REG - Maintel Holdings PLC - Interim Results
19/09/2024 07:00
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RNS Number : 7741E Maintel Holdings PLC 19 September 2024
19(th) September 2024
Maintel Holdings Plc
("Maintel", the "Company" or the "Group")
Interim results for the six months to 30 June 2024
Significant profitability improvement and net debt reduction, while underlying
growth accelerates.
Maintel Holdings Plc, a leading provider of cloud and managed communication
services, is pleased to announce its unaudited interim results for the six
months to 30 June 2024.
Key Financial Information
Six months ended Six months ended Increase/ (decrease)
2024 2023
Group revenue (£'m) 46.6 47.5 (1.8)%
Gross profit (£'m) 14.8 16.0 (7.6)%
Adjusted EBITDA( 1 ) (£'m) 4.8 3.7 28.2%
(Loss)before tax (£'m) (0.3) (2.9) (89.7)%
Adjusted profit before tax ( 4 ) (£'m) 3.2 2.0 59.0%
Basic earnings / (loss)per share (p) 0.5 (19.1) -
Adjusted earnings per share ( 2 ) (p) 11.0 2.6 323.0%
Net debt( 3 ) (£'m) 15.6 21.4 (27.1)%
Highlights
· Group revenue was in line with expectations at £46.6m, down 1.8% (H1
2023: £47.5m), with recurring revenue representing 78.7% of total revenue (H1
2023: 75.1%).
· Revenue performance represented underlying growth of 14.3%, which was
slightly down from H1 2023 where revenue was flattered by the late delivery of
£6.7m in sales from 2021 and 2022 orders, delayed due to supply chain
shortages during the pandemic.
· The Group continued to successfully execute its strategic pivot away
from a communications generalist to a specialist, focusing across three key
strategic pillars; Unified Communications & Collaboration, Customer
Experience and Security & Connectivity.
· As announced earlier in the year, the Group won multi-year,
multi-million pound contracts with; a leading housing and care provider; one
of Europe's leading credit management companies; and the Leeds Teaching
Hospital, one of the largest and busiest acute hospital trusts in the UK.
Since this announcement the Group has also won further significant projects in
the period of £1.7m TCV with one of the UK's largest insurance companies, and
£1.3m TCV with a Global IT and business consulting services company, both in
the strategic Customer Experience pillar.
· Gross profit decreased to £14.8m (H1 2023: £16.0m) with gross margin
decreasing to 31.6% (H1 2023: 33.6%), driven by in-bound inflationary pressure
and a change in revenue mix.
· Adjusted EBITDA increased by 28.2% to £4.8m (H1 2023: £3.7m),
reflecting the full run-rate of the benefits from the restructuring programme
completed in 2023 and compounded by a continuing focus on revenue assurance.
Adjusted EBITDA margin increased to 10.2% (H1 2023: 7.8%).
· Basic earnings per share at 0.5p (H1 2023: loss per share at 19.1p),
flows from improved profitability of operations, the reduction in
restructuring costs, and the reduction in amortisation of intangibles, partly
offset by the increase in the interest charge driven by the increase in the
Bank of England base rates.
· Net debt 3 significantly decreased to £15.6m, down 27.1% (H1 2023:
£21.4m) as a result of the cashflow generated from operations of £6.6m (H1
2023: £(1.9)m) supported by improved profitability and well managed working
capital.
Operational highlights
· H1 2024 has been a period of consolidating the operational savings
derived from the organisational and strategic turnaround and restructuring in
2023, whilst investing resources in key growth areas.
· Sales booking performance was strong in H1 2024, boding well for the
full year and a springboard into FY 2025, although the significant deals
referenced above were closed later in the first half than initially
anticipated, leading to an expected H2 2024 weighted revenue and EBITDA
performance.
· New Security & Connectivity services powered by Fortinet &
Zscaler, and a new Cyber Incident Response service were launched to further
enhance the offering in this strategic pillar.
· Launch of the Maintel Application Platform, providing a consistent,
secure, and rapid way to develop, deploy and manage the Group's own software
based Intellectual Property. Audiosafe is the first fully productised app
delivered from the Maintel Application Platform, providing a centralised call
recording archive and playback service, supporting multiple cloud
communication platforms and legacy call recording applications.
· Maintel was nominated for Managed Service Provider of the Year at both
the Comms Business Awards and the CRN Awards.
· Continued progress in cloud and managed services delivered a 2.5%
increase in contracted cloud seats to 185,600 in H1 2024 (H1 2023: 181,000),
whilst cloud recurring revenues grew by 14.0% to £7.9m (H1 2023: £7.0m)
reflecting the Group's intentional move towards quality of earnings over high
seat count, lower margins contracts.
