TIDMSAAS
RNS Number : 9131N
Microlise Group PLC
28 September 2023
28 September 2023
Microlise Group plc
("Microlise", "the Group" or "the Company")
Interim Results for the Six Months Ended 30 June 2023
Microlise Group sees double digit growth as supply chain issues
begin to ease
Microlise Group plc (AIM: SAAS), a leading provider of transport
management software to fleet operators, announces its unaudited
results for the six months ended 30 June 2023.
Financial Highlights
H1 FY23 H1 FY22 Change
(GBPm) (GBPm)
----------------------------------------------
Group revenue 33.9 30.7 10.5%
Recurring revenue 21.9 19.8 10.3%
Annual recurring revenue (ARR)(1) 44.8 40.2 11.5%
Gross Profit 20.5 18.4 11.8%
Adjusted EBITDA (2) 4.5 4.3 4.0%
Adjusted EBITDA margin 13.2% 14.0%
EBITDA (2) 4.2 4.1 2.6%
Profit before tax 1.5 1.4 5.7%
Profit before tax margin 4.5% 4.7%
Basic Earnings per share 1.05p 0.94p 12.1%
Adjusted cash conversion rate (3) 80.0% 127.0%
Net cash / (net debt) 14.1 14.8
---------------------------------------------- --------- --------
(1) Annual Recurring Revenue ("ARR"), which is the period
exit rate for recurring subscription and transaction revenue.
(2) EBITDA comprises Operating profit as reported in the Consolidated
statement of comprehensive income, adjusted for amortisation
of intangible assets and depreciation. Adjusted EBITDA comprises
EBITDA, adjusted for share-based payments expense.
(3) The Adjusted cash conversion rate is cash generated from
operations as a percentage of the Adjusted EBITDA.
-- Continued good demand for Microlise solutions, with new
customer acquisition particularly strong.
-- 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)
-- 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
-- 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 of 80%
of adjusted EBITDA, which was lower than H1 FY22 (127%), reflecting
this working capital phasing.
Operational Highlights
-- More than 250 new customers added during the period.
-- 12 major multi-year renewals signed in the period including Tesco, Bidfood and Pall-ex.
-- Excellent customer retention with churn of just 0.5%.
-- First acquisition since IPO of Vita Software for GBP1.86m on cash free debt free basis .
-- Acquisition has expanded product suite to include resource
& transport costing, subcontractor management and invoicing
solutions with two upsells made already.
-- Growth in subscriptions of 10% during the six months to 626K.
Nadeem Raza, CEO of Microlise, commented: "Microlise delivered
another strong performance during H1 2023 as we successfully
executed our growth strategy. We secured new customers in our key
geographies beyond the UK including France, Australia and New
Zealand, expanded our customer base, and efficiently integrated our
latest acquisition.
"We have successfully navigated the Company through global
supply chain issues and subsequent delays in new vehicle
availability, maintaining strong relationships with our valued
customers. We are seeing significant improvements in all these
situations, which we expect to have normalised by the start of
2024.
"During the second half of the year, our focus will remain on
investing in growth, expanding our product portfolio, and growing
our strong customer base and geographical presence. Whilst it is
sensible to look to the future with a degree of caution, given the
continuing global macro-economic challenges, the Company's positive
trading performance during the period and proven ability to
navigate these challenges, underpin the Board's confidence that the
Group's performance for FY23 will be in line with market
expectations."
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 SaaS
technology provider of fleet management and IIoT solutions. Its
technology is designed to help businesses bring connectivity to its
products and operations, 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 and products.
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 690 industry professionals.
Handling over 626,000 subscriptions annually, Microlise joined
the Alternative Investment Market (AIM) in 2021, qualifying for the
London Stock Exchange's Green Economy Mark.
Chairman's Statement
On behalf of the Board, I am pleased to announce Microlise's
results for the six-month period ended 30 June 2023. Despite the
prevailing macro-economic challenges, the Group continued to make
solid progress toward its strategic goals, reflecting the
dedication both of staff and management. This is best observed in
the growth in revenue where Microlise delivered an increase of
10.5% during the period, from GBP30.7m in H1 2022 to GBP33.9m in H1
2023.
The Company, along with the broader transport industry,
continued to grapple with global component shortages during the
first half of the period, which in turn impacted the availability
of new vehicles. However, we are pleased to report that we are
seeing positive signs of improvement and are confident component
availability will return to pre-pandemic levels in H2, with new
vehicle lead times some three to six months later.
We were delighted to announce the acquisition of Vita Software,
a provider of Transportation Management Systems, on 14 March 2023.
This was a milestone event, as our first acquisition since listing
which has already proved a success, resulting in new product
sales.
Our strategic focus for the next six months remains unchanged,
and we will continue to review additional M&A opportunities
that complement our product suite and customer strategy. We remain
focused on our international expansion with particular interest in
France, Australia and New Zealand, and on ensuring our customers
benefit through the broader use of our comprehensive, integrated
product range.
On behalf of the Board, I would like to thank the Microlise
management team and employees for their ongoing hard work and
determination, and our shareholders for their continued support.
The commitment of our stakeholders is instrumental to our success
and we look forward to updating you at the end of the year with our
Full Year results.
Jon Lee, Non-Executive Chairman
CEO Statement
Microlise has traded well in the first half of FY2023, showing
continued growth in revenue and profitability. Although we are
seeing supply chain issue and chip shortages normalise, lead times
on new vehicles are not expected to recover to pre-pandemic levels
until the end of the year. Despite these headwinds, we continue to
deliver against a strong order book from our OEM customers
underpinning our confidence that we will achieve market
expectations for the full year.
We continued to strengthen our global business, adding 250 new
customers in the first 6 months of FY2023, while growing/extending
contracts with 12 of our existing large enterprise customers. At
the same time, we maintained an extremely low churn rate of 0.5%,
demonstrating that once our solutions are established within our
customers' operations, they become essential and invaluable to the
success of their businesses.
We acquired Vita Software in March 2023, to expand the Group's
suite of technology solutions. The acquisition has proven to be
immediately earnings enhancing, and the Company has already signed
two contracts to provide Vita's solutions to Microlise's existing
clients.
In addition, the Microlise Transport Conference returned in May
2023, which included sessions specifically for investors and
research analysts. The conference was a huge success and reinforced
Microlise as a leading solutions provider and one that is central
to the UK transport industry and beyond.
Market
At the start of H1 2023, our customers continued to face
significant challenges posed by the current market conditions,
including the war in Ukraine, unprecedented global supply chain
issues, chip shortages and rising fuel costs. However, as expected,
we saw the global supply chain and chip shortages begin to diminish
towards the end of the period and expect this trend to continue
through the rest of the year.
These supply chain issues significantly reduced the availability
of new vehicles for our customers, creating a substantial order
backlog, and resulting in delays in the delivery of projects to new
customers. We continue to see signs of improvement in new vehicle
lead times, and we expect this to continue with a lag behind supply
chain improvements by three to six months. We are confident that
this will be back to pre-pandemic levels by the start of 2024.
Customer Base
Securing new customers and establishing enduring customer
relationships remains at the core of our business. We achieve this
by continuously expanding and evolving our product offerings to
cover new functionalities and geographical areas.
During the six months under review, we added over 250 new
customers including Leeds-headquartered LF&E Refrigerated
Transport, and Northern Ireland-based McCulla, both signing
six-year contracts. Other key multi-year contracts include the
GBP3.5M new business win with the UK's largest car transportation
business, which sees a 1,405-vehicle implementation of products
such as Fleet Performance with Driver Performance Monitoring,
Safety Module, Remote Tachograph Download and Forward-Facing Camera
Systems. This strong performance highlights the importance of the
Microlise offering in helping fleet operators improve efficiencies,
minimise costs and protect margins.
Post period end, we have signed major contracts with two of
Australia's largest grocery retailers. These two significant
contracts demonstrate progress made against our strategy of
enlarging our geographical footprint, alongside the attraction of
our product offering.
12 major multi-year renewals were signed in the year to date
including Tesco, Bidfood and Pall-ex, with more targeted to close
in Q4.
Microlise continued to have high rates of customer retention and
extremely low churn of 0.5% during the period, reflecting the
importance of the Company's solutions to its customers and the
loyalty of our customer base.
Product Offering and M&A
Fleet operators face rising fuel prices, driver shortages and
delays in new vehicle availability. Our solutions, which help make
the most efficient use of assets, thereby reducing fuel, the time
drivers are on the road, and wear and tear on vehicles, remain of
crucial importance.
In March 2023, as part of the Company's strategic growth plan,
Microlise acquired Vita Software for an initial consideration of
GBP1.86 million cash payment, on a cash free, debt free basis, with
the initial consideration funded from the Company's existing cash
reserves. In addition, the Company will pay a deferred
consideration of GBP0.2 million after 12 months subject to any
claims. The acquisition expanded the Group's suite of technology
solutions to include resource and transport costing, subcontractor
management and invoicing solutions. It has proven to be immediately
earnings enhancing, and the Company has made strong progress
already with two upsells of Vita's solutions to existing clients.
The software is applicable to fleets of all sizes, supporting our
strategy to expand into smaller fleets.
The integration of the acquisition has progressed well, and we
expect there to be significant opportunity for upsell and
cross-sell into the Company's broader client base. This will enable
the Company to strengthen customer relationships and reinforce
Microlise's position as a leading provider of transport technology
solutions.
Strategic Focus
Our strategy remains focused on growth and ensuring our solution
remains best-in-class for HGV fleet operators. We remain focused on
continuing to navigate current market challenges, including supply
chain issues and reduced vehicle availability, while maintaining
our strong trading performance.
As technology evolves, our customers demand ever-stronger
assurances, and we are dedicated to meeting these demands.
Therefore, we have invested in security measures for our blue-chip
customer base including replacement enterprise firewalls using
additional services to help us on our Zero Trust journey
complimented with the Nvidia Mellanox Software Defined Network. We
have leveraged our Exposure Management Platform tools and created
Monitoring Dashboards for Software Vulnerabilities.
We will also continue to invest heavily in product development,
ensuring that we remain at the forefront of our industry, bringing
new, innovative solutions to our platform that benefit our
customers.
During the period, we have remained focussed on international
expansion, making solid progress across a number of key geographies
including Australia and New Zealand. As described above we have
signed two new contracts with leading Australian grocery retailers,
demonstrating this progress, as well as the attraction of our
expanded product offering and services.
