REG - Microlise Group PLC - Results for the year ended 31 December 2025
Today 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260514:nRSN2369Ea&default-theme=true
RNS Number : 2369E Microlise Group PLC 14 May 2026
14 May 2026
Microlise Group plc
("Microlise", "the Group" or "the Company")
Results for the year ended 31 December 2025
Strong direct customer growth and continued cash generation
Microlise Group plc (AIM: SAAS), a leading provider of transport management
software to fleet operators, announces its audited results for
the twelve months ended 31 December 2025 ("FY25" or the "Period").
To provide a clearer view of underlying business performance, the Group has
detailed the below Alternative Performance Measures (APMs) and Statutory
Measures:
FY25 FY24 Change
APMs Adjusted Revenue ((1)) £84.0m £81.0m 4%
Adjusted Recurring Revenue ((1)) £58.8m £54.7m 8%
Annual Recurring Revenue (ARR) ((6)) £59.2m £56.6m 5%
Adjusted EBITDA ((2)) £8.3m £11.3m (27%)
Adjusted Profit before Tax ((3)) £2.7m £6.5m (59%)
Adjusted EPS (p) ((4)) 1.72p 4.19p (59%)
Adjusted Cash Flow Generated from Operations ((5)) £13.3m £10.3m 29%
Statutory Measures Revenue £84.0m £79.5m 6%
Recurring Revenue £58.8m £53.1m 11%
Operating Loss £(2.4)m £(2.3)m (4%)
Loss before Tax £(2.5)m £(2.3)m (9%)
Basic EPS (p) (1.87)p (1.77)p (5%)
Cash and cash equivalents £16.7m £11.4m 47%
(1. Adjusted Revenue and Adjusted Recurring Revenue exclude
revenue reversals relating to the cyber security incident, which are expected
to be fully covered by insurance.)
(2. Adjusted EBITDA excludes exceptional income and costs in
relation to acquisitions, restructuring and the cyber incident, depreciation,
amortisation, share of loss of associate, loss on disposal of interest in
associate, interest, tax and share based payments.)
(3. Adjusted Profit before Tax excludes amortisation on business
combinations, share based payments, share of loss of associate, loss on
disposal of interest in associate and exceptional income and costs in relation
to the cyber incident, acquisitions, and restructuring costs.)
(4. Adjusted EPS and Adjusted Profit after Tax excludes
amortisation on business combinations, share based payments, share of loss of
associate, loss on disposal of interest in associate, exceptional income and
costs in relation to the cyber incident, acquisitions, and restructuring costs
and the associated tax effect of the above excluded items.)
(5. Adjusted cash flow generated from operations adds back
exceptional cash flows in relation to restructuring.)
(6. Annual Recurring Revenue (ARR) is calculated by multiplying
the December 2025 monthly recurring revenue by 12.)
(7. Net Revenue Retention (NRR) represents the change in recurring
revenue from existing customers over a 12 month period, after reflecting
expansions, contractions and churn, excluding new customer wins.)
(8. ) (For the purposes of this announcement, the Group understands
that market consensus for FY25 is for revenue of approximately £84 million
and adjusted EBITDA of approximately £8.3 million. For FY26, the Group
understands that market consensus is for revenue in the range of £87.2
million to £87.5 million and adjusted EBITDA in the range of £11.2 million
to £12.0 million as at 13 May 2026.)
( )
( )
Financial Highlights
· Adjusted Revenue(1) increased 3.7% to £84.0m (FY24: £81.0m), in
line with revised market expectations(8), driven by strong expansion across
direct customers in all core geographies, offset by lower OEM volumes and the
delay of a small number of direct customer contract wins into FY26.
· Adjusted EBITDA(2) of £8.3m (FY24: £11.3m), with margin of 9.9%
(FY24: 14.0%) reflecting revenue headwinds.
· Adjusted Profit before Tax(3) of £2.7m (FY24: £6.5m), partly
driven by reduced operating profit and increased amortisation reflecting
continued investment in technology development including rollout of the
Microlise One platform.
· Adjusted EPS(4) of 1.72p (FY24: 4.19p).
· Strong cash generation with adjusted operating cash flow(5) of
£13.3m (FY24: £10.3m), and a robust balance sheet with £16.7m of cash
(FY24: £11.4m) and a £30m undrawn debt facility, consisting of a £10m
committed revolving cash flow facility and a £20m accordion with HSBC.
· Dividends of £2.1m paid (FY24: £2.7m), with a proposed final
dividend of 1.30p (FY24: 1.24p), in line with the Board's progressive dividend
policy.
Operational Highlights
· Group Annual Recurring Revenue (ARR)(6) increased to £59.2m
(FY24: £56.6m) reflecting our high quality subscription-based recurring
revenue model.
· ARR(6) for direct customers increased 12.1% (FY24: 18.3%) to
£44.2m (FY24: £39.4m) driven by a record order intake including commercial
momentum in the Australian and French markets. The year-on-year movement was
partly due to managed churn of smaller customers acquired from recent
acquisitions, which is not expected to repeat in 2026 together with reduced
OEM activity.
· Net Revenue Retention (NRR)(7) for direct customers was 108%
(FY24: 113%), driven by continued low churn of 1.4% (FY24: 0.7%) and good
expansion across existing customers through increasing adoption of
higher-value modules, supporting long-term revenue visibility and profit
margin expansion.
· £5m of annualised cost savings delivered through restructuring
at the end of FY25, supporting future margin expansion.417 new customers added
(FY24: 375) across core markets.
· Expansion of Microlise One platform, including API integrations
with vehicle refrigeration.
Current Trading & Outlook
· Trading in the first quarter of FY26 is in line with the Board's
expectations, supported by continued expansion within existing enterprise
customers including increasing adoption of our TMS module together with an
expanded pipeline.
· We continue to expect FY26 revenues from OEM customers to be
below FY25.
· Following the appointment of a new CTO in FY25 and review of the
Company's product roadmap, the Board has decided to accelerate investment in
the Group's products, infrastructure and go-to-market team to capitalise on
growing demand from direct customers.
· The investment programme will include updating the architecture
of our cloud platform, product investment to accelerate both the
implementation of the TMS module and the Group's mid-market offering. Sales
headcount will also increase to support expected growth across target
customers in all core geographies.
· As a result of the above investment and a challenging market
environment we expect FY26 revenues to be slightly below current market
expectations and adjusted EBITDA to be at the lower end of current market
expectations.(8)
Nadeem Raza, CEO, Microlise said:
"Against a tough market backdrop Microlise delivered a resilient performance
in FY25, with continued revenue growth and strong momentum in our direct
customer business, despite a more mixed trading environment and weaker OEM
demand. This reflects the strength of our strategy, the quality of our
customer relationships and the increasing relevance of our solutions in
supporting operational efficiency across the transport sector.
During the year, we took decisive action to improve the efficiency of the
business, completing a targeted restructuring programme with £5 million of
annualised cost savings realised in Q4.
Trading in the first quarter of FY26 is in line with the Board's expectations,
against a more complex operating environment, including ongoing supply chain
disruptions linked to geopolitical tensions in the Middle East and emerging
cost pressures associated with shortage of electronic components, in
particular memory devices.
Looking ahead, 2026 will be an important investment year for Microlise as we
deliberately allocate capital behind the areas of the business where we see
the strongest long-term growth opportunity. This includes investment in our
cloud infrastructure, product roadmap, TMS capability, mid-market proposition
and go-to-market teams across our core geographies. The Board believes this
will deliver the right balance between accelerating long term organic growth,
expanding scalable and higher margin recurring revenues combined with profit
margin expansion through enhanced operational efficiencies and revenue mix
improvement accretive to margins. These actions are a clear reflection of our
direction of travel: to build a more scalable, higher-quality and
higher-margin business, with the benefits of this investment expected to
support growth in 2027 and beyond."