· Following the changes to Board composition earlier in the year, the
Company welcomed Angus McCaffery and Bob Beveridge to the Board, both as
non-executive directors, with Bob also taking the role of Chair of Audit and
Risk. Good progress is also being made in the search for a permanent CEO,
and an experienced independent Chairman.
Commenting on the Group's results, Dan Davies, Interim Chief Executive Officer
said:
"2024 is a critical year in the transformation of Maintel. Whilst the Company
is no longer benefiting from the delayed order backlog caused by the global
semiconductor shortage that bolstered our results in 2023, we instead have the
full benefit of the transformation and restructuring work completed in the
first half of last year. It is now about consolidating, embedding and fine
tuning the transformation, providing a springboard for the future.
"The continued execution of our generalist to specialist strategic pivot has
been extremely encouraging, evidenced by key leading indicators such as; a
high percentage of pipeline and new wins in both our strategic segments and
our target verticals, the increased quality of those new wins in both
technology and margin terms, and increased customer experience scores. These
leading indicators are now beginning to come to fruition. The first half
performance saw underlying revenue growth, significant Adjusted EBITDA growth
and enhanced Adjusted EBITDA margins.
Our enhanced professional and managed service product offering, including the
strategic launch of our new Maintel Application Platform, remains laser
focused on helping our customers embrace, thrive and progress in a digital and
hybrid workplace, improve their customer experience, securely connect their
people to their applications and their data, and protect their business from
the ever-growing cyber threat. The services we provide our customers are vital
to their organisations, their people, their customers and their communities
and we take this responsibility incredibly seriously.
"Customer centricity is fundamental to our strategy, as we strive to make
every experience exceptional. The team have embraced this ethos and I can't
thank them enough for their hard work, diligence and commitment.
"We expect to show further improvement, building on the first half
performance, and I look forward to the remainder of the financial year with
cautious optimism."
Notes
1 Adjusted EBITDA is EBITDA of £3.7m (H1 2023: £1.6m), adjusted for
exceptional items (including one-off restructuring costs) and share based
payments (note 6).
2 Adjusted earnings per share is basic earnings per share of 0.5p (H1 2023:
loss per share of (19.1)p), adjusted for intangibles amortisation, exceptional
items and share based payments (note 5). The weighted average number of shares
in the period was 14.4m (H1 2023: 14.4m).
3 Interest bearing debt (excluding issue costs of debt and IFRS 16 debt)
minus cash.
4 Adjusted profit before tax of £3.2m (H1 2023: 2.0m) is basic (loss)
before tax, adjusted for intangibles amortisation, exceptional items and share
based payments.
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014
For further information please contact:
Maintel Holdings PLC Tel: 0344 871 1122
Dan Davies, Interim Chief Executive Officer
Gab Pirona, Chief Financial Officer
Cavendish (Nomad and Broker) Tel: 020 7220 0500
Jonny Franklin-Adams / Hamish Waller (Corporate Finance)
Sunila de Silva (Corporate Broking)
Hudson Sandler (Financial PR) Tel: 020 7796 4133
Wendy Baker / Nick Moore / Eloise Fleet maintel@hudsonsandler.com (mailto:maintel@hudsonsandler.com)
Notes to editors
Maintel Holdings Plc ("Maintel") is a leading provider of cloud, networking
and security managed communications services to the UK public and private
sectors. Its services aim to help its clients operate at the highest level by
designing, implementing, innovating and managing their vital digital
communication solutions, with a focus across three strategic pillars:
· Unified Communications and Collaboration - Making customers' people more
effective, efficient, and collaborative with UC&C technology. The core
focus of this pillar is the high growth Unified Communications as a Service
(UCaaS) market segment.
· Customer Experience - Helping customers to acquire, delight and retain
their customers using customer experience technology. The core focus of this
pillar is the high growth Contact Centre as a Service (CCaaS) market segment.
· Security & Connectivity - Securely connecting customers' people,
partners and guests to their cloud platforms, applications, and data with
secure connectivity, and protecting their business from cyber threat. The core
focus of this pillar is the high growth Software Defined Wide Area Networking
(SD-WAN), Security Service Edge (SSE) and Cyber Managed Service market
segments.
Maintel combines technology from its strategic, global technology vendor and
carrier partners, with its own Intellectual Property, deployed from and
managed by its own platforms, to provide seamless solutions that its customers
can consume without the need for the internal skillset required to deploy and
manage the technology themselves.