M&A remains a core part of our strategy and we continue to
have a robust pipeline of opportunities. Our acquisition of Vita
Software during the period has already provided opportunities to
further embed Microlise into customer operations. We continue to
assess further acquisition opportunities and will act appropriately
should they align with our immediate and long-term strategic
focus.
Microlise Transport Conference
The Microlise Transport Conference in May was a resounding
success, bringing together a remarkable assembly of industry
leaders and innovators with the aim of addressing the current
sector challenges and seizing the many promising opportunities
available within today's market. With over 1,100 delegates, 48
exhibitors, and more than 50 distinguished speakers, the conference
marked a significant milestone in our commitment to fostering
collaboration and change within the industry.
This year, we also hosted our first investor-focused event as
part of the conference, to showcase Microlise's solutions both to
investors and investment commentators. We were pleased with the
positive feedback we received and look forward to hosting similar
events at future conferences.
People
During the period Nick Wightman was appointed to the Board as an
Executive Director in the role of Chief Financial Officer. Nick
replaced Bill Wynn, who announced his retirement after 15 years
with the Company.
In August 2023 a new Strategy and M&A Director was appointed
to the senior leadership team, who is responsible for enabling and
accelerating the company's profitable, sustainable growth.
Shenny Remtulla has held senior leadership positions in several
large, branded consumer multinational organisations, including Head
of Strategy at SABMiller plc. He brings a long and successful track
record of creating and executing corporate and commercial growth
strategies and delivering performance improvement.
Prior to this, Shenny spent 10 years as a strategy consultant
with Bain & Company across North America, Europe and Africa in
a variety of sectors, including, FMCG / CPG, Consumer Products,
Financial Services, Telecoms, Transportation, Natural Resources,
etc., as well as a dedicated assignment within the Private Equity
Practice.
ESG
Microlise is continuing to develop its ESG credentials. In April
2023, we achieved 'Great Place to Work' and 'Great Place to Work
for Women' accreditation, recognising our commitment to improving
the work experience of our employees and their wellbeing.
During the period, we completed the installation of 502 solar
panels at our Nottingham HQ, which aims to reduce the sites annual
carbon footprint by over 80 tonnes of CO2. We also have plans to
expand our current on-site EV charging point infrastructure, as
more staff take up the EV Salary Sacrifice Scheme the business has
introduced.
We are incredibly proud of the headway we have made to date and
look forward to updating the market on our continued progress.
Outlook
Microlise delivered another strong performance during H1 2023 as
we successfully executed our growth strategy. We secured new
customers in our key geographies beyond the UK including France,
Australia and New Zealand, expanded our customer base, and
efficiently integrated our latest acquisition.
We have successfully navigated the Company through global supply
chain issues and subsequent delays in new vehicle availability,
maintaining strong relationships with our valued customers. We are
seeing significant improvements in all these situations, which we
expect to have normalised by the start of 2024.
During the second half of the year, our focus will remain on
investing in growth, expanding our product portfolio, and growing
our strong customer base and geographical presence.
Whilst it is sensible to look to the future with a degree of
caution, given the continuing global macro-economic challenges, the
Company's positive trading performance during the period and proven
ability to navigate these challenges, underpin the Board's
confidence that the Group's performance for FY23 will be in line
with market expectations.
Nadeem Raza, Chief Executive Officer
CFO's Statement
The financial results for the six-month period to 30 June 2023
reflect a further period of profitable growth for Microlise despite
the challenges widely reported across all industry sectors.
Revenue
KPIs for the six months ended 30 June H1 FY23 H1 FY22 Change
2023 (GBPm) (GBPm)
Group revenue 33.9 30.7 10.5%
Recurring revenue 21.9 19.8 10.3%
Recurring revenue as % of Group revenue 64.5% 64.6% (0.1)%
Annual recurring revenue (ARR) 44.8 40.2 11.5%
Non-recurring revenue 12.0 10.9 10.8%
Installation 1.3 0.8 58.9%
Hardware 9.5 8.8 7.9%
Professional services 1.2 1.2 (1.7)%
----------------------------------------- -------- -------
Despite supply chain issues having a significant impact on new
vehicle availability for our customers, resulting in delays in the
delivery of projects to new customers, revenue for the 6 months
ended 30 June 2023 was GBP33.9m, an increase of 10% (GBP30.7m in H1
FY22) reflecting strong demand from our existing customer base.
Recurring revenue increased 10% to GBP21.9m (H1 FY22: GBP19.8m),
representing 64.5% of total revenues (64.6% in H1 FY22). New
customer wins, together with growth in our existing customer's
fleets and the recent acquisition of Vita Software resulted in 11%
growth in Annual Recurring Revenue (ARR) to GBP44.8m as of 30 June
2023, of which 10.2% represented organic growth (H1 FY22: 10.5% and
GBP40.2m). Non-recurring revenue for the period increased 11% to
GBP12.0m (H1 FY22 GBP10.9m). This increase was driven primarily by
strong OEM revenue with record orders, and the priority given to
satisfying OEM hardware demand, where supply chain shortages caused
constraints.
During the 6-month period, 250 new clients and a number of
contract extensions and renewals were secured. In addition to
winning new business and deepening existing accounts, the Group
successfully maintained an extremely low rate of customer churn by
value at 0.5% (FY22: 0.4%) reflecting the importance of Microlise's
software solutions in our customers' operations.
Gross Profit
Gross profit for the period increased by 11.8% to GBP20.5m (H1
FY22: GBP18.4m), driven by improved recurring revenue and recurring
margin. This resulted in an increase in gross margins to 61% from
60% in H1 FY22.
Operating Expenses
Operating expenses in the 6-month period ended 30 June 2023
increased 15% to GBP16.8m (H1 FY22: GBP14.6m). Operating expenses
represents employee costs, premises costs, marketing costs,
research & development costs (net of capitalised costs),
finance charges, and administration costs.
The 14% increase in staff costs in the 6 months ended 30 June
2023 to GBP14.3m (H1 FY22: GBP12.5m) reflects our planned
investment into our global sales force, which has seen headcount
increase by an average of 18% in the period. The increase also
reflects the costs associated with the implementation of our
Employee Engagement strategy. As part of this strategy, we ensure
market rate alignment for salary roles, the introduction of
numerous cross-company social events and team collaboration events,
the introduction of employee engagement initiatives, increased
staff training and the introduction of a share option scheme for
staff. Staff costs also include commissions reflecting the
increased new customer win rate. Headcount in the period increased
by 8.4% to 703 (H1 FY22: 644) overall.
Capitalised development costs in the period were GBP1.3m (H1
FY22: GBP0.8m), reflecting the investment the Group has made in the
innovation and development of its range of products. Amortisation
of capitalised development costs in the period was GBP0.5m (H1
FY22: GBP0.3m).
Adjusted EBITDA and Profit Before Tax
Adjusted EBITDA in the 6 months ended 30 June 2023 increased 4%
to GBP4.5m (H1 FY22 GBP4.3m), with adjusted EBITDA margin for the
period at 13.2% (H1 FY22: 14.0%). The decrease in the EBITDA margin
was a result of the planned increase in operating expenses
summarised above. To provide a guide to the underlying business
performance, adjusted EBITDA excludes depreciation, amortisation,
interest, tax and share based payments.
In the 6 months ended 30 June 2023 profit before taxation
increased 5.7% to GBP1.5m (H1 FY22: profit of GBP1.4m).
EPS and Dividend
The Group made a profit after taxation in the period of GBP1.2m
(H1 FY22: GBP1.1m), an increase of 12% over the same period in
2022.
As a result of the increase in profit after taxation, the
reported basic earnings per share increased 12% to 1.05p (H1 FY22:
0.94p) and the diluted earnings per share increased 13% to 1.05p
(H1 FY22: 0.93p).
The Board still does not feel that it is an appropriate time to
commence paying dividends, as the Company continues to invest in
its growth strategy.
Group Statement of Financial Position
The Group had net assets of GBP74.9m at 30 June 2023 (30 June
2022: GBP72.8m), with the increase primarily driven by the
acquisition of Vita Software Limited.
Cashflow and Net Cash
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. Investment
in capital expenditure increased by 108% to GBP1.6m (H1 FY22
GBP0.8m) reflecting the acceleration of our investment programme on
security measures. Several large receipts were received post period
end, totalling GBP2.8m, this resulted in a cash conversion rate of
80% of adjusted EBITDA, which was lower than H1 FY22 (127%),
reflecting this working capital phasing. Full year cash conversion
rate expectations remain unchanged.
Banking Facility
The Group has remained comfortably within its banking covenants
which relate to available headroom and EBITDA performance. The
Group agreed a GBP20.0m committed revolving cash flow facility with
HSBC Bank PLC upon IPO. The Group has not utilised any of this
facility to date. The Group's gross cash of GBP14.1m and the
undrawn GBP20.0m facility gives the Group access to GBP34.1m of
capital, which the Directors believe is sufficient in order to
support Microlise's growth plans as first set out at the IPO in
July 2021. The Board are currently in discussions with HSBC
regarding the renewal of its facility which expires in July
2024.