For further information, please contact:
Microlise Group plc
Nadeem Raza,
CEO
C/O SEC Newgate
Nick Wightman, CFO
Canaccord Genuity Limited (Nominated Adviser & Broker)
Simon Bridges / Harry Gooden / Andrew Potts / Elizabeth
Halley-Stott Tel: +44 (0) 20 7523 8000
SEC Newgate (Financial Communications)
Bob Huxford / Harry Handyside / Rhea Xigaki
Microlise@secnewgate.co.uk
About Microlise
Microlise Group Plc is a leading provider of transport and fleet technology to
transport and logistic 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 2,500
clients, and a global workforce of 730 across the Group's headquarters in
Nottingham in the UK, and offices in France, Australia, and India.
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.
Inside Information: This announcement contains inside information for the
purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms
part of domestic law by virtue of the European Union (Withdrawal) Act 2018.
Upon the publication of this announcement via Regulatory Information Service,
this inside information is now considered to be in the public domain.
Chairman's Statement
2025 has been a year of significant operational progress for Microlise, during
which we undertook a successful restructuring that has resulted in a more
efficient organisation, better positioned to deliver long-term sustainable
growth in revenue and earnings.
Adjusted revenue increased by 3.7% to £84.0m (FY2024: £81.0m). Annual
Recurring Revenue (ARR) grew by 4.6% to £59.2m (FY2024: £56.6m). The
Adjusted Revenue was below previous expectations due to lower OEM volumes and
delayed direct customer projects. Adjusted recurring revenue increased by
7.6% to £58.8m (FY2024: £54.7m), supported by 16% recurring revenue growth
from direct customers.
Adjusted EBITDA was £8.3m (FY2024: £11.3m), representing a margin of 10%
(FY2024: 14%), reflecting the impact of lower OEM volumes, the timing of
certain customer deployments, and continued investment in the business.
The Group ended the year with cash and cash equivalents of £16.7m (FY2024:
£11.4m), reflecting strong cash generation and disciplined working capital
management.
Operationally, the year has been characterised by focus and decisive action.
The restructuring programme implemented at the end of 2025 has delivered a
leaner and more flexible organisation, with a clearer emphasis on execution
and delivery. Cost savings were mostly focussed on operations rather than our
go to market teams, and resulted in a headcount reduction of over 100 FTEs.
These actions are expected to deliver c.£5m of annualised cost savings,
supporting future margin improvement.
We have also strengthened our leadership team. Dean Garvey-North joined the
Group in November 2025 and, following a transition period with Duncan
McCreadie, assumed full responsibility as Chief Technology Officer from 1
January 2026.
Strategically, strong progress continues across our international markets,
particularly in Australia and New Zealand, where we are seeing encouraging
growth in key sectors including food and chilled logistics. We are also
gaining traction within smaller fleet segments, supported by our digital sales
capabilities and increasingly accessible product offering.
Looking ahead, the Group's most significant opportunities remain in its direct
customer business and across international markets. We are accelerating our
investment in product, infrastructure and the go-to-market team to support
future growth, while maintaining a disciplined approach to costs and capital
allocation.
On behalf of the Board, I would like to thank our customers for their
continued trust, our employees for their commitment and innovation, and our
shareholders for their ongoing support.
CEO's Statement
Introduction
Microlise made solid strategic progress during the year under review,
strengthening the foundations of the Group while navigating a more mixed
trading environment. The restructuring actions undertaken towards the end of
the year have materially improved efficiency and are expected to deliver
c.£5m of annualised cost savings from 2026 onwards. As a result, the Group is
now a more agile and focused organisation, well positioned to deliver higher
quality, higher margin growth.
While OEM-related demand was weaker than anticipated during 2025, we are
beginning to see signs of stabilisation. We remain appropriately cautious and
currently still expect OEM revenues in 2026 to be lower than 2025 levels.
A number of direct customer projects were delayed during 2025 due to
cyber-related incidents impacting clients. These projects are now progressing,
and we expect the associated revenues to be recognised in the 2026 financial
year.
Notwithstanding these project delays, our direct-to-customer business
performed strongly, delivering 16% growth in recurring revenue. This growth
was broad-based across all geographies and reflects continued demand for our
solutions, as well as the increasing depth of our customer relationships.
Customers are also adopting a wider range of our products, supported by the
continued development of the Microlise One platform. This has improved the
accessibility of our solutions and driven momentum in cross-sell and upsell
activity, underpinning our confidence in the Group's medium-term growth
prospects.
Recent increases in fuel prices are placing additional pressure on customer
cost bases. Given that our solutions typically deliver fuel savings of 4-6%,
and potentially more where multiple products are deployed, we would expect
sustained higher fuel costs to support increased demand for our offerings over
time.
Market
Australia continues to represent a highly attractive market for Microlise.
Despite a smaller population than the UK, its larger fleet size and
long-distance logistics requirements provide a structurally supportive
environment for our solutions. The market remains relatively underpenetrated,
offering significant long-term growth potential.
We are also seeing encouraging traction among mid-tier customers in the UK van
segment, as we expand beyond our traditional large fleet customer base in line
with our strategic priorities.
Demand from direct customers remains strong, and we are increasing investment
in our go-to-market capabilities to capture this opportunity. OEM volumes have
shown some improvement in the early part of 2026, although we are still
expecting annual OEM revenues to be lower than 2025.
Electric vehicle adoption moderated during 2025 as customers prioritised
maximising utilisation and efficiency from existing fleets, with new vehicle
investment remaining predominantly diesel-led due to cost considerations.
While the transition from internal combustion engine to alternative fuelled
vehicles continues, it remains a long-term, capital-intensive programme
representing a relatively small proportion of overall fleet volumes. Against
this backdrop, customers still require consistent tools to manage increasingly
complex mixed fleets, and Microlise is well positioned to support this
transition, providing continuity of fleet management capabilities across both
conventional and alternative fuel vehicles. We view the current pace of
adoption as cyclical rather than structural.
Customers
Microlise secured 417 new customers in FY2025 (FY2024: 375), while maintaining
low churn of 1.4% (FY2024: 0.7%). This reflects the critical role our
solutions play within customers' operations and the strength of our customer
relationships.
Adoption of multiple products continues to increase, supported by the rollout
of the Microlise One platform. Our Transport Management Solutions (TMS) module
is gaining strong commercial traction, particularly within the direct customer
segment, further embedding our solutions within customers' operational
workflows. Our focus is now on deepening engagement with this growing direct
customer base, driving further cross-sell and upsell opportunities, and
enhancing our go-to-market execution.
Product and Technology
Product innovation remains central to our strategy. We are launching enhanced
camera-based Advanced Driver Assistance Systems (ADAS), incorporating
increased use of AI, including driver monitoring and external safety features.
In addition, we are developing AI-driven data analytics tools for both
internal use and customers, with both standard and premium offerings. Our
extensive dataset provides a strong competitive advantage, and we see
significant long-term potential in leveraging this data to deliver enhanced
operational insights and value for customers.
We view artificial intelligence as a natural extension of our data-led
platform, enhancing the value we deliver to customers rather than operating as
a standalone capability. By embedding AI across Microlise One, we will enable
customers to move from insight to action, supporting more informed
decision-making, improving operational efficiency and strengthening safety
outcomes. Our focus is on the practical application of AI within transport
operations, including predictive analytics, anomaly detection and assisted
planning, with a clear pathway over time towards more automated and controlled
decision-making. We believe our scale of high-quality operational data,
combined with our integrated platform approach, positions Microlise strongly
to capitalise on the growing role of AI within the transport and logistics
sector.
Strategic Focus
Our strategic priorities remain:
• Increased investment in direct customer growth
We are allocating capital to additional resources to our go-to-market teams to
support continued expansion in our higher-quality, higher-margin direct
customer business.
• Improving margins through greater efficiency
The restructuring actions undertaken in 2025 have created a more efficient
cost base. We will continue to drive operational efficiencies to support
margin expansion and scalable growth.
• Continued development of the Microlise One platform
We are enhancing our integrated platform, including the rollout of Microlise
One Analytics, enabling customers to derive greater value from their data.
• International expansion
We continue to make progress across our existing international markets, with
particular focus on Australia, where we see the greatest opportunity.
• M&A
We continue to evaluate acquisition opportunities that align with our
strategic and financial objectives.
• Technology Partnerships
We are expanding our ecosystem through partnerships in adjacent sectors,
including temperature-controlled logistics, passenger transport, and last-mile
delivery.
Microlise Transport Conference
Our annual Microlise Transport Conference took place in mid-May at the Co-op
Arena in Manchester. It remains one of Europe's largest events for commercial
road transport, bringing together industry participants to share insights and
best practice.
People and Leadership
Duncan McCreadie, our former Chief Technology Officer, retired in April 2026
after ten years of service. We thank him for his significant contribution.
Dean Garvey-North joined the Group in November 2025 and worked alongside
Duncan during a transition period. Dean assumed full responsibility as Chief
Technology Officer from 1 January 2026, with a strong focus on leveraging AI
and maximising the value of our data assets.
ESG
We continue to strengthen our ESG credentials. Our own fleet has transitioned
to hybrid vehicles, with plans to move towards EVs over time. More broadly,
our solutions help customers reduce emissions, improve safety, and enhance
asset utilisation.
Current Trading & Outlook
We expect continued strong growth in our direct customer business, supported
by an expanded pipeline and increased go-to-market investment, although
OEM-related activity continues to be expected lower than 2025 levels. The
Group continues to navigate a more complex operating environment, including
ongoing supply chain disruptions linked to geopolitical tensions in the Middle
East and emerging cost pressures associated with shortage of electronic
components, in particular memory devices.
Looking ahead, we expect to increase targeted investment in 2026 across
product, infrastructure and go-to-market capability. This will include
investment in cloud infrastructure, product development to accelerate
implementation of the TMS module and mid-market offering, and additional sales
resource to support growth across target customers and partners in core
geographies.
The Board anticipates the investments will support revenue growth from 2027
and are being made from a strong capital position, with £16.7m of cash at
year end and a £30m undrawn debt facility, consisting of a £10.0m committed
revolving cash flow facility and a £20m accordion with HSBC.
While this investment will be managed within the Group's disciplined approach
to cost control and capital allocation, it is expected to absorb part of the
near term cost benefit realised from the £5m of annualised cost savings
delivered through the restructuring programme in 2025. As a result of the
above investment and a challenging market environment we expect FY26 revenues
to be slightly below current market expectations and adjusted EBITDA to be at
the lower end of current market expectations(8)
The Board believes this will deliver the right balance between accelerating
long term organic growth, expanding scalable and higher margin recurring
revenues combined with profit margin expansion through enhanced operation
efficiencies and revenue mix improvement accretive to margins.
CFO Statement
The financial results for the twelve-month period to 31 December 2025 reflect
continued revenue growth, alongside a period of investment and operational
transition to support future margin improvement.
To provide a clearer view of underlying business performance, the Group has
detailed the below Alternative Performance Measures (APMs) and Statutory
Measures for the 12-month period to 31 December 2025:
FY25 FY24 Change
APMs Adjusted Revenue ((1)) £84.0m £81.0m 4%
Adjusted Recurring Revenue ((1)) £58.8m £54.7m 8%
Annual Recurring Revenue (ARR) ((6)) £59.2m £56.6m 5%
Adjusted EBITDA ((2)) £8.3m £11.3m (27%)
Adjusted Profit before Tax ((3)) £2.7m £6.5m (59%)
Adjusted EPS (p) ((4)) 1.72p 4.19p (59%)
Adjusted Cash Flow Generated from Operations ((5)) £13.3m £10.3m 29%
Statutory Measures Revenue £84.0m £79.5m 6%
Recurring Revenue £58.8m £53.1m 11%
Operating Loss £(2.4)m £(2.3)m (4%)
Loss before Tax £(2.5)m £(2.3)m (9%)
Basic EPS (p) (1.87)p (1.77)p (5%)
Cash and cash equivalents £16.7m £11.4m 47%
Exceptional costs
Following the cyber security incident disclosed in FY24, the Group incurred an
additional £0.3m of exceptional costs in FY25 relating to the completion of
remediation activities and the management of associated claims. In addition,
the Group undertook targeted restructuring actions during the year, giving
rise to exceptional restructuring costs of £2.4m. As anticipated, insurance
recoveries in respect of the FY24 cyber incident were received during the
year, with £1.2m recognised as exceptional other income in FY25, the Board
remain confident that the impact of the cyber incident will be fully covered
by its cyber insurance. Taken together, these items reflect the continued
closeout of the cyber incident and related matters, alongside actions taken to
strengthen the Group's operational cost base.
To assist users of the financial statements with understanding underlying
business trading, the Group present KPI's excluding exceptional items,
including exceptional cyber cost revenue reversals, cyber incident insurance
proceeds. All exceptional costs are disclosed separately in note 2 of the
financial statements.
(1. Adjusted Revenue and Adjusted Recurring Revenue exclude
revenue reversals relating to the cyber security incident, which are expected
to be fully covered by insurance.)
(2. Adjusted EBITDA excludes exceptional income and costs in
relation to acquisitions, restructuring and the cyber incident, depreciation,
amortisation, share of loss of associate, loss on disposal of interest in
associate, interest, tax and share based payments.)
(3. Adjusted Profit before Tax excludes amortisation on business
combinations, share based payments, share of loss of associate, loss on
disposal of interest in associate and exceptional income and costs in relation
to the cyber incident, acquisitions, and restructuring costs.)
(4. Adjusted EPS and Adjusted Profit after Tax excludes
amortisation on business combinations, share based payments, share of loss of
associate, loss on disposal of interest in associate, exceptional income and
costs in relation to the cyber incident, acquisitions, and restructuring costs
and the associated tax effect of the above excluded items.)
(5. Adjusted cash flow generated from operations adds back
exceptional cash flows in relation to restructuring.)
(6. Annual Recurring Revenue (ARR) is calculated by multiplying
the December 2025 monthly recurring revenue by 12.)
(7. Net Revenue Retention (NRR) represents the change in recurring
revenue from existing customers over a 12 month period, after reflecting
expansions, contractions and churn, excluding any new customer wins.)
(8. For) (the purposes of this announcement, the Group understands
that market consensus for FY25 is for revenue of approximately £84 million
and adjusted EBITDA of approximately £8.3 million. For FY26, the Group
understands that market consensus is for revenue in the range of £87.2
million to £87.5 million and adjusted EBITDA in the range of £11.2 million
to £12.0 million as at 13 May 2026.)
Group Results Revenue
KPIs for the twelve months ended 31 December 2025 FY25 FY24 Change
Revenue £84.0m £79.5m 5.7%
Recurring Revenue £58.8m £53.1m 10.7%
Adjusted Revenue((1)) £84.0m £81.0m 3.7%
Adjusted Recurring Revenue((1)) £58.8m £54.7m 7.6%
Non-recurring Revenue £25.2m £26.3m (4.3%)
Annual Recurring Revenue (ARR)((6)) £59.2m £56.6m 4.6%
Direct Customer ARR((6)) growth 12.1% 18.3% (6.2%)
Net Revenue Retention (NRR)((7)) - Direct Customers 108% 113% (5%)
Net Revenue Retention (NRR)((7)) - Group 101% 109% (8%)
Adjusted revenue((1)) for the 12 months ended 31 December 2025 (FY25) was
£84m, an increase of 3.7% from 31 December 2024 (FY24). Adjusted recurring
revenues have grown 7.6% to £58.8m (FY24: £54.7m). During the period order
volumes for our global OEM((9)) customers in the automotive and construction
sectors have weakened, which has resulted in a reduction in both recurring and
non-recurring revenue. This is predominantly due to trading disruptions caused
by the impact of tariffs together with general weakness in the wider macro
environment. ARR((6)) relating to OEM customers reduced by 12.8% (FY24: 6.6%
reduction) to £15.0m (FY24: £17.2m).
A key highlight of the year has been the continued growth of the Group's
direct customer business, which delivered 16% recurring revenue growth during
the year (FY24: 17%). This is despite delays with a small number of planned
customer projects that we anticipate will result in revenue being recognised
in FY26 as the software and hardware products are deployed.