Maintel serves the whole market, with a particular focus on key verticals of
Financial Services, Retail, Public Healthcare, Local Government, Higher
Education, Social Housing and Utilities. Its core market constitutes
organisations with between 250 and 10,000 employees in the private, public and
not-for-profit sectors with headquarters in the UK.
The Company was founded in 1991 and it listed on London's AIM market in 2004
(AIM: MAI).
Business review
Results for the six month period to 30 June 2024
Group revenue was in line with expectations, 1.8% lower, at £46.6m (H1 2023:
£47.5m). Recurring revenue grew by 2.8% from 75.1% to 78.7% of total revenue,
faster than project revenue which was 15.8% lower. Revenue performance
represented underlying growth of 14.3%, as revenue in H1 2023 was flattered by
£6.7m in sales deriving from the late delivery of 2021 and 2022 orders,
delayed due to supply chain shortages during the pandemic.
Our Managed Services and Technology division saw revenue decline by 11.5% to
£21.7m (H1 2023: £24.5m), predominantly due to expected churn and erosion of
heritage on-premise telephony and contact centre contracts, following price
increases on renewals, and on-premise customers transitioning to managed cloud
services. Technology revenues decreased by 15.8% to £9.9m, against a strong
performance in H1 2023 (H1 2023: £11.4m) which was flattered by the project
delivery of orders delayed from 2021 and 2022 as a result of the now resolved
global semiconductor shortage. The £9.9m revenue delivered in H1 2024
represented underlying growth of 63.5%.
Our Network Services Division saw the number of contracted seats on our ICON
and public cloud platforms increase by 2.5% to 185,600. This slowdown in net
seat growth represents both the reality of increased churn that a now matured
technology segment inevitably brings, and a change of focus towards quality of
earnings. The latter has seen the Group pursue fewer high seat count and low
margin opportunities, in favour of higher margin cloud contracts; particularly
in the Customer Experience space where seat numbers are lower, but solutions
are application-rich driving significantly higher ARPUs and margins. This
approach has resulted in continued recurring cloud revenue growth, up 14.0%,
to £7.9m (H1 2023: £7.0m) despite the lower growth in the number of
contracted seats. The margin benefit of this strategy will take time to impact
overall gross margin levels, as new contracts blend with the existing contract
base. The continued revenue benefit from the additional contracted seats and
applications will be realised in 2024 and beyond as these projects continue to
be delivered.
Recurring revenues for Data Connectivity Services increased by 14.9% to
£10.0m (H1 2023: £8.7m), driven by the continued delivery of new SD-WAN and
Security contracts. Data Connectivity Services joins Cloud as the Group's two
key growth areas with the largest win so far this year and continued strong
growth potential.
With regard to cost management, to date the Group has been consolidating the
savings from the business transformation and restructuring in 2023,
particularly in terms of property footprint, support functions and general
overheads. A renewed and continuing vigour around revenue assurance and margin
maximisation has also driven benefits in H1 2024, and this is expected to
continue to benefit H2 2024 and beyond.
Adjusted EBITDA( 1 ) increased by 28.2%. Whilst gross margins have been
impacted due to continued inflationary pressures, these have been mitigated by
last year's organisational restructure and a continued focus on cost control.
This resulted in an improved Adjusted EBITDA margin of 10.2% (H1 2023: 7.8%).
The improved cash conversion, driven by higher cash in-flows from operating
activities of £6.6m, enabled the Group to continue to reduce its financial
debt and deleverage the business, further strengthening its financial
position.
The Group incurred a loss before tax of £0.3m (H1 2023: loss of £2.9m) and
earnings per share of 0.5p (H1 2023: loss per share of 19.1p). This includes a
net exceptional charge of £1m (H1 2023: £1.9m) (refer to note 8) and
intangibles amortisation of £2.4m (H1 2023: £2.8m).
Adjusted earnings per share (EPS) increased by 323.0% to 11.0p (H1 2023: 2.6p)
based on a weighted average number of shares in the period of 14.4m (H1 2023:
14.4m).
Six months
to 30 June 2024 Six months Increase/
to 30 June 2023 (decrease)
£000 £000
Revenue 46,610 47,461 (1.8)%
(Loss) before tax (335) (2,928)
Add back intangibles amortisation 2,442 2,842
Exceptional items (note 8) 1,014 1,946
Share based remuneration 50 124
Adjusted profit before tax 3,171 1,984 59.8%
Interest 997 974
Depreciation 596 757
Adjusted EBITDA( 1 ) 4,764 3,715 28.2%
Profit / (loss) after tax 71 (2,748) -
Basic earnings / (loss) per share 0.5p (19.1)p -
Diluted 0.5p (19.1)p -
Adjusted earnings 1,584 373 324.7%
Adjusted earnings per share( 2 ) 11.0p 2.6p 323.1%
Diluted adjusted earnings per share 10.9p 2.6p 319.2%
Review of operations
Maintel is a Managed Services Provider, with a focus on three, core strategic
technology pillars; Unified Comms & Collaboration, Customer Experience and
Security & Connectivity.
Our vision is to help every organisation thrive through the application of
technology with a human touch. We see technology as the enabler, not the
outcome. Success for us is delivering tangible business benefits for our
customers, whether that be through increasing productivity, velocity, or
collaboration, strengthening their relationships with their own customers,
helping them grow, protecting them from cyber threats, reducing downtime or
saving cost.
We help our customers thrive in many and varied ways. Our exceptional people
apply the human touch to ensure our customer's journey with us is a true
partnership and that we deliver on our promises. This approach allows us to
apply a common blueprint across everything we do, enabling us to cover a
diverse range of technology but with a common and consistent customer
experience.
Elements of cloud services revenues are accounted for in both the managed
services and technology division (under the technology revenue line) and the
network services division.
The following table shows the performance of the three operating segments of
the Group.
Six months to 30 June Six months (Decrease) / increase
2024 to 30 June 2023
Revenue analysis £000 £000
Managed services related 11,736 12,674 (7.4)%
Technology((a)) 9,935 11,801 (15.8)%
Managed services and technology division 21,671 24,475 (11.5)%
Network services division 23,296 20,892 11.5%
Mobile division 1,643 2,094 (21.5)%
46,610 47,461 (1.8)%
Total Group
(a)Technology includes revenues from hardware, software, professional services
and other sales.
Managed services and technology division
The managed services and technology division contains two distinct revenue
lines:
· Managed services: all support and managed service recurring revenues for
hardware and software located on customer premises. This combines both legacy
PBX and Contact Centre systems, which are in a managed decline across the
sector as organisations migrate to more effective and efficient cloud
solutions, with areas of technology such as Local Area Networking (LAN), WIFI
and security, which are still very much current and developing technology
areas and therefore enduring sources of revenue.
· Technology: all non-recurring revenues from hardware, software,
professional and consultancy services and other non-recurring sales.
Services are predominantly provided across the UK, with some customers having
international footprints. The division also supplies and installs
project-based technology, and professional and consultancy services to the
Group's direct clients and through its partner relationships.
Six months to 30 June Six months to 30 June 2023 (Decrease)
2024
£000 £000
Divisional revenue 21,671 24,475 (11.5)%
Divisional gross profit 5,638 6,525 (13.6)%
Gross margin (%) 26.0% 26.7%
Revenue decreased by 11.5% to £21.7m. Revenue from the legacy on-premise
managed service business decreased by £4.4m, in line with the expected churn
in this space, counteracted by new additions within the Group's other higher
growth strategic pillars. Technology revenues declined by 15.8% as revenue in
H1 2023 was boosted by £5.7m due to the unwinding of orders delayed from 2021
and 2022.
Network services division
The Network Services division is made up of three strategic revenue lines:
· Cloud: subscription and managed service revenues from cloud based
Unified Communications and Contact Centre contracts
· Data: subscription, circuit, co-location and managed service
revenues from Wide Area Network (WAN), Software Defined-WAN (SD-WAN), Internet
access and managed security service contracts
· Call traffic and line rental: recurring revenues from both legacy
PSTN voice and modern SIP Trunking contracts
Six months Six months
to 30 June to 30 June 2023
2024 Increase
£000 £000
Call traffic 1,524 1,498 1.7%
Line rental 3,553 3,481 2.1%
Data connectivity services 10,044 8,742 14.9%
Cloud 7,930 6,959 14.0%
Other 245 212 15.6%
23,296 20,892 11.5%
Total division
Division gross profit 8,492 8,437 0.7%
Gross margin (%) 36.5% 40.4%
Network services revenue grew by 11.5%, whilst the gross margin contracted to
36.5% (H1 2023: 40.4%). The revenue growth reflects the positive contribution
of the continued significant growth in cloud subscription revenue, up 14.0%,
and a return to steady growth for data connectivity, up 14.9% (compared with
growth of 7.7% from H1 2022 to H1 2023), driven by the Group's success in
winning and rolling out large Software Defined Wide Area Network (SD-WAN) and
Security managed service contracts since 2021.
Line rental revenue increased by 2.1%, driven by a slowdown in migration away
from the legacy BT based PSTN services, with the deadline for the end of this
service having been extended by 13 months to January 2027, and the continued
growth of the Group's SIP Trunking services. This was bolstered further by an
increase in call traffic revenues, up 1.7%, driven by increased inbound
contact centre calling traffic and outbound SIP call traffic, predominantly
from our strong financial services sector customer base.