Nick Wightman, Chief Financial Officer
Interim unaudited Consolidated Statement of Comprehensive
Income
for the six months ended 30 June 2023
Six months Six months
ended ended
30 June 30 June
2023 2022
Note GBP'000 GBP'000
------------------------------------------------- ----- ------------ ------------
Revenue 1 33,887 30,675
Cost of sales (13,374) (12,322)
------------------------------------------------- ----- ------------ ------------
Gross profit 20,513 18,353
Other operating income 541 459
Administrative expenses (19,728) (17,104)
Operating profit 1,326 1,708
Interest income 151 1
Interest expense (160) (142)
Share of profit/(loss) of associate
net of tax 204 (127)
Profit before tax 1,521 1,440
Taxation 3 (299) (350)
------------------------------------------------- ----- ------------ ------------
Profit for the period 1,222 1,090
Other comprehensive income for the
period
Currency translation differences (64) 47
Total comprehensive income for the
period attributable to the equity shareholders
of Microlise Group PLC 1,158 1,137
------------------------------------------------- ----- ------------ ------------
Earnings per share
Basic earnings per share (pence) 4 1.05 0.94
------------------------------------------------- ----- ------------ ------------
Diluted earnings per share (pence) 4 1.05 0.93
------------------------------------------------- ----- ------------ ------------
Interim unaudited consolidated Statement of Changes in
Equity
Share Share Retained Total
Capital Premium earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000
======================================= ========= ========= ========== ========
At 1 January 2022 116 17,630 53,802 71,548
Comprehensive income for the period
to 30 June 2021
Profit for the period - - 1,090 1,090
Other comprehensive income - - 47 47
--------------------------------------- --------- --------- ---------- --------
Total comprehensive income for
the period - - 1,137 1,137
--------------------------------------- --------- --------- ---------- --------
Share based payment - - 181 181
--------------------------------------- --------- --------- ---------- --------
Total transactions with owners - - 181 181
--------------------------------------- --------- --------- ---------- --------
At 30 June 2022 116 17,630 55,120 72,866
--------------------------------------- --------- --------- ---------- --------
Comprehensive income for the period
to 31 December 2022
Profit for the period - - 263 263
Other comprehensive income - - (41) (41)
--------------------------------------- --------- --------- ---------- --------
Total comprehensive income for
the period - - 222 222
--------------------------------------- --------- --------- ---------- --------
Share based payment - - 380 380
Total transactions with owners - - 380 380
--------------------------------------- --------- --------- ---------- --------
At 31 December 2022 116 17,630 55,722 73,468
--------------------------------------- --------- --------- ---------- --------
Comprehensive income for the period
to 30 June 2023
Profit for the period - - 1,222 1,222
Other comprehensive income - - (64) (64)
--------------------------------------- --------- --------- ---------- --------
Total comprehensive income for
the period - - 1,158 1,158
--------------------------------------- --------- --------- ---------- --------
Share based payment - - 245 245
--------------------------------------- --------- --------- ---------- --------
Total transactions with owners - - 245 245
--------------------------------------- --------- --------- ---------- --------
At 30 June 2023 116 17,630 57,125 74,871
======================================= ========= ========= ========== ========
Interim unaudited Consolidated Statement of Financial
Position
as at 30 June 2023
Note 30 June 31 December 30 June
2023 2022 2022
GBP'000 GBP'000 GBP'000
------------------------------- ------ --------- ------------ ---------
Assets
Non-current assets
Property, plant and equipment 9,414 8,292 8,645
Intangible assets 5 76,595 75,031 75,373
Investments in associate 1,572 1,368 1,719
Loan to associate 1,000 1,000 -
Trade and other receivables 2,976 3,078 2,285
Total non-current assets 91,557 88,769 88,022
------------------------------- ------ --------- ------------ ---------
Current assets
Inventories 3,335 2,635 3,516
Trade and other receivables 22,714 16,760 18,817
Corporation tax recoverable 1,437 1,289 1,160
Cash and cash equivalents 14,063 16,683 15,774
------------------------------- ------ --------- ------------ ---------
Total current assets 41,549 37,367 39,267
------------------------------- ------ --------- ------------ ---------
Total assets 133,106 126,136 127,289
------------------------------- ------ --------- ------------ ---------
Current liabilities
Lease liabilities (1,056) (821) (768)
Trade and other payables (34,372) (29,183) (32,468)
Total current liabilities (35,428) (30,004) (33,236)
------------------------------- ------ --------- ------------ ---------
Non current liabilities
Lease liabilities (718) (926) (817)
Trade and other payables (16,830) (16,898) (15,092)
Deferred tax (5,259) (4,840) (5,278)
Total non current liabilities (22,807) (22,664) (21,187)
------------------------------- ------ --------- ------------ ---------
Total liabilities (58,235) (52,668) (54,423)
------------------------------- ------ --------- ------------ ---------
Net assets 74,871 73,468 72,866
------------------------------- ------ --------- ------------ ---------
Equity
Issued share capital 116 116 116
Share premium account 17,630 17,630 17,630
Retained earnings 57,125 55,722 55,120
------------------------------- ------ --------- ------------ ---------
Total equity 74,871 73,468 72,866
------------------------------- ------ --------- ------------ ---------
Interim unaudited Consolidated Statement of Cash Flows
for the period ended 30 June 2023
Six months Six months
ended ended
30 June 30 June
Note 2023 2022
GBP'000 GBP'000
---------------------------------------------- ------- ----------- ------------
Cash flows from operating activities
Cash generated from operations A 3,571 5,714
Tax paid (38) (28)
Net cash generated from operating activities 3,533 5,686
------------------------------------------------------- ----------- ------------
Cash flows from investing activities
Purchase of property, plant and equipment (1,593) (764)
Proceeds on disposal of property, plant 53 -
and equipment
Additions to intangible assets (1,262) (820)
Purchase of subsidiaries (TruTac Limited
deferred consideration paid) (1,000) (1,000)
Purchase of subsidiaries (Vita Software (1,803) -
Limited)
Interest received 151 1
Net cash used in investing activities (5,454) (2,583)
------------------------------------------------------- ----------- ------------
Cash flows from financing activities
Interest paid (155) (135)
Lease liability payments (535) (409)
Net cash used in financing activities (690) (544)
------------------------------------------------------- ----------- ------------
Net (decrease)/increase in cash and cash
equivalents (2,611) 2,559
Cash and cash equivalents at beginning of
the year 16,683 13,210
Foreign exchange (losses)/gains (9) 5
------------------------------------------------------- ----------- ------------
Cash and cash equivalents at end of the
year B 14,063 15,774
---------------------------------------------- ------- ----------- ------------
Notes to the i nterim unaudited c onsolidated statement of cash
flows
for the period ended 30 June 2023
A. Cash generated from operations
The reconciliation of profit for the period to cash generated
from operations is set out below:
Six months Six months
ended ended
30 June 30 June
2023 2022
GBP'000 GBP'000
--------------------------------------------- ----------- ------------
Profit for the period 1,222 1,090
Adjustments for:
Depreciation 1,223 980
Amortisation 601 389
Amortisation - business combination assets 1,080 1,045
Profit on disposal of tangible fixed assets (18) -
Share based payments 245 181
Net interest costs 9 141
Share of (profit)/loss of associate (204) 127
Tax charge 299 350
---------------------------------------------- ----------- ------------
4,457 4,303
Working capital movements:
Increase in inventories (700) (575)
Increase in trade and other receivables (6,013) (3,249)
Increase in trade and other payables 5,827 5,235
Cash generated from operations 3,571 5,714
---------------------------------------------- ----------- ------------
.