ARR increased by 4.6% to £59.2m (FY24: £56.6m), driven primarily by
expansion within the direct customer business. Growth was supported by strong
momentum in Australia and France during H1, reflecting a combination of new
customer wins and continued expansion across existing customer fleets as
projects to deploy Microlise's products and services were rolled out.
Notwithstanding the delays noted above, alongside the cessation of a low
margin legacy contract, direct customer ARR remained strong in the period
growing at 12.1% (FY24: 18.3%) to £44.2m (FY24: £39.4m).
In FY25, direct customer ARR growth moderated as selected customers optimised
fleet sizes following customer acquisition‑led expansion, and certain
low‑margin contracts were intentionally exited, rather than due to any
deterioration in underlying customer relationships. The direct customer
segment represents the most significant long-term opportunity for Microlise,
providing higher quality recurring revenue streams and stronger margins over
time.
Net Revenue Retention (NRR)((7)) for direct customers was 108% (FY24: 113%),
reflecting contract deployment delays noted above and a lower level of
incremental expansion from certain large customers. In the prior year, growth
within these customers was partially driven by customers acquisition‑led
fleet expansion, where Microlise products and services were deployed across
customers expanded fleets; this was subsequently followed by fleet reductions
as customers consolidated operations and implemented efficiency measures.
Additional impacts included managed churn. Total Group NRR was 101% (FY24:
109%), with the year‑on‑year reduction primarily driven by lower OEM
revenues.
Non-recurring revenues decreased by 4.3% to £25.2m (FY24: £26.3m). The
slowdown in both the construction and automotive industries has impacted
hardware shipments to our OEM customers which has driven a decrease in
hardware revenues of 5.7% to £18.3m (FY24: £19.4m). This decrease was
partially offset by an increase in hardware revenues in Australia as new
contracts continued to be rolled out in H1. Professional services revenues
have decreased by 13.2% to £3.3m (FY24: £3.8m) whilst installation revenues
increased 8.4% to £3.4m (FY24: £3.2m) reflecting the increased H1 activity
in Australia.
Gross Profit
Adjusted gross profit((10)) for the period increased by 1.2% to £54.1m (FY24
£53.5m), with an adjusted gross margin % of 64% (FY24: 66%). Reported gross
profit was £54.1m (FY24: £52.0m).
Administrative Expenses & Operating Profit
Adjusted administrative expenses((11)) before exceptional administrative
charges and share based payment charges, in the Period increased 8% to £54.6m
(FY24: £50.7m). Staff costs increased 6% to £38.5m (FY24: £36.2m). Average
headcount in the period was 816 (FY24: 805). In November 2025, the Group
announced cost saving and efficiency measures across parts of the Group that
included organisational restructuring, optimisation of internal processes and
several targeted cost saving programmes, mostly focussed on operations rather
than our go to market teams. These initiatives coupled with other ongoing
initiatives have generated £5m of annualised cost savings and headcount
reduction of over 100 FTEs. Part of these cost savings will be reinvested back
into the Company, primarily into our go to market teams to drive new business
activity.
Our margin enhancement programme continues into FY26, focusing on further cost
reductions and process improvements to support profitable growth. During the
year, elevated IT hardware costs and supply constraints increased the cost and
extended the delivery timelines of certain infrastructure investments,
resulting in the rephasing of a number of initiatives. As a result, associated
benefits are now expected to be realised over a longer period. These impacts
do not alter the Group's medium term margin ambitions, although the timing of
achieving this remains uncertain.
Marketing investment increased to c.£1.8m in FY25 (FY24: £1.3m) to support
the Group's international growth strategy and medium-term pipeline objectives.
Spend was directed towards strengthening our market presence in priority
regions, enhancing campaign capability, and expanding events activity as a
direct pipeline driver. The implementation of scalable marketing automation
has improved targeting, lead management and performance measurement,
supporting a more disciplined and data-led approach to marketing investment.
Legal, professional and IT costs increased during the period by a net £0.8m.
The main driver for this increase was continued investment into Microlise's
security posture where spending increased by c.£0.6m on the prior year.
Depreciation and amortisation charges in the period increased 9% to £8.5m
(FY24: £7.9m). Depreciation charges increased as a result of increased levels
of fixed asset investment in the Group's data centres and improvements to its
headquarters. Amortisation charges increased as a result of continued
investment in internally developed technologies.
Capitalised development costs in FY25 were £2.7m (FY24: £2.7m), reflecting
the ongoing levels of investment into the product portfolio including
integration of recent acquisitions, architecture and security. Amortisation of
capitalised development costs in FY25was £2.2m (FY24: £1.7m).
Operating profit for FY25 after adjusting for exceptional items, share based
payments, and amortisation charges as a result of business combinations was
£2.6m (FY24: £6.3m). Reported operating loss for the period was £2.4m
(FY24: £2.3m loss), the principal factors driving this are cyber related
exceptional costs and increases in amortisation charges from continued
investment in internally developed technologies.
Adjusted EBITDA((2)) & Profit Before Tax
To provide a clearer view of underlying business performance, Adjusted EBITDA
excludes exceptional items relating to restructuring and the impact of the
2024 cyber incident, together with depreciation, amortisation, share of loss
of associate, loss on disposal of interest in associate, interest, tax and
share based payments. Adjusted EBITDA for the year was £8.3m (FY24: £11.3m),
representing a 27% reduction year on year.
The reduction reflects a combination of temporary trading impacts and
deliberate structural investments. Looking into FY26, the Group expects to
increase targeted investment in product, infrastructure and go-to-market
capability. This will include investment in cloud infrastructure, product
development to accelerate implementation of the TMS module and mid-market
offering, and additional sales resource to support growth across target
customers in core geographies. These investments are being made from a
position of balance sheet strength, with £16.7m of cash at year end and no
drawn debt and are intended to support revenue growth from 2027 onwards.
While this investment will be managed within the Group's disciplined approach
to cost control and capital allocation, it is expected to absorb part of the
benefit from the £5m of annualised cost savings delivered through the
restructuring programme in Q4. The Board believes this is the right balance
between near-term margin discipline and long-term growth investment,
supporting the Group's objective of building a more scalable, higher-margin
and recurring revenue-led business.
Adjusted profit before taxation((3)) for the period decreased 59% to £2.7m
(FY24: £6.5m), reflecting the lower Adjusted EBITDA and higher depreciation
and amortisation charges associated with capitalised development costs. The
adjusted profit before taxation excludes exceptional costs in relation to
restructuring and cyber security costs, amortisation charges of £2.7m as a
result of business combinations (FY24: £2.8m), share of loss of associate and
share based payments. Reported loss before taxation in the period was £2.5m
(FY24: £2.3m loss).
Taxation
The tax credit in the 12 months ended 31 December 2025 was £0.4m (FY24:
£0.3m credit). The effective tax rate for the year is higher than the
standard rate of corporation tax and this is driven by the share of associate
loss not deductible and non-deductible expenses for share based payments.
Underlying deferred tax credits relate to the amortisation of intangible
assets and utilisation of accelerated allowances offset by the utilisation of
tax losses brought forward.
From 1 July 2020, Microlise has been classified as a large company for tax
research and development purposes and benefits from the Research and
Development Expenditure Credit scheme (RDEC) with any benefit being reflected
as grant income within other operating income. In the period ended 31 December
2025 the pretax value of the credit was £0.1m (FY24: £0.4m).
Profit After Tax, EPS and Dividend
Adjusted profit after tax((4)) for the year decreased 58.9% to £2.0m (FY24:
£4.9m). As a result, adjusted earnings per share((4)) in the period decreased
58.9% to 1.72p (FY24: 4.19p). Reported basic loss per share was 1.87p (FY24:
1.77p loss) and diluted loss per share was 1.87p (FY24: 1.77p loss). For
further information on earnings per share, please refer to note 8 of the
financial statements. Reported loss after tax for the 12 months ended 31
December 2025 was £2.2m (FY24: £2.1m loss).
