We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Microlise Group Plc | LSE:SAAS | London | Ordinary Share | GB00BLR8L223 | ORD GBP0.001 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 149.50 | 145.00 | 154.00 | 149.50 | 149.50 | 149.50 | 1,023 | 07:36:15 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Offices-holdng Companies,nec | 71.72M | 1.58M | 0.0136 | 109.93 | 173.34M |
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)
1 Year Microlise Chart |
1 Month Microlise Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions