Microlise Share Discussion Threads

[theoriginalwonderstuff] 30/1/2024 11:07

Quite probably

[its the oxman] 30/1/2024 09:13

Suspect it could well get tipped again now as well.

[the cronk] 30/1/2024 08:58

Nice update, clear and concise, sadly a rarity in London these days.

I like the low churn rate, and good they included it.

[its the oxman] 30/1/2024 08:51

Nice update. Can see this revisiting 150p level and above now. Prospects looking good going forward.

[wjccghcc] 30/1/2024 08:42

Luckily I did :-)

[theoriginalwonderstuff] 30/1/2024 08:20

I should have filled my boots a couple of weeks ago... D'oh!

[masurenguy] 30/1/2024 07:13

FY2023 Trading Update

Momentum from direct customers returns driving double-digit growth in ARR

Microlise Group provides the following unaudited trading update covering the expected results for the year ending 31 December 2023. The Group expects to publish full year results in early April 2024.

Highlights

· Full year revenue of c.£72m, growth of 13%
· Organic revenue growth1 of 12%
· ARR growth of 11% to £47.2m, of which c.10% represents organic growth
· Adjusted EBITDA2 of c.£9.4m, representing margins of 14%
· Cash conversion above 90% and net cash of £16.8m
· Announced three high quality acquisitions for a maximum consideration of £10.7m

Trading Update

The Board is pleased to confirm that the Group experienced good trading in FY23 with results expected to be ahead of market expectations. Revenue is anticipated to increase by 13% to £71.7m (FY22: £63.2m) with adjusted EBITDA2 growth of 14%, slightly ahead of market expectations3.

On a product level, growth in the period was a result of continued strong demand from OEM customers and increased revenue from direct customers towards the end of the year as an improvement of new vehicle availability in H2 enabled the Company to deliver against its record orderbook. ARR has grown 11% (10% organic) to £47.2m (FY22: £42.6m), contributing to total recurring revenue of £45.0m (FY22: 10.0% and £40.5m). This increase in hardware and installation activity in H2 has also driven a c.17.5% YoY increase in non-recurring revenues.

Net cash at 31 December 2023 was £16.8m (31 December 2022: £16.7m), after net cash spend of £3.0m on acquisitions, including initial consideration of £1.86m for Vita Software, final deferred consideration instalment of £1.0m in relation to the 2020 acquisition of TruTac and £0.14m in relation to the acquisition of K-Safe. This was lower than market expectations, partly due to a delay with several large receipts which have been received in full post period end. The cash conversion rate remained healthy at 91%, lower than FY22 (133%) reflecting this working capital phasing.

Customers

The Group added 450 new customers during the year with key customer wins including McCulla, BCA/ECM, LF&E and two significant customer wins in Australia, further cementing our position in one of our key target markets. Microlise also extended its relationships with numerous existing customers including Tesco, Culina and Bidfood. The Company continues to have high rates of customer retention, experiencing very low churn of 0.7% during the Period, reflecting the strength of our customer relationships and the value our product offering brings to customers.

Acquisition

Microlise announced two acquisitions in 2023 for a total maximum consideration of £10.6m. This included the acquisition of Vita Software, which completed in March 2023, and Enterprise Software Systems (ESS) which completed in January 2024. A third acquisition of K-Safe completed in December 2023, with the announcement in January 2024. The positive impact of these acquisitions is already evident, with successful sales of Vita software's TMS offering and a growing pipeline for the ESS and Flare Aware (K-Safe Product) products amongst our existing customers.

Outlook

Microlise expects to deliver strong revenue growth in FY24, driven by further organic growth and recent M&A. To service a growing pipeline and deliver an improved proposition, the Group has commenced its investment programme into its TMS offering following the acquisitions of Vita Software and ESS as planned. Looking ahead, the Board sees an opportunity for organic growth to improve from current levels as we move through the year supported by a healthy orderbook and pipeline of opportunities across OEM and direct customer divisions. Operating margins are expected to trend upwards in FY24 and beyond, as we focus on careful management of the cost base and efficiently scaling the Group.

Nadeem Raza, CEO, Microlise said: "Trading momentum improved in the second half supported by an increase in delivery to direct customers towards the end of the period and strong uptake from OEM customers. This continues to drive double digit growth in ARR, an increasing base of recurring revenues and good cashflows. The 3 acquisitions during the period have resulted in an improved and expanded offering which is already having a positive effect on trading momentum and pipeline. This, with the resolution of the microchip supply crisis, gives us confidence in the Group's continued success."

[masurenguy] 17/1/2024 14:11

There should be a y/e TU in around a couple of weeks time. Last year one was issued on 31 January.

[wjccghcc] 16/1/2024 14:07

Quite a bit higher. They have an unassailable market position and very little churn. Only issue is short-term investment and supply chain volatility means the numbers are looking pedestrian at the moment.

[theoriginalwonderstuff] 16/1/2024 12:23

Thanks WJCCGHCC! (Would love to know what that stands for)!!What do you think is fair value here?? I bought in and sold fairly soon after flotation.

[wjccghcc] 15/1/2024 10:19

Yes. Been buying sub 100p. Market leader with impressive client retention and now looking at global expansion.