B. Analysis of net cash
At 1 January Cash flow Non-cash At
2022 changes 30 June
2022
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------------- ---------- --------- ---------
Lease liabilities (1,711) 409 (283) (1,585)
---------------------------- ------------- ---------- --------- ---------
Liabilities arising
from financing activities (1,711) 409 (283) (1,585)
Cash and cash equivalents 13,210 2,559 5 15,774
Net cash 11,499 2,968 (278) 14,189
---------------------------- ------------- ---------- --------- ---------
At 1 January Cash flow Non-cash At
changes 30 June
2023 2023
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------------- ---------- --------- ---------
Lease liabilities (1,747) 535 (562) (1,774)
---------------------------- ------------- ---------- --------- ---------
Liabilities arising
from financing activities (1,747) 535 (562) (1,774)
Cash and cash equivalents 16,683 (2,611) (9) 14,063
Net cash 14,936 (2,076) (571) 12,289
---------------------------- ------------- ---------- --------- ---------
Notes to the interim unaudited financial information
General information
The parent company is a holding company and its subsidiaries are
businesses that provide technological transport and fleet
management solutions. Its technology is designed to help businesses
improve efficiency, reduce emissions, lower costs, and increase
safety on the road . The company is a public limited company listed
on AIM, limited by shares, incorporated and domiciled in England.
The address of the registered office is Farrington Way, Eastwood,
Nottingham, NG16 3AG.
Basis of preparation
This interim announcement and condensed consolidated interim
financial information has been prepared in accordance with the
recognition and measurement requirements of UK adopted
International Accounting Standards as effective for periods
beginning on or after 1 January 2023 ('IFRS').
In preparing these interim financial statements, the Board have
considered the impact of any new standards or interpretations which
will become applicable for the next Annual Report and Accounts
which deal with the year ending 31 December 2023 and there are not
expected to be any changes in the Group's accounting policies
compared to those applied at 31 December 2022, a full description
of which are contained in the financial statements for the period
ended 31 December 2022 which are available on our website.
There are no new standards, interpretations and amendments in
issue which are not yet effective in these financial statements,
expected to have a material effect on the Group's future financial
statements.
The principal accounting policies used in preparing the interim
results are those the Group expects to apply in its financial
statements for the year ending 31 December 2023.
The financial information does not contain all of the
information that is required to be disclosed in a full set of IFRS
financial statements. The financial information for the periods
ended 30 June 2023 and 30 June 2022 is unaudited and does not
constitute the Group's statutory financial statements for the
period.
The statutory audited financial statements for the year ended 31
December 2022 have been filed at Companies House. The auditor's
report on those financial statements was unqualified, did not
include references to any matters to which the auditor drew
attention by way of emphasis without qualifying its report and did
not contain a statement under section 498(2)-(3) of the Companies
Act 2006.
The interim financial information has been prepared under the
historical cost convention unless otherwise specified within these
accounting policies. The financial information and the notes to the
financial information are presented in thousands of pounds sterling
('GBP'000'), the functional and presentation currency of the Group,
except where otherwise indicated.
The policies have been consistently applied to all periods
presented, unless otherwise stated.
Exceptional items
Exceptional items are significant items of income or expense
which, because of their size, nature and infrequency of the events
giving rise to them, merit separate presentation to provide further
understanding of the underlying financial performance of the Group
during the period.
Going concern
The Group had cash balances of GBP14.1m at 30 June 23 (30 June
2022: GBP15.8m) and an undrawn revolving bank facility of GBP20
million. The facility may be used for general corporate and working
capital purposes and for permitted acquisitions. This facility is
due to be renewed in July 2024 and, whilst it is not anticipated to
be required for use in the immediate future, the directors expect
the facility will be available to be renewed at that time.