Maintel has continued to grow its cloud services across unified communications
and contact centre applications - with 185,600 contracted cloud seats (up 2.5%
on H1 2023). Delivery of the Group's Cloud contracts remained strong, with an
increase in recurring revenue of 14.0% to £7.9m (H1 2023: £7.0m). During H1
2024, the Group closed a number of additional new key contracts for the future
in both the Private and Public cloud spaces. The most significant of these new
contracts are in the Customer Experience space, delivering cloud based contact
centre applications which, despite a lower total seat count, drive
significantly higher ARPUs and margin.
Mobile division
Maintel's mobile division generates revenue primarily from commissions
received as part of its dealer agreement with O2 which scales in line with
growth in partner revenues, in addition to value added services sold alongside
mobile such as mobile fleet management and mobile device management.
Six months Six months
to 30 June 2024 to 30 June
2023 Decrease
£000 £000
Revenue 1,643 2,094 (21.5)%
Gross profit 619 1,002 (38.2)%
Gross margin (%) 37.7% 47.9%
Number of customers 471 536 (12.1)%
Number of connections 28,070 29,890 (6.1)%
Revenue decreased by 21.5% to £1.6m (H1 2023: £2.1m). Gross profit was
£0.6m (H1 2023: £1.0m), and gross margins were lower at 37.7% (H1 2023:
47.9%). The margin reduction was primarily due to fewer bonuses earnt in H1
2024, which resulted from lower new sign-ups, reflecting the refocus of the
Maintel's business development towards our core focus revenue streams, and the
timing of contract renewals.
O2 continues to be the Group's core partner and route to market, bolstered by
its Vodafone agreement and its more recent relationship with Three, which
enhances Maintel's commercial offering as well as increases its ability to
serve customers more effectively and efficiently. Lastly, Maintel's own ICON
Mobilise wholesale offering is ideal for customers who require an agile
solution that caters for unique billing, network, and commercial requirements.
Maintel's mobile go-to-market proposition will continue to focus on the
mid-market and low-end enterprise segments where the Group's portfolio is best
suited, whilst the product remains an adjacent offering to the Company's core
strategic pillars.
Administrative expenses
Administrative expenses mainly comprise costs related to the sales and
marketing teams, the support functions and the managerial positions, as well
as the associated growth generated by investments and general costs. On a
comparable basis, the total other administrative expenses, excluding
depreciation, amounted to £10.5m (H1 2023: £12.6m) and represented a net
£2.1m, amounting to a 16.7% reduction in overheads.
The overall headcount dropped by 2.7% or 13 FTEs and now stands at 452 (H1
2023: 465) as a result of the Group's programme of re-adapting to a scalable,
efficient business to facilitate our transition to a communications
specialist.
Cash flow
The Group's net debt (excluding IFRS 16 liabilities and issue costs of debt)
was £15.6m at 30 June 2024, compared with £18.2m net debt at 31 December
2023.
Six months to 30 June Six months
2024 to 30 June 2023
£000 £000
Cash generated / (used in) operating activities 6,606 (1,898)
Capital expenditure (2,790) (1,195)
Finance cost (net) (705) (849)
Issue costs of debt (30) -
Free cashflow 3,081 (3,942)
Proceeds from borrowings - 2,500
Repayment of borrowings (1,200) (1,200)
Lease liability repayments (470) (644)
Increase / (decrease) in cash and cash equivalents 1,411 (3,286)
Cash and cash equivalents at start of period 4,846 6,136
Exchange differences (7) (24)
Cash and cash equivalents at end of period 6,250 2,826
Bank borrowings (21,800) (24,200)
Net debt excluding issue costs of debt (15,550) (21,374)
Adjusted EBITDA (note 6) 4,764 3,715
The Group generated £6.6m of cash from operating activities (H1 2023: cash
used was £1.9m).
Capital expenditure was £2.8m (H1 2023: £1.2m), driven by our continued
investment across Maintel's product and service portfolio and delivery
platforms.
No tax was paid in the first half of the financial year.
Dividends
In line with previous periods, the Board has decided to continue to pause
dividend payments. As such, the Board will not declare an interim dividend for
2024 (H1 2023: Nil).
Although the Board remains focused on the reduction of the Group's debt and
does not feel it is timely to resume dividend payments, this will be kept
under review as conditions further improve.
The Board
The Group was pleased to announce the appointment to the Board of Maintel of
Bob Beveridge and Angus McCaffery on 3 July 2024.
