SAAS Microlise Group Plc

28 January 2025

Microlise Group plc

("Microlise", "the Group" or "the Company")

FY2024 Trading Update

Strong International Growth, Robust Recurring Revenue, and Resilient Performance Despite Challenges in FY24

Microlise Group plc (AIM: SAAS), a leading provider of transport management software to fleet operators, provides an update on trading for the year ending 31 December 2024 ("FY24"). The Group expects to publish its full year results in late March.

Highlights

·    Recurring revenue growth of 21.4% to £54.7m, 10.8% organic growth¹

·    ARR growth of 18.8% to £56.6m, c.9.4% organic growth¹

·    Group revenue of £81.0m, growth of 12.9%, 5.9% organic growth¹

·    Adjusted EBITDA² of £11.3m, representing margins of 14%

·    Cash conversion above 89% and net cash of £11.4m

Trading Update

Microlise delivered a strong performance for the 12 months to 31 December 2024, with adjusted EBITDA² and net cash comfortably ahead of market expectations, achieving significant progress towards our growth objectives of expanding our international presence, accelerated conversion of new direct customers in the UK and accretive M&A.

FY24 marked a year of international growth for the Company. New direct customers were secured in Australia, New Zealand and France further establishing the Company's expanding positions in those markets. This was supported by strong conversion, both of new direct customers and upsell of additional products into existing customers, in the UK. As a result, recurring revenue grew 21.4% to £54.7m (FY23: £45.0m), of which 10.8% was organic, and ARR increased by 18.8% (9.4% organic growth) to £56.6m (FY23: £47.7m).

Non-recurring revenues decreased by 1.4% to £26.3m (FY23: £26.7m), primarily due to a slowdown in OEM sales in H2, which is expected to be back to normal levels in 2025. This was partly offset by higher direct customer sales, driven by new customer wins and the resolution of localised vehicle availability constraints in Australia.  

Overall, revenue is expected to increase by 12.9% to £81.0m (FY23: £71.7m) with adjusted EBITDA² ahead of market expectations at £11.3m (FY23: £9.4m), reflecting an increase in margin to 14% (FY23: 13.2%).

The Group's net cash as of 31 December 2024 was £11.4m (31 December 2023: £16.8m) reflecting the acquisitions of Vita Software and K-Safe earlier in FY24. The Group's cash conversion rate remained healthy at 89%, broadly in line with FY23 (91%).

Customers

The Group added 375 new customers in FY24, including WooliesX in Australia, GSF in the UK, Foodstuffs South Island in New Zealand and STAF in France, further cementing its position in key international markets. Microlise also renewed key relationships, including a five-year extension with JCB, building further upon its 14-year relationship with Microlise. Customer retention remained strong, with very low churn of 0.7%, highlighting the value of its offerings and strong customer relationships.

Cyber Security Incident

On 31 October 2024, the Group announced that it had experienced a cyber security incident involving unauthorised activity detected on the Microlise network. The Group immediately took a number of actions to limit the impact of this incident enabling the Group to minimise disruption and fully restore its network and services within 2.5 weeks. Importantly, thanks to its historic investment in enhanced security measures surrounding customer data, the Group was able to ensure that no customer systems data was compromised during the incident.

Since the Group's network and services have been restored, the Group has continued to win 51 new customers from its pipeline and has not lost any existing customers following the incident.  As such the Group expects to report Adjusted EBITDA of £11.3m, slightly ahead of market expectations.

The Group continues to assess the exceptional costs associated with the incident and has made a claim for these costs in full, against its cyber security insurance.

The Board would like to sincerely thank its customers for their understanding and patience during this period.

Acquisition

Microlise announced the acquisition of K-Safe on 9 January 2024, and the completion of the acquisition of Enterprise Software Systems (ESS) on 11 January 2024.

Both acquisitions have served to strengthen Microlise's offering and provide a wider range of services to new and existing customers, with several new contracts having been won in 2025 as a consequence.

Outlook

Microlise has maintained its strong track record of year-on-year growth and expects to report FY24 adjusted EBITDA ahead of market expectations. The Board is positive about the Company's prospects for FY25. The business pipeline has continued to grow since the cyber incident, positioning the Company well, particularly in the international markets where it gained strong traction during FY24.

Nadeem Raza, CEO, Microlise said: "The business demonstrated growth across all geographies, and the addition of newly acquired products enabled us to provide more solutions to existing customers. We have signed several new TMS contracts, following the acquisition of ESS at the start of the year, which is particularly pleasing.

The business responded well to the cyber incident in October, resulting in minimal impact to the forecast FY24. I would like to thank all our staff for their hard work and dedication in restoring services for our customers, and our customers for their patience and understanding during this period.

The outturn for 2024 shows a strong business with a healthy pipeline and puts us in a great position to take advantage of opportunities in 2025."

Footnotes:

¹ Organic growth is calculated by applying the Group's actual performance in the respective period and excluding acquired and disposed/discontinued business.

² Adjusted Earnings Before interest, tax, depreciation, amortisation, share based payments and exceptional costs relating to acquisition and restructuring costs and expenses related to the cyber security incident

For further information, please contact:

About Microlise

Microlise Group Plc is a leading provider of transport management software to fleet operators helping them to improve efficiency, safety, and reduce emissions. These improvements are delivered through reduced fuel use, reduced mileage travelled, improved driver performance, fewer accidents, elimination of paperwork and delivery of an enhanced customer experience.

Established in 1982, Microlise is an award-winning business with over 400 enterprise clients. With 463 employees based at the Group's headquarters in Nottingham in the UK, the Company also has offices in France, Australia, and India, with a total global staff base of over 800. 

Microlise is listed on the AIM market of the London Stock Exchange (AIM: SAAS) and qualifies for the London Stock Exchange's Green Economy Mark.