During the period, the Group paid a FY24 final dividend of 1.24 pence per
share and a FY25 interim dividend of 0.60 pence per share. The Board is
recommending the payment of a FY25 final dividend of 1.30 pence per ordinary
share. Subject to shareholder approval at the Annual General Meeting to be
held on 24 June 2026, the dividend will be paid on 24 July 2026 to
shareholders on the register at the close of business on 3 July 2026.
Group Statement of Financial Position
The Group had net assets of £68m at 31 December 2025 (FY24: £71.9m). Total
assets decreased by £1.8m to £132.9m (FY24: £134.6m). During FY25 the Group
disposed of its investment in Trakm8 Holdings Plc (Trakm8), which was sold to
Brillian UK Limited via an all cash offer at 9.5 pence per share. The
transaction completed in July 2025, resulting in Microlise disposing of its
full equity interest in Trakm8. As part of the transaction framework,
Microlise's £1.0 million convertible loan was converted into equity at 8.1
pence per share and subsequently disposed of as part of the cash offer. Trade
debtors reduced by 24% to £16m (FY24: £21.1m) as a result of strong cash
collection across the customer base.
Total liabilities increased by £2.1m due to an increase in lease liabilities
resulting from increased data centre capacity as part of the strategy to
reduce third party hosting costs, as well as an increase in vehicle leasing
costs driven by the transition to hybrid vehicles for our mobile engineering
teams. The Group typically invoices for software subscriptions monthly,
quarterly, annually or for the life of the subscription in advance which
drives a strong balance sheet with significant cash balances. Revenue is
recognised in the month the service is provided with deferred income disclosed
as contract liabilities in current and non current liabilities. As at the end
of December 2025 total Trade and other payables was £52.9m (FY24: £52.4m).
Of this balance £38.5m (FY24: £38.8m) is deferred income and relates to
future contracted revenue recognition.
Adjusted Cashflow((5)) & Net Cash
Adjusted cash flows generated from operations((5)) remains healthy at £13.3m
in the period (FY24: £10.3m), and this represents a cash conversion
rate((12)) of 142% (FY24: 91%). Reported cash flows generated from operations
in the period was £11.9m (FY24: £9.7m). The Group ended the 12-month period
to 31 December 2025 with cash and cash equivalents of £16.7m (FY24: £11.4m).
Overall, the net cash inflow was £5.4m with the main movements being;
reduction in Trade Debtors of £5.2m (FY24: £2.1m increase); net tax payments
of £0.6m, (FY24: £0.9 receipt), FY24 final dividend and FY25 interim
dividend totalling £2.1m (FY24: £2.7), purchases of plant, property and
equipment of £2.5m (FY24: £1.4m), investment into product and development of
£2.7m (FY24: £2.7m), and payments in respect of lease liabilities £1.4m
(FY24: £1.2m).
Banking Facility
In April 2024, the Group renewed its debt facility with HSBC with an agreed
£10.0m committed revolving cash flow facility and a £20m accordion. The
Group has not utilised any of this facility to date and therefore the Group
remains comfortably within its banking covenants. The Group's cash of £16.7m
(FY24: £11.4m) and the undrawn £10.0m facility gives the Group £26.7m of
cash availability, which the Directors believe provides ample headroom for
Microlise to deliver against its strategic goals. Given the level of headroom
in the business forecasts, the Board consider it appropriate to prepare the
financial statements on the going concern basis. Details of the Board's going
concern assessment is provided in the basis of preparation note in the
financial statements.
Additional Notes
(1. Adjusted Revenue and Adjusted Recurring Revenue exclude
revenue reversals relating to the cyber security incident, which are expected
to be fully covered by insurance.)
(2. Adjusted EBITDA excludes exceptional income and costs in
relation to acquisitions, restructuring and the cyber incident, depreciation,
amortisation, share of loss of associate, loss on disposal of interest in
associate, interest, tax and share based payments.)
(3. Adjusted Profit before Tax excludes amortisation on business
combinations, share based payments, share of loss of associate, loss on
disposal of interest in associate and exceptional income and costs in relation
to the cyber incident, acquisitions, and restructuring costs.)
(4. Adjusted EPS and Adjusted Profit after Tax excludes
amortisation on business combinations, share based payments, share of loss of
associate, loss on disposal of interest in associate, exceptional income and
costs in relation to the cyber incident, acquisitions, and restructuring costs
and the associated tax effect of the above excluded items.)
(5. Adjusted cash flow generated from operations adds back
exceptional cash flows in relation to restructuring.)
(6. Annual Recurring Revenue (ARR) is calculated by multiplying
the December 2025 monthly recurring revenue by 12.)
(7. Net Revenue Retention (NRR) represents the change in recurring
revenue from existing customers over a 12 month period, after reflecting
expansions, contractions and churn, excluding any new customer wins.)
(8. For the purpose of this announcement, the Group believes
market consensus for FY25 to be revenues of £84 million and adjusted EBITDA
of £8.3 million.)
(9. OEM is an abbreviation for Original Equipment Manufacturers.)
(10. Adjusted gross profit adds back the impact of credit notes
related to the cyber incident.)
(11. Adjusted Administrative Expenses adds back exceptional costs
related to the cyber incident, and exceptional costs in relation to
acquisitions and restructuring.)
(12. Cash conversion is calculated by dividing adjusted cash flow
generated from operations by adjusted EBITDA.)
Financial Statements
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2025
2025 2025 2025 2024 2024 2024
Underlying results Exceptional cyber and restructuring costs Total Underlying results Exceptional cyber and restructuring costs Total
(note 2) (note 2)
Note £'000 £'000 £'000 £'000 £'000 £'000
Revenue 1 84,027 - 84,027 80,995 (1,520) 79,475
Cost of sales (29,888) - (29,888) (27,474) - (27,474)
Gross profit 54,139 - 54,139 53,521 (1,520) 52,001
Other operating income 3 219 1,153 1,372 640 - 640
Administrative expenses (55,251) (2,678) (57,929) (52,089) (2,860) (54,949)
3 (893) (1,525) (2,418) 2,072 (4,380) (2,308)
Operating (loss)/profit
Interest income 5 361 - 361 452 - 452
Interest expense 6 (259) - (259) (250) - (250)
Share of loss of associate net of tax 12 - - - (229) - (229)
Gain on conversion of loan to associates 12 181 - 181 - - -
Loss on disposal of interest in associate 12 (414) - (414) - - -
(1,024) (2,549) 2,045 (2,335)
(Loss)/profit before taxation (1,525) (4,380)
Taxation 7 3 381 384 (814) 1,095 281
(Loss)/profit for the year (1,021) (1,144) (2,165) 1,231 (3,285) (2,054)
Other comprehensive expense for the year
Currency translation differences (257) - (257) (34) - (34)
Total comprehensive (expense)/income for the year attributable to the equity (2,422) (2,088)
shareholders of Microlise Group plc
(1,278) (1,144) (3,285)
Basic earnings per share (pence) 8 (0.88) (0.99) (1.87) 1.06 (2.83) (1.77)
Diluted earnings per share (pence) 8 (0.88) (0.99) (1.87) 1.06 (2.83) (1.77)
Consolidated Statement of Financial Position
as at 31 December 2025
31 December 31 December
2025 2024
Note £'000 £'000
Assets
Non-current assets
Property, plant and equipment 10 11,628 8,702
Intangible assets 11 81,673 83,914
Investments in associate 12 - 1,364
Trade and other receivables 14 2,996 3,201
Total non-current assets 96,297 97,181
Current assets
Inventories 13 2,753 3,212
Loan to associate 12 - 1,000
Trade and other receivables 14 15,990 21,104
Corporation tax recoverable 1,100 746
Cash and cash equivalents 15 16,743 11,401
Total current assets 36,586 37,463
Total assets 132,883 134,644
Current liabilities
Lease liabilities 16 (1,188) (809)
Trade and other payables 17 (35,147) (36,409)
Total current liabilities (36,335) (37,218)
Non-current liabilities
Lease liabilities 16 (2,689) (500)
Trade and other payables 17 (17,742) (16,051)