Bob Beveridge was appointed an independent non-executive director and he
chairs the Group's Audit and Risk Committee. Bob has considerable experience
as a financial and strategic leader of blue-chip companies, including Cable
and Wireless Communications plc and Marlborough Stirling plc. He is currently
a non-executive director of Inspiration Healthcare Group plc and chair of
Berkshire Local Enterprise Partnership Limited.
Angus McCaffery, co-founder of Maintel, was appointed a non-executive director
and he joined the Nomination Committee. Angus was previously an executive
director of the Company until December 2020.
Outlook
As previously announced, a number of high value new contract wins, secured
during the first half, were closed later in H1 2024 than first anticipated.
Subsequently, the Group expects its FY 2024 performance will be second half
weighted as the benefit of those new multi-year contracts are realised from H2
2024.
As a result, the Board expects H2 2024 trading to show further improvement
building on the first half performance. The Group remains focused on
delivering higher margin new business opportunities in its high growth
segments moving forward and looks forward to the remainder of the financial
year with cautious optimism.
On behalf of the Board
Dan Davies
Interim Chief Executive Officer
19 September 2024
Maintel Holdings Plc
Consolidated statement of comprehensive income (unaudited)
for the 6 months ended 30 June 2024
Six months Six months
to 30 June to 30 June
2024 2023
Note £000 £000
(Unaudited) (Unaudited)
Revenue 3 46,610 47,461
Cost of sales (31,861) (31,497)
Gross profit 14,749 15,964
Other operating income 4 476 339
Administrative expenses
Intangibles amortisation (2,442) (2,842)
Exceptional items 8 (1,014) (1,946)
Share based payments (50) (124)
Other administrative expenses (11,057) (13,345)
(14,563) (18,257)
Operating profit / (loss) 662 (1,954)
Net financing costs (997) (974)
(Loss) before taxation (335) (2,928)
Taxation credit 406 180
Profit / (loss) for the period and attributable to owners of the parent 71 (2,748)
Other comprehensive income for the period
Exchange differences on translation of foreign operations - (20)
Total comprehensive income / (loss) for the period attributable to the owners of the parent 71 (2,768)
Earnings / (loss) per share from continuing operations attributable to the
ordinary equity holders of the parent
Basic 5 0.5p (19.1)p
Diluted 5 0.5p (19.1)p
Maintel Holdings Plc
Consolidated statement of financial position (unaudited)
at 30 June 2024
30 June 31 December
2024 2023
Note £000 £000
(Unaudited) (Audited)
Non-current assets
Intangible assets 48,650 48,644
Right-of-use assets 540 1,036
Property, plant and equipment 1,104 1,109
Deferred tax 878 471
51,172 51,260
Current assets
Inventories 809 1,677
Trade and other receivables 25,257 25,408
Cash and cash equivalents 6,250 4,846
32,316 31,931
Total assets 83,488 83,191
Current liabilities
Trade and other payables 46,148 43,938
Lease liabilities 660 909
Borrowings 9 1,725 2,322
Total current liabilities 48,533 47,169
Non-current liabilities
Other payables 409 502
Lease liabilities 230 731
Borrowings 9 19,985 20,579
Total non-current liabilities 20,624 21,812
Total liabilities 69,157 68,981
Total net assets 14,331 14,210
Equity
Issued share capital 144 144
Share premium 24,588 24,588
Other reserves 64 64
Retained earnings (10,465) (10,586)
Total equity 14,331 14,210
Maintel Holdings Plc
Consolidated statement of changes in equity (unaudited)
for the six months ended 30 June 2024
Share capital
Other reserves Retained earnings
Share premium
Total
Note £000 £000 £000 £000 £000
At 31 December 2022 144 24,588 80 (5,424) 19,388
Loss for the period - - - (2,748) (2,748)
Other comprehensive income: - - - - -
Foreign currency
translation differences - - (20) - (20)
Total comprehensive (loss) for the period - - (20) (2,748) (2,768)
Share based payments - - - 124 124
At 30 June 2023 144 24,588 60 (8,048) 16,744
(Loss) for the period - - - (2,603) (2,603)
Other comprehensive income: - - - - -
Foreign currency
Translation differences - - 4 - 4
Total comprehensive loss for the period - - 4 (2,603) (2,599)
Share based payments - - - 65 65
At 31 December 2023 144 24,588 64 (10,586) 14,210
Profit for the period - - - 71 71
Other comprehensive income: - - - - -
Foreign currency
translation differences - - - - -
Total comprehensive income for the period - - - 71 71
Share based payments - - - 50 50
At 30 June 2024 144 24,588 64 (10,465) 14,331
Maintel Holdings Plc
Consolidated statement of cash flows (unaudited)
for the six months ended 30 June 2024
Six months Six months
to 30 June 2024 to 30 June
2023
£000 £000
Operating activities
(Loss)before taxation (335) (2,928)
Adjustments for:
Intangibles amortisation 2,442 2,842
Share based payment charge 50 124
Depreciation of plant and equipment 348 314
Depreciation of right of use asset 248 443
Interest expense (net) 997 974
Operating cash flows before changes in working capital 3,750 1,769
Decrease / (increase)in inventories 868 (529)
Decrease / (increase)in trade and other receivables 150 (4,045)
Increase in trade and other payables 1,838 907
Cash generated from / (used in) operating activities 6,606 (1,898)
Investing activities
Purchase of plant and equipment (342) (75)
Purchase of software intangible assets (2,448) (1,120)
Net cash flows used in investing activities (2,790) (1,195)
Maintel Holdings Plc
Consolidated statement of cash flows (continued) (unaudited)
for the 6 months ended 30 June 2024
Six months Six months
to 30 June 2024 to 30 June 2023
£000 £000
Financing activities
Proceeds from borrowings - 2,500
Repayment of borrowings (1,200) (1,200)
Lease liability repayments (470) (644)
Interest paid (705) (849)
Issue costs of debt (30) -
Net cash flows generated from financing activities (2,405) (193)
Net increase / (decrease) in cash and cash equivalents 1,411 (3,286)
Cash and cash equivalents at start of period 4,846 6,136
Exchange differences (7) (24)
Cash and cash equivalents at end of period 6,250 2,826
Maintel Holdings Plc
Notes to the interim financial information
1. General information
Maintel Holdings Plc is a public company limited by shares and is incorporated
and domiciled in the UK, England. Its shares are publicly traded on the
Alternative Investment Market (AIM). Its registered office and principal place
of business is 160 Blackfriars Road, London SE1 8EZ. Its registered company
number is 03181729.
2. Basis of preparation
The financial information in these unaudited interim results is that of the
holding company and all its subsidiaries (the Group). The financial
information for the half-years ended 30 June 2024 and 30 June 2023 does not
comprise statutory financial information within the meaning of s434 of the
Companies Act 2006 and is unaudited. It has been prepared in accordance with
the recognition and measurement requirements of UK adopted International
Accounting Standards (IAS) but does not include all the disclosures that would
be required under IAS. The accounting policies adopted in the interim
financial statements are consistent with those adopted in the last annual
report for financial year 2023 and those applicable for the year ended 31
December 2024.
3. Segmental information
For management reporting purposes and operationally, the Group consists of
three business segments: (i) telecommunications managed service and technology
sales, (ii) telecommunications network services, and (iii) mobile services.
Each segment applies its respective resources across inter-related revenue
streams which are reviewed by management collectively under these headings.
The businesses of each segment and a further analysis of revenue are
described under their respective headings in the business review.
The chief operating decision maker has been identified as the Board, which
assesses the performance of the operating segments based on revenue and gross
profit.
Six months to 30 June 2024 (unaudited)
Managed service and technology
Network services Total
Mobile
£000 £000 £000 £000
Revenue 21,671 23,296 1,643 46,610
Gross profit 5,638 8,492 619 14,749
Other operating income 476
Other administrative expenses (11,057)
Share based payments (50)
Intangibles amortisation (2,442)
Exceptional items (1,014)
Operating profit 662
Interest (net) (997)
(Loss) before taxation (335)
Income tax credit 406
Profit after taxation 71
Further analysis of revenue streams is shown in the business review.
The Board does not regularly review the aggregate assets and liabilities of
its segments and accordingly, an analysis of these is not provided.
Managed service and technology Network services Central/
Mobile inter-
company Total
£000 £000 £000 £000 £000
Intangibles amortisation - - - 2,442 2,442
Exceptional items 114 39 - 861 1,014
Six months to 30 June 2023 (unaudited)
Managed service and technology
Network services Total
Mobile
£000 £000 £000 £000
Revenue 24,475 20,892 2,094 47,461
Gross profit 6,525 8,437 1,002 15,964
Other operating income 339
Other administrative expenses (13,345)
Share based payments (124)
Intangibles amortisation (2,842)
Exceptional items (1,946)
Operating (loss) (1,954)
Interest (net) (974)
(Loss) before taxation (2,928)
Income tax credit 180
(Loss) after taxation (2,748)
Further analysis of revenue streams is shown in the business review.
The Board does not regularly review the aggregate assets and liabilities of
its segments and accordingly, an analysis of these is not provided.
