REG - Microlise Group PLC - FY2024 Trading Update

MicroliseAnnouncement

28/01/2025 07:00

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RNS Number : 8633U  Microlise Group PLC  28 January 2025

28 January 2025

Microlise Group plc

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

 

FY2024 Trading Update

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

 

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

 

Highlights

·    Recurring revenue growth of 21.4% to £54.7m, 10.8% organic growth(1)

·    ARR growth of 18.8% to £56.6m, c.9.4% organic growth(1)

·    Group revenue of £81.0m, growth of 12.9%, 5.9% organic growth(1)

·    Adjusted EBITDA(2) of £11.3m, representing margins of 14%

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

 

Trading Update

Microlise delivered a strong performance for the 12 months to 31 December
2024, with adjusted EBITDA(2) and net cash comfortably ahead of market
expectations, achieving significant progress towards our growth objectives of
expanding our international presence, accelerated conversion of new direct
customers in the UK and accretive M&A.

 

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

 

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

 

Overall, revenue is expected to increase by 12.9%
to £81.0m (FY23: £71.7m) with adjusted EBITDA(2) ahead of market
expectations at £11.3m (FY23: £9.4m), reflecting an increase in margin to
14% (FY23: 13.2%).

 

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

 

Customers

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

 

Cyber Security Incident

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

 

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

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

 

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

 

Acquisition

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

 

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

 

Outlook

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

 

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

 

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

 

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

 

Footnotes:

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

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

 

For further information, please contact:

 

 Microlise Group plc
 Nadeem Raza, CEO                                                   C/O SEC Newgate

 Nick Wightman, CFO

 Singer Capital Markets (Nominated Adviser & Broker)
 Steve Pearce / James Moat / Sam Butcher                            Tel: 020 7496 3000
 SEC Newgate (Financial Communications)
 Bob Huxford / Molly Gretton / Harry Handyside                      Microlise@secnewgate.co.uk

 

About Microlise

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

 

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

 

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

 

 

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