Deferred tax 18 (5,464) (6,114)
Provisions 19 (2,611) (2,862)
Total non-current liabilities (28,506) (25,527)
Total liabilities (64,841) (62,745)
Net assets 68,042 71,899
Equity
Issued share capital 22 116 116
Share premium account 17,630 17,630
Retained earnings 50,296 54,153
Total equity 68,042 71,899
Consolidated Statement of Changes in Equity
Share Capital Share Premium Account Retained earnings Total Equity
£'000 £'000 £'000 £'000
At 31 December 2023 116 17,630 57,927 75,673
Comprehensive expense for the year ended 31 December 2024
Loss for the year - - (2,054) (2,054)
Other comprehensive expense - - (34) (34)
Total comprehensive expense for the year - - (2,088) (2,088)
Share based payment (note 23) - - 975 975
Dividends paid (note 9) - - (2,661) (2,661)
Total transactions with owners - - (1,686) (1,686)
116 54,153 71,899
At 31 December 2024 17,630
Comprehensive expense for the year ended 31 December 2025
Loss for the year - - (2,165) (2,165)
Other comprehensive expense - - (257) (257)
Total comprehensive expense for the year - - (2,422) (2,422)
Share based payment (note 23) - - 698 698
Dividends paid (note 9) - - (2,133) (2,133)
Total transactions with owners - - (1,435) (1,435)
116 50,296 68,042
At 31 December 2025 17,630
Company Statement of Financial Position
as at 31 December 2025
31 December 31 December
2025 2024
Note £'000 £'000
Assets
Non-current assets
Property, plant and equipment 10 4,532 4,634
Investments 12 94,020 94,094
Deferred tax 18 2 1
Total non-current assets 98,554 98,729
Current assets
Loan to associate 12 - 1,000
Trade and other receivables 14 375 51
Corporation tax recoverable 361 -
Cash and cash equivalents 15 229 55
Total current assets 965 1,106
99,519 99,835
Total assets
Current liabilities
Trade and other payables 17 (23,905) (23,311)
Total current liabilities (23,905) (23,311)
Total liabilities (23,905) (23,311)
Net assets 75,614 76,524
Equity
Issued share capital 22 116 116
Share premium account 17,630 17,630
Retained earnings 57,868 58,778
Total equity 75,614 76,524
Company Statement of Changes in Equity
Share Capital Share Premium Account Retained earnings Total Equity
£'000 £'000 £'000 £'000
At 31 December 2023 116 55,806 73,552
17,630
Comprehensive income for the year to 31 December 2024
Profit for the year - - 4,643 4,643
Other comprehensive income - - - -
Total comprehensive income for the year - - 4,643 4,643
Share based payment (note 23) - - 990 990
Dividends paid (note 9) (2,661) (2,661)
Total transactions with owners - - (1,671) (1,671)
116 58,778 76,524
At 31 December 2024 17,630
Comprehensive income for the year to 31 December 2025
Profit for the year - - 525 525
Other comprehensive income - - - -
Total comprehensive income for the year - - 525 525
Share based payment (note 23) - - 698 698
Dividends paid (note 9) - - (2,133) (2,133)
Total transactions with owners - - (1,435) (1,435)
116 57,868 75,614
At 31 December 2025 17,630
Consolidated Statement of Cash Flows
for the year ended 31 December 2025
Year ended Year ended
31 December
31 December
Note 2025 2024
£'000 £'000
Cash flows from operating activities
Cash generated from operations A 12,503 8,820
Tax received 496 1,211
Tax paid (1,055) (334)
Net cash generated from operating activities 11,944 9,697
Cash flows from investing activities
Purchase of property, plant and equipment (2,478) (1,421)
Proceeds from disposals of property, plant and equipment 2 1
Additions to intangible assets (2,783) (2,765)
Proceeds on sale of shares in associate 2,180 -
Purchase of subsidiary net of cash acquired 26 - (7,063)
Purchase of subsidiaries deferred consideration paid - (200)
Interest received 312 452
Net cash used in investing activities (2,767) (10,996)
Cash flows from financing activities
Interest paid (259) (250)
Lease liability payments (1,411) (1,150)
Dividends paid (2,133) (2,661)
Net cash used in financing activities (3,803) (4,061)
Net increase/(decrease) in cash and cash equivalents 5,374 (5,360)
Cash and cash equivalents at beginning of year 11,401 16,800
Foreign exchange losses (32) (39)
Cash and cash equivalents at end of year B 16,743 11,401
Notes to the cash flow statements
A. Cash generated from operations
The reconciliation of the loss for the year to cash generated from operations
is set out below:
Year ended Year ended
31 December
31 December
2025 2024
£'000 £'000
Loss for the year (2,165) (2,054)
Adjustments for:
Depreciation of property, plant and equipment 3,517 3,174
Amortisation of intangible assets 5,024 4,689
Loss on disposal of property, plant and equipment - 1
Share based payments 698 975
Foreign exchange movements (226) 4
Interest income (361) (452)
Interest expense 259 250
Loss on disposal/share of loss of associate 233 229
Gain on conversion of loan to associate (181) -
Loss on disposal of interest in associate 414 -
Tax credit (384) (281)
6,595 6,535
Decrease in inventories 459 136
Decrease/(increase) in trade and other receivables 5,221 (2,138)
Increase in trade and other payables 479 1,425
(Decrease)/increase in provisions (251) 2,862
Cash generated from operations 12,503 8,820
B. Analysis of net funds
At 1 January Cash flow Non-cash changes At
31 December
2025 2025
£'000 £'000 £'000 £'000
Lease liabilities (1,309) 1,411 (3,979) (3,877)
Liabilities arising from financing activities (1,309) 1,411 (3,979) (3,877)
Cash and cash equivalents 11,401 5,374 (32) 16,743
Net funds 10,092 6,785 (4,011) 12,866
At 1 January Cash flow Non-cash changes At
31 December
2024 2024
£'000 £'000 £'000 £'000
Lease liabilities (1,553) 1,284 (1,040) (1,309)
Liabilities arising from financing activities (1,553) 1,284 (1,040) (1,309)
Cash and cash equivalents 16,800 (5,360) (39) 11,401
Net funds 15,247 (4,076) (1,079) 10,092
Major non cash items
£3,979,000 of additions to right of use assets and lease liabilities are
included in non cash movements in the year ended 31 December 2025 (2024:
£406,000) together with £nil of acquired lease assets and liabilities (2024:
£500,000).
Summary of Material Accounting Policies
General information
Microlise Group plc is a holding and management services company. Its
subsidiaries are telematics businesses providing technological transport
solutions that enable customers to reduce costs and environmental impact by
maximising the efficiency of their transportation. The company is a public
limited company, traded on the Alternative Investment Market ("AIM") of the
London Stock Exchange, and incorporated and domiciled in England. The
address of the registered office is Farrington Way, Eastwood, Nottingham, NG16
3AG.
A. Basis of preparation
The consolidated financial statements have been prepared in accordance with
the historical cost convention and UK adopted International Accounting
Standards ('UK IFRS'). The stated accounting policies have been consistently
applied to all periods presented.
The financial information does not constitute the Company's statutory accounts
for the years ended 31 December 2025 or 31 December 2024 but is derived from
those accounts. Statutory accounts for the year ended 31 December 2025 will be
delivered to the Registrar of Companies in due course. The Auditor has
reported on the 2025 accounts; his reports (i) were unqualified, (ii) did not
include a reference to any matters to which the Auditor drew attention by way
of emphasis without qualifying his report and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006.
The parent company financial statements have been prepared under applicable
United Kingdom Accounting Standards (FRS 101). The following FRS 101
disclosure exemptions have been taken in respect of the parent company only
information:
· IAS 7 Statement of cash flows;
· IFRS 7 Financial instruments disclosures; and
· IAS 24 Key management remuneration.
The financial statements including the notes are presented in thousands of
pounds sterling ('£'000'), the functional and presentation currency of the
Group, except where otherwise indicated.
The principal accounting policies adopted in preparation of the financial
statements are set out below. The policies have been consistently applied to
all periods presented, unless otherwise stated.