The Group has prepared forecasts for the period to 31 December
2024 and a range of sensitivities have been run on the working
capital model. The directors consider a scenario in which the
business will face liquidity issues or breach covenant conditions
in respect of facilities is remote. As part of the sensitivity
analysis the directors have considered the impact of a reduction in
turnover from their principal customer and the impact on working
capital and are satisfied that in such a scenario the Group has
sufficient liquid resources to restructure and continue as a going
concern servicing the remaining customer base.
In view of the funds and facilities available to the Group the
directors consider that there is significant cash headroom in the
forecasts and the going concern basis of preparation is therefore
appropriate.
1. Segmental information
Recurring revenue represents the sale of the Group's full
vehicle telematics solutions, support and maintenance. Non
recurring revenue represents the sale of hardware, installation and
professional services.
Revenue in respect of the set up, supply of hardware and
software installation is recognised at a point in time.
Professional services including project management, managed
services and support services income is recognised over the period
when services are provided.
Six months Six months
ended ended
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------- ----------- --------------
By type
Revenue recognised at
a point in time:
Supply of hardware and
installation 10,811 9,595
--------------------------------- ----------- --------------
Revenue recognised over
time:
Professional services
including project management 1,221 1,242
Managed service agreement
income 20,185 18,219
Other support and maintenance
services 1,670 1,619
--------------------------------- ----------- --------------
23,076 21,080
------------------------------- ----------- --------------
33,887 30,675
By destination:
UK 30,661 27,812
Rest of Europe 472 684
Rest of the World 2,754 2,179
Total revenue 33,887 30,675
--------------------------------- ----------- --------------
One customer contributed GBP12.2m and 36% of revenue to the six
months ended 30 June 2023 (GBP9.6m and 31% to the six months ended
30 June 2022).
Due to the nature of revenue, there is not considered to be
seasonality in relation to the reported results.
The directors consider the Group to comprise two complementary
segments in respect of fleet management services (Microlise) and
tachograph specific software and analysis services (TruTac).
Total
Total Six months
Six months ended
ended 30 30 June
Microlise TruTac June 2023 Microlise TruTac 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ---------- -------- ------------ ---------- -------- ------------
Revenue 31,397 2,490 33,887 28,711 1,964 30,675
--------------------- ---------- -------- ------------ ---------- -------- ------------
Depreciation and
amortisation 2,560 344 2,904 2,125 289 2,414
--------------------- ---------- -------- ------------ ---------- -------- ------------
Operating profit 822 504 1,326 1,400 308 1,708
Net interest (27) 18 (9) (139) (2) (141)
Share of associate
profit/(loss) 204 - 204 (127) - (127)
Profit before
tax 999 522 1,521 1,134 306 1,440
--------------------- ---------- -------- ------------ ---------- -------- ------------
The results for Vita Software Limited post-acquisition are
included within in the Microlise segment above due to the nature of
services being aligned with that segment and are not considered
material to report separately.
2. Alternative performance measures
In reporting financial information, the Group presents
alternative performance measures (APMs), which are not defined or
specified under the requirements of IFRS. The Group believes that
these APMs, which are not considered to be a substitute for or
superior to IFRS measures, provide depth and understanding to the
users of the financial statements to allow for further assessment
of the underlying performance of the Group. The Group's primary
results measure, which is considered by the directors of the Group
to represent the underlying and continuing performance of the
Group, is adjusted EBITDA as set out below. EBITDA is a commonly
used measure in which earnings are stated before net finance
income, tax, amortisation and depreciation as a proxy for cash
generated from trading.
The group qualifies for large company R&D tax reliefs with
the RDEC credit included in other operating income above operating
profit and in line with common practice is included in the Group's
calculation of EBITDA.
Six months Six months
ended ended
30 June 30 June
2023 2022
GBP'000 GBP'000
---------------------------- ----------- --------------
Operating profit before
share of associate 1,326 1,708
Share based payment 245 181
Amortisation of intangible
assets that arose from
business combinations 1,080 1,045
Depreciation 1,223 980
Amortisation of other
intangible assets 601 389
Adjusted EBITDA 4,475 4,303
------------------------------- ----------- --------------
3. Tax on profit
Six months Six months
ended ended
30 June 30 June
2023 2022
GBP'000 GBP'000
-------------------------- ----------- --------------
Current taxation
Current period overseas
tax (62) (63)
Adjustments in respect 1 -
of prior periods
(61) (63)
Deferred taxation
Origination and reversal
of timing differences (238) (287)
(238) (287)
-------------------------- ----------- --------------
Tax charge on profit (299) (350)
---------------------------- ----------- --------------
The Finance Act 2021 enacted a UK corporation tax rate of 25%
applying to taxable profits from April 2023 (19% applicable until
March 2023). This has accordingly been applied at 30 June 2023 to
deferred tax balances (2022: to reversals expected to occur after
that date).
3. Tax on profit (continued)
Factors affecting the tax for the period
The tax charge on the profit for the period differs from
applying the standard rate of corporation tax in the UK of 22%
(2022: 19%). The differences are reconciled below:
Six months Six months
ended ended
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------------ ----------- --------------
Profit before taxation 1,521 1,440
-------------------------------------- ----------- --------------
Corporation tax at standard
rate 335 274
Factors affecting charge for
the period:
Disallowable expenses 58 63
Additional capital superdeductions (100) -
Other differences including
higher overseas and deferred
tax rates 6 13
Tax charge on profit 299 350
====================================== =========== ==============
In addition, an RDEC credit of GBP255,000 is included in other
operating income for the period ended 30 June 2023 (2022:
GBP263,000).
