the second half in a strong position. With supply
chains improving coupled with the expectation that vehicle
deliveries will also improve in H2, the Board are confident in the
Group's continued successful growth."
Notes:
All financials are based on unaudited figures.
1 Earnings Before interest, tax, depreciation, amortisation and
share based payments.
2 Cash conversion is the % of cash generated from operating
activities as a % of adjusted EBITDA.
3 Analysts' revenue expectations for FY 2023 range from GBP66.5m
to GBP67.0m.
4 Analysts' Adjusted EBITDA expectations for FY 2023 range from
GBP9.1m to GBP9.2m.
5 Analysts' net cash expectations for 31 December 2023 range
from GBP18.3m to GBP18.9m.
For further information, please contact:
Microlise Group plc C/O SEC Newgate
Nadeem Raza, CEO
Nick Wightman, CFO
Singer Capital Markets (Nominated Tel: 020 7496 3000
Adviser & Broker)
Steve Pearce / James Moat / Harry
Gooden
SEC Newgate (Financial PR) Tel: 020 3757 6880
Bob Huxford / Molly Gretton / Harry Email: microlise@secnewgate.co.uk
Handyside
About Microlise
Established in 1982, Microlise Group Plc is a leading provider
of telematics and fleet management solutions. Its technology is
designed to help businesses improve efficiency, reduce emissions,
lower costs, and increase safety on the road.
With a range of products and services used by more than 400
enterprise clients globally, Microlise helps companies of all
shapes and sizes - across a wide range of industries - to better
manage their entire logistics operation.
Backed by a team of experienced professionals who provide
excellent customer service, the Group has won a number of awards,
including three Queens Awards for International Trade (2018) and
Enterprise (2019, 2020).
Headquartered in the United Kingdom, the company also has
offices in France, Australia, and India with a global staff base of
more than 670 industry professionals.
Handling over 599,000 subscriptions annually, Microlise joined
the Alternative Investment Market (AIM) in 2021, qualifying for the
London Stock Exchange's Green Economy Mark.
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