Judgements made by the Directors in the application of the accounting policies
that have a significant effect on the historical financial information and
estimates with significant risk of material adjustment in the next year are
discussed in note C.
Going concern
The directors have considered working capital forecasts prepared for the
period to December 2027. The Group had cash balances of £16.7m at the year
end, no borrowings and a £10m undrawn working capital facility which is not
forecast to be utilised. The Group also has a significant recurring income
base with inflationary clauses in the main contracts.
A range of sensitivities have been run on the working capital model, and the
directors consider a scenario in which the business will face liquidity issues
is remote. As part of the sensitivity analysis the directors have considered
the impact of a reduction in turnover from their principal customer, a
reduction in sales orders from its wider customer base and the associated
impact on working capital. The Directors are satisfied that the Group has
sufficient resources to respond to reasonably foreseeable scenarios and
conclude that a scenario that would result in the need for the Group to
require additional funding to be remote.
Based on the forecasts, the Directors are satisfied that the Group can meet
its day-to-day cash flow requirements and operate within the terms of its
working capital banking facilities if required. Accordingly, the financial
statements have been prepared on a going concern basis.
B. Accounting policies
Consolidation
The consolidated financial statements include the results of Microlise Group
plc and its subsidiary undertakings. The results of the subsidiary
undertakings are included from the date that effective control passed to the
company.
On acquisition, all the subsidiary undertakings' assets and liabilities at
that date of acquisition are recorded under purchase accounting at fair value,
having regard to condition at the date of acquisition. All changes to those
assets and liabilities and the resulting gains and losses that arise after the
company gained control are included in the post-acquisition results. Sales,
profits and balances between group companies are eliminated on consolidation.
The Group has taken advantage of the exemption not to disclose transactions
between wholly owned entities in the group.
Associates
Entities in which the Group holds a participating interest and over whose
operating and financial policies the group exercises a significant influence
are treated as associates. In the Group financial statements, Trakm8 Holdings
plc is accounted for as an associate using the equity method. The initial
investment was accounted for at cost and the subsequent share of associate
profits or losses reported in the Statement of Comprehensive Income and are
added to or deducted from the carrying value of the investment.
Revenue recognition
Revenue comprises revenue recognised by the Group in respect of goods and
services supplied during the year, based on the consideration specified in a
contract, exclusive of Value Added Tax and trade discounts.
The Group enters into the sale of multi-element contracts, which combine
separate performance obligations including hardware, installation, managed
service contracts (software-as-a-service or SaaS), software licences,
professional services (which includes bespoke software development, project
management (incorporating activities including project and installation
planning, managing change control and stage boundaries and project
reporting), consultancy, training), and support and maintenance services
relating to these products. In accordance with IFRS 15, these are considered
to be distinct.
Each performance obligation is allocated a transaction price based on the
stand-alone selling prices. Where stand-alone prices are not directly
observable, they are based on expected cost plus margin.
Revenue is recognised depending upon the revenue stream to which it relates,
as follows:
· The fair value of hardware and installation revenue is recognised
at a point in time when control is transferred to the customer on despatch
and/or upon installation;
· Revenue from the SaaS arrangement is recognised over a period of
time, based on the term of the contract on a straight line basis. Revenue
recognition over time is considered appropriate based on provisions of IFRS 15
paragraph 35 as the customer simultaneously receives and consumes the benefits
provided by the Group. The contractual term for average SaaS agreements are
approximately 5 years;
· Professional services typically include implementation,
configuration, training and other similar services to create optimised
interfaces between the Group's software and customers systems. Revenue from
professional services is recognised over a period of time using the input
method as professional services are being performed, as this best depicts the
timing of how the value is transferred to the customer; and
· Support and maintenance turnover is deferred at the point of sale
and recognised in the Statement of Comprehensive Income over a period of time
of the contractual life, utilising the output method, generally on a straight
line basis as the customer simultaneously receives and consumes the benefits
provided by the Group.
Invoicing for all revenue streams is undertaken in accordance with the terms
of the agreement with the customer. When an invoice is due for payment at
the statement of financial position date but the associated performance
obligations have not been fulfilled the amounts due are recognised as trade
receivables and a contract liability is recognised for the sales value of the
performance obligations that have not been provided. If payment is received
in advance of the delivery of the associated performance obligation a contract
liability is recognised. When an invoice is not due for payment at the
statement of financial position date and the associated performance obligation
has not been fulfilled no amounts are recognised in the financial statements.
In cases where customers pay for the goods and services over an agreed period,
the fair value of the consideration is determined by discounting future
receipts using an imputed rate of interest. The difference between the fair
value and the nominal amount of the consideration is recognised as finance
income over the payment period.
Contract costs
Under IFRS 15, the Group capitalises commission fees as costs of obtaining a
contract when they are incremental and, if they are expected to be recovered,
it amortises them consistently with the pattern of revenue for the related
contract. If the expected amortisation period is one year or less, then the
commission is expensed when incurred. Contract costs are capitalised to
trade and other receivables, due within and after one year.
The Group in certain circumstances incurs costs to deliver its services and
fulfil specific contracts. These costs may include process mapping and
design, scoping and configuration. Contract fulfilment costs are divided into
costs that deliver an asset and costs that are expensed as incurred.
Under IFRS 15, the Group capitalises these contract fulfilment costs when they
directly relate to a specifically identifiable contract or anticipated
contract, will enhance or generate resources used to satisfy future
performance obligations and they are expected to be recovered. Where
capitalised, it amortises them consistently with the pattern of revenue for
the related contract.
At each reporting date, the Group determines whether or not the contract
assets are impaired by comparing the carrying amount of the asset to the
remaining amount of consideration that the Group expects to receive less the
costs that relate to providing services under the relevant contract.
Employee benefits
The Group operates a defined contribution pension scheme. Contributions are
recognised in the Statement of Comprehensive Income in the year in which they
become payable in accordance with the rules of the scheme.
Short term employee benefits including holiday pay are recognised as an
expense in the period in which the service is rendered.
Share based payment
The Group operates an equity-settled share based compensation plan in which
the Group receives services from directors and certain employees as
consideration for share options. The fair value of the services is recognised
as an expense over the estimated vesting period, determined by reference to
the fair value of the options granted.
Taxation
The taxation expense or credit comprises current and deferred tax recognised
in the profit for the financial period or in other comprehensive income or
equity if it arises from amounts recognised in other comprehensive income or
directly in equity. Current tax is provided at amounts expected to be paid (or
recovered) in respect of the taxable profits for the period using tax rates
and laws that have been enacted or substantively enacted by the reporting
date. Microlise, as a large company from 1 July 2020 for tax R&D purposes,
qualifies for the large company RDECs which are included as grant income
within other operating income.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred income tax is also not accounted for if it
arises from initial recognition of an asset or liability in a transaction
other than a business combination that, at the time of the transaction,
affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially
enacted by the end of the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised to the extent that it is regarded as more
likely than not that they will be recovered.
Deferred tax assets and liabilities are offset only where there is a legally
enforceable right to offset and where the deferred tax balances relate to the
same taxation authority.
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
Government grants
Grants are accounted under the accruals model, and grants of a revenue nature
are recognised in the Statement of Comprehensive Income in the same period as
the related expenditure. Government grants relate to innovation grants and
large company research and development expenditure credits ('RDEC' s).
Foreign exchange
Transactions denominated in foreign currencies are translated into sterling at
the rates ruling on the date of the transaction. Monetary assets or
liabilities denominated in foreign currencies at the Statement of Financial
Position date are translated at the rate ruling on that date and all
translation differences are charged or credited in the Statement of
Comprehensive Income.
On consolidation, the results of overseas operations are translated into
Sterling at rates approximating to those ruling when the transactions took
place. All assets and liabilities of overseas operations are translated at
the rate ruling at the reporting date. Exchange differences arising on
translating the opening net assets at opening rate and the results of overseas
operations at actual rate are recognised in other comprehensive income.
Intangible assets
Goodwill arises on the acquisition of subsidiaries and represents the excess
of the consideration transferred over the fair value of the net assets
acquired at the acquisition date. Goodwill is stated at cost less any
accumulated impairment losses. Goodwill is allocated to cash-generating units
and is not amortised but is tested annually for impairment. In respect of
equity accounted investees, the carrying amount of goodwill is included in the
carrying amount of the investment in the investee.
Intangible assets acquired separately from a business are recognised at cost.
Intangible assets acquired as part of an acquisition are recognised separately
from goodwill if the fair value can be measured reliably on initial
recognition. Intangible assets created within the business are not recognised,
other than for qualifying development expenditure, and expenditure is charged
against profits in the year in which it is incurred.
Subsequent to initial recognition, intangible assets are stated at cost less
accumulated recognised and accumulated impairment. Intangible assets are
amortised on a straight line basis within administrative expenses over their
estimated useful lives as follows:
Asset
class
Amortisation period
Brands
3 to 15 years
Customer relationships
7 to 16 years
Technology assets
5 to 13 years
Software
3 to 5 years
Intangible assets are tested for impairment when an event that might affect
asset values has occurred. Any such impairment in carrying value is written
off to the Statement of Comprehensive Income immediately.
Research and development expenditure
An internally generated intangible asset arising from development (or the
development phase) of an internal project is recognised if, and only if, all
of the following have been demonstrated:
· It is technically feasible to complete the development such that
it will be available for use, sale or licence;
· There is an intention to complete the development;
· The method by which probable future economic benefits will be
generated is known;
· There are adequate technical, financial and other resources
required to complete the development; and
· There are reliable measures that can identify the expenditure
directly attributable to the project during its development.
The amount recognised is the expenditure incurred from the date when the
project first meets the recognition criteria listed above. Expenses
capitalised as "Developed technology" within intangible assets consist of
employee costs incurred on development. Where the above criteria are not met,
development expenditure is charged to the consolidated statement of
comprehensive income in the period in which it is incurred. The expected life
of internally generated intangible assets varies based on the anticipated
useful life, currently ranging from five to seven years.
Subsequent to initial recognition, internally generated intangible assets are
reported at cost less accumulated amortisation and impairment losses.
Amortisation is charged on a straight-line basis over the estimated useful
life in which the intangible asset has economic benefit and is reported within
administrative expenses in the consolidated statement of comprehensive income.
Research expenditure is recognised as an expense in the period in which it is
incurred.
Research and development expenditure tax credits arise in the UK. Those
relevant to a large company for tax purposes are credited to other operating
income as a grant.
Financial assets
Financial assets, including trade and other receivables, cash and cash
equivalent balances are initially recognised at transaction price. Such assets
are subsequently carried at amortised cost using the effective interest
method. Cash and cash equivalents comprise cash held at bank which is
available on demand.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade
receivables. The group measures loss allowances at an amount equal to
lifetime ECL, which is estimated using past experience of the group's
historical credit losses experienced over the three year period prior to the
period end. Historical loss rates are then adjusted for current and
forward-looking information on macroeconomic factors affecting the group's
customers, such as inflation rates. The gross carrying amount of a financial
asset is written off (either partially or in full) to the extent that there is
no realistic prospect of recovery.
To measure expected credit losses on a collective basis, trade receivables and
contract assets are grouped based on similar credit risk and aging. The
contract assets have similar risk characteristics to the trade receivables for
similar types of contracts.
The group recognises loss allowances for expected credit losses (ECLs) on
financial assets measured at amortised cost to the extent that these are
material. The group has determined that there is no material impact of ECLs
on the historical financial information.
Contingent assets
A contingent asset is a possible asset that arises from past events and whose
existence as of the reporting date will be confirmed only by the occurrence or
non‑occurrence of one or more uncertain future events not wholly within the
control of the entity. Contingent assets are not recognised at the financial
period end. The nature and circumstances relating to the contingent asset are
disclosed.
Financial liabilities
Financial liabilities, including trade and other payables, lease liabilities
and bank borrowings are initially recognised at transaction price, unless the
arrangement constitutes a financing transaction, where the debt instrument is
measured at the present value of the future receipts discounted at a market
rate of interest. Debt instruments are subsequently carried at amortised cost,
using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due within one year or
less. If not, they are presented as non-current liabilities. Trade payables
are recognised initially at transaction price and subsequently measured at
amortised cost using the effective interest method.
Financial liabilities are derecognised when the liability is extinguished,
that is when the contractual obligation is discharged, cancelled or expires.
Borrowings are initially stated at the fair value of the consideration
received after deduction of wholly attributable issue costs. Borrowings are
subsequently stated at amortised cost using the effective interest method.
Right-of-use assets and lease liabilities
Under IFRS 16, leases are recognised as right-of-use assets, presented as a
separate category within property, plant and equipment included in the
consolidated statement of financial position, and with a corresponding lease
liability from the date at which the leased asset is available for use by the
Group. This has been adopted and applied on a full retrospective basis.
Assets and liabilities arising from a lease are initially measured at the
present value of the lease payments and payments to be made under the terms of
the lease. Reasonably certain extension options are also included in the
measurement of the liability. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be readily determined,
or the incremental borrowing rate that the individual lessee would have to pay
to borrow the funds necessary to obtain an asset of similar value to the
right-of-use asset in a similar economic environment with similar terms,
security and conditions.
Lease payments are allocated between principal, presented as a separate
category within liabilities, and finance cost. The finance cost is charged to
the statement of comprehensive income over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period. Right-of-use assets are measured at cost comprising the
amount of the initial measurement of lease liability, any lease payments made
at or before the commencement date less any lease incentives received and any
initial direct costs. Leasehold dilapidations are recognised in relation to
the estimated cost of returning a leasehold property to its original state at
the end of the lease in accordance with the lease terms.
Depreciation is charged on a straight line basis over the period of the lease
and assets are subject to impairment reviews where circumstances indicate
their value may not be recoverable of if they are not being utilised.
Payments associated with short-term leases of property, plant and equipment
and leases of low-value assets continue to be recognised on a straight-line
basis as an expense. Short-term leases are leases with a lease term of 12
months or less.
Property, plant and equipment
Property, plant and equipment assets are stated at cost less depreciation.
Cost includes the original purchase price of the asset and the costs
attributable to bringing the asset to its working condition for its intended
use. Depreciation is provided on all property, plant and equipment assets at
rates calculated to write off the cost of each asset on a straight line basis
over its expected useful life, as follows:
Asset
class
Depreciation method rate
Freehold
property
2% straight line
Leasehold
improvements
Over the period of the lease
Equipment, fixtures and
fittings 20-33%
straight line basis
Investments
Investments in subsidiaries are stated at cost or at the fair value of shares
issued as consideration less provision for any impairment. Investments in
associates are stated at fair value through the profit and loss.
Inventories
Inventories are valued at the lower of purchase cost and net realisable value,
after due regard for any slow moving items. Net realisable value is based on
selling price less anticipated costs to completion and selling costs. Cost
is based on the cost of purchase on a weighted average basis. Work in
progress and finished goods include labour and attributable overheads.
At each reporting date, inventories are assessed for impairment. If
inventory is impaired, the carrying amount is reduced to its net realisable
value. The impairment loss is recognised immediately in the consolidated
statement of comprehensive income.
Provisions
Provisions are recognised for probable liabilities of uncertain timing or
amount including elements of claims for reimbursement relating to a cyber
incident that impacted services to customers. The provision is measured at the
best estimate of the expenditure required to settle an obligation existing at
the reporting date. Possible obligations that arise from past events and whose
existence will be confirmed only by the occurrence or non occurrence of one or
more uncertain future events not wholly within the control of the company and
hence where an outflow of economic benefit is not probable are not provided
for and are disclosed as contingent liabilities.
Share capital and reserves
Financial instruments issued by the company are treated as equity only to the
extent that they do not meet the definition of a financial liability. The
parent company's ordinary shares are classified as equity instruments.
The share premium account represents the amount by which the issue price of
shares exceeds the nominal value of the shares less any share issue expenses.
The merger reserve represents the difference between the fair value of the
shares issued as part of the consideration for Microlise Holdings Limited and