[theoriginalwonderstuff] 15/1/2024 08:57

Is anyone else here??

[theoriginalwonderstuff] 04/1/2024 23:35

Would you buy these pending the trading update at the end of the month..???

[masurenguy] 21/12/2023 10:22

Added a few this morning since there appears to be the onset of some momentum today.

[masurenguy] 21/12/2023 08:57

This is an extremely illiquid share with 98.2% held by 7 institutions and 3 insiders. Liontrust increased their holding by 20% during November but otherwise there has been little share activity here.

At the interims (June 30) sales were up 10.5%, pretax profits were up 5.7% and they had net cash of circa £14m. There should be a Y/E trading update in about 4 weeks time and that will provide an indicator of H2 progress and an outlook view for 2024.

[its the oxman] 20/12/2023 19:41

Totally left behind so far by the xmas rally. Suspect any tiny bit of good news or tip will see it jump. Hoping management are still delivering the goods.

[masurenguy] 30/11/2023 07:10

Acquisition of Enterprise Software Systems (ESS)

Microlise Group is pleased to announce that it has reached an agreement to acquire Enterprise Software Systems (ESS), a leading provider of transportation management system ("TMS") solutions. Founded in 1997 in the UK, ESS has a proven track record as a leading provider of TMS solutions to enterprise clients such as Culina Group and GXO, helping customers manage their transport operations from order receipt to invoice creation. ESS is majority founder-owned, has 42 full-time employees and delivered revenues of approximately £5.1m and an adjusted EBITDA of £1m during the 12 months to 31 August 2023, with net assets of £2.6m. Approximately 75% of revenue is recurring based on long-term contracts with the balance made up of non-recurring set up fees.

Following the Group's Acquisition of Vita Software earlier this year, a leading provider of TMS solutions to smaller and pallet/parcel network customers, the acquisition of ESS strengthens Microlise's TMS offering and introduces a market-leading TMS solution for medium and large fleet customers into the Group's transport technology product offering. Under the terms of the acquisition, Microlise will pay an initial £7.65m cash payment due on completion and a maximum deferred contingent consideration of £0.85m, payable in cash after 6 months from completion and dependent on any claims. The vendors will also receive a further GBP3m from existing ESS cash reserves on completion so that the Company acquires the business on an effective cash and debt free basis. The acquisition is expected to immediately enhance earnings on completion.

The Acquisition remains conditional upon no objections being raised by the UK Competition and Markets Authority ("CMA"). The Board of Microlise expects this process to conclude, and the Acquisition to complete, within 3 months of today's date. Further announcements will be made as appropriate.

Commenting on the acquisition, CEO Nadeem Raza said : "We are delighted to announce ESS as our second acquisition of the year, and our largest to date. The acquisition showcases our commitment to strengthening our TMS offering, which we will now be able to provide to businesses of all sizes. ESS immediately increases our recurring revenues, enhances our earnings, and will provide numerous upsell and cross-sell opportunities. We look forward to updating the market on progress in this respect and on the integration of ESS into the wider Group."

[wjccghcc] 09/11/2023 19:56

I’ve also been accumulating but not quite that many :-)

[masurenguy] 09/11/2023 16:41

Liontrust still accumulating - they've increased their position by circa 15% since the end of October. They now hold 13.65m shares or 11.8%.

[masurenguy] 02/11/2023 16:48

Now at a post IPO low of 97.5p (down 28%) despite a record order book for H2, no debt and circa £14m in net cash. The company will be exhibiting at Solutrans in Lyon later this month. This company is still just on my watchlist but the value equation is becoming more and more attractive !

[theoriginalwonderstuff] 04/10/2023 11:45

Interesting to see that Liontrust hold over 10% of the stock...

[masurenguy] 28/9/2023 08:14

Good progress here during the first half. Future potential looking good but supply chain issues for both the company and its customers has been a headwind. Founder and CEO Nadeem Raza's view is that "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."

Interim Results for the Six Months Ended 30 June 2023

Financial Highlights

-- Sales in H1 increased by 10.5%, from £30.7m in H1 2022 to £33.9m in H1 2023. The 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 £44.8m (H1 FY22: 10.5% and £40.2M).

-- Delays to vehicle deliveries to direct customers, together with the investments made last year in product development, operations, and sales & marketing, impacted EBITDA margin in H1. This increased by 2.6% over the comparative period last year.

-- Pretax profits at £1.5m increased by 5.7% over the same period last year.

-- Net cash at 30 June 2023 was £14.1m (31 December 2022: £16.7m), after net cash spend of £2.86m on acquisitions during the period, including initial consideration of £1.86m for Vita Software and the final deferred consideration instalment of £1.0m in relation to the 2020 acquisition of TruTac.

Operational Highlights

-- More than 250 new customers added during the period.
-- 12 major multi-year renewals signed including Tesco, Bidfood and Pall-ex.
-- Excellent customer retention with churn of just 0.5%.
-- Acquisition of Vita Software for £1.86m 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.

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.

[theoriginalwonderstuff] 28/9/2023 07:44

Any comments re: the results?? Is anyone there??

[theoriginalwonderstuff] 26/9/2023 10:11

Good time to buy?? share price low... Trading update due in two days... Shouldn't really be any surprises...