4. Earnings per share
Six months Six months
ended ended
30 June 30 June
2023 2022
Profit used in calculating EPS (GBP'000) 1,222 1,090
------------------------------------------- ------------ --------------
Weighted average number of shares for
basic EPS 115,945,956 115,945,956
------------------------------------------- ------------ --------------
Weighted average number of shares for
diluted EPS 116,063,069 117,001,050
------------------------------------------- ------------ --------------
Basic earnings per share (pence) 1.05 0.94
------------------------------------------- ------------ --------------
Diluted earnings per share (pence) 1.05 0.93
------------------------------------------- ------------ --------------
There were 2,709,522 unexercised share options in place at 30
June 2023 (2022: 2,087,935) of which 141,509 (2022: 1,055,755) were
potentially dilutive at their nominal exercise price and are
included in the weighted average for diluted EPS.
5. Intangible fixed assets
Total
Technology business Developed
Customer - business combination technology Overall
Goodwill relationships Brands combinations assets products Software total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- --------- -------------- -------- ------------- ------------ ----------- ---------- --------
Cost
At 1 January
2022 52,778 17,780 2,711 6,422 79,691 2,951 791 83,433
Additions - - - - - 803 17 820
At 30 June
2022 52,778 17,780 2,711 6,422 79,691 3,754 808 84,253
Amortisation
At 1 January
2022 - 3,514 575 2,326 6,415 904 127 7,446
Charge for
the period - 569 90 386 1,045 316 73 1,434
At 30 June
2022 - 4,083 665 2,712 7,460 1,220 200 8,880
Net book
value
-------------- --------- -------------- -------- ------------- ------------ ----------- ---------- --------
At 30 June
2022 52,778 13,697 2,046 3,710 72,231 2,534 608 75,373
=============== ========= ============== ======== ============= ============ =========== ========== ========
Cost
At 1 January
2023 52,778 17,780 2,711 6,422 79,691 4,731 1,091 85,513
Additions - - - - - 1,262 - 1,262
Acquisition
(note 5) 1,513 406 - 283 2,202 - - 2,202
Reclass to
tangible
fixed
assets - - - - - - (246) (246)
At 30 June
2023 54,291 18,186 2,711 6,705 81,893 5,993 845 88,731
--------------- --------- -------------- -------- ------------- ------------ ----------- ---------- --------
Amortisation
At 1 January
2023 - 4,652 756 3,099 8,507 1,664 311 10,482
Charge for
the period - 587 90 403 1,080 530 71 1,681
Reclass to
tangible
fixed
assets - - - - - - (27) (27)
--------------- --------- -------------- -------- ------------- ------------ ----------- ---------- --------
At 30 June
2023 - 5,239 846 3,502 9,587 2,194 355 12,136
--------------- --------- -------------- -------- ------------- ------------ ----------- ---------- --------
Net book
value
-------------- --------- -------------- -------- ------------- ------------ ----------- ---------- --------
At 30 June
2023 54,291 12,947 1,865 3,203 72,306 3,799 490 76,595
=============== ========= ============== ======== ============= ============ =========== ========== ========
Intangible assets have arisen principally on acquisition with a
continuing investment in technology and software.
6. Acquisition of subsidiaries
On 13 March 2023 the company acquired all of the ordinary share
capital of Vita Software Limited. It provides software solutions to
customers in the logistics and retail sectors that are
complementary to the existing Group services.
The acquisition had the following provisional effect on the
Group's assets and liabilities.
Book value Fair value Fair value
GBP'000 adjustments GBP'000
GBP'000
------------------------- ----------- ------------- -----------
Intangible fixed assets - 689 689
Tangible fixed assets 14 - 14
Debtors 94 - 94
Cash 1,120 - 1,120
Creditors (45) - (45)
Corporation tax (86) - (86)
Deferred tax - (176) (176)
----------- ------------- -----------
1,097 513 1,610
Goodwill 1,513
-----------
Consideration payable 3,123
-----------
The cash outflow, net of cash acquired, at the date of
acquisition was GBP1,803,000 with GBP200,000 of deferred
consideration payable in March 2024. The deferred consideration has
not been discounted on the basis of materiality.
The intangible fixed assets acquired are in relation to
technology and customer relationships. Technology acquired is
valued at GBP283,000, valued on a relief from royalty method and
with a deemed useful life of 5 years given the need to upgrade and
continue to develop the software. Customer relationships have been
valued at GBP406,000 using a multi-period excess earnings method
approach, with a useful life of 7 years assumed in line with the
attrition rate.
The trade and assets of Vita Software Limited transferred to
Microlise Limited on 31 May 2023.
In addition to the above cash outflows, the final GBP1,000,000
was paid in the period in respect of the deferred consideration for
TruTac Limited.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR EAENXAADDEAA
(END) Dow Jones Newswires
September 28, 2023 02:00 ET (06:00 GMT)
Microlise (LSE:SAAS)
Historical Stock Chart
From Apr 2024 to May 2024
Microlise (LSE:SAAS)
Historical Stock Chart
From May 2023 to May 2024