Managed service and technology Network services Central/
Mobile inter-
company Total
£000 £000 £000 £000 £000
Intangibles amortisation - - - 2,842 2,842
Exceptional items - - - 1,946 1,946
4. Other operating income
Six months Six months
to 30 June 2024 to 30 June
2023
£000 £000
(unaudited) (unaudited)
476 339
Other operating income
Other operating income of £0.5m in the period relates primarily to monies
associated with the recovery of research and development expenditure credits
(H1 2023: £0.3m).
5. Earnings per share
Earnings per share and adjusted earnings per share is calculated by dividing
the (loss) / profit after tax for the period by the weighted average number of
shares in issue for the period. These figures have been prepared as follows:
Six months Six months
to 30 June 2024 to 30 June 2023
£000 £000
(unaudited) (unaudited)
Earnings used in basic and diluted EPS, being profit / (loss) after tax 71 (2,748)
Adjustments: 1,438 1,893
Amortisation of intangibles on business combinations
Exceptional items (note 8) 1,014 1,946
Tax relating to above adjustments (601) (842)
Share based payments 50 124
Tax adjustments relating to prior years (388) -
1,584 373
Adjusted earnings used in adjusted EPS
The adjustments above have been made to provide a clearer picture of the
trading performance of the Group.
Six months to 30 June Six months
2024 to 30 June 2023
Number 000 Number 000
Weighted average number of ordinary shares of 1p each 14,362 14,362
Potentially dilutive shares 180 -
14,542 14,362
Earnings / (loss) per share
Basic 0.5p (19.1)p
Diluted 0.5p (19.1)p
Adjusted - basic after the adjustments in the table above 11.0p 2.6p
Adjusted - diluted after the adjustments in the table above 10.9p 2.6p
In calculating adjusted diluted earnings per share, the weighted average
number of ordinary shares in issue is adjusted to assume conversion of all
potentially dilutive ordinary shares. The Group has one category of
potentially dilutive ordinary share, being those share options granted to
employees where the exercise price is less than the average price of the
Company's ordinary shares during the period.
6. Earnings before interest, tax, depreciation and amortisation (EBITDA)
The following table shows the calculation of EBITDA and adjusted EBITDA:
Six months Six months
to 30 June 2024 to 30 June 2023
£000 £000
(unaudited) (unaudited)
(335) (2,928)
(Loss) before tax
Net interest payable 997 974
Depreciation of property, plant and equipment 348 314
Depreciation of right of use asset 248 443
Amortisation of intangibles 2,442 2,842
EBITDA 3,700 1,645
Share based payments 50 124
Exceptional items (note 8) 1,014 1,946
Adjusted EBITDA 4,764 3,715
7. Dividends
The directors have decided not to declare an interim dividend for 2024 (2023:
nil).
8. Exceptional items
Six months Six months
to 30 June 2024 to 30 June 2023
£000 £000
(unaudited) (unaudited)
Staff restructuring and other employee related costs 300 965
Costs relating to business transformation 712 606
Fees relating to revised credit facilities agreement 2 375
1,014 1,946
9. Borrowings
30 June 31 December
2024 2023
£000 £000
(unaudited) (audited)
Current bank loan - secured 1,725 2,322
Non-current bank loan secured 19,985 20,579
21,710 22,901
In 2022 the Company signed a new agreement with HSBC Bank plc ("HSBC") to
replace the previous facility and has been extended to 30 September 2025 in
March 2024. The new facility with HSBC consists of a revolving credit
facility ("RCF") of £20m with a £6m term loan on a reducing basis. The
term loan is being repaid in equal monthly instalments, starting in October
2022. The principal balance of the term loan at 30 June 2024 was £1.8m and of
the RCF was £20.0m.
Interest on the borrowings is the aggregate of the applicable margin and SONIA
for Pound Sterling / SOFR for US Dollar / EURIBOR for Euros.
Covenants based on EBITDA to Net Finance Charges and Total Net Debt to EBITDA
are tested on a quarterly basis.
The current bank borrowings above are stated net of unamortised issue costs of
debt of £0.1m (31 December 2023: £0.1m).
The facilities are secured by a fixed and floating charge over the assets of
the Company and its subsidiaries. Interest is payable on amounts drawn on the
revolving credit facility and loan facility at a covenant-depending tiered
rate of 2.60 % to 3.25% per annum over SONIA, with a reduced rate payable on
the undrawn facility.
The Directors consider that there is no material difference between the book
value and fair value of the loan.
10. Post balance sheet events
There have been no events subsequent to the reporting date which would have a
material impact on the interim financial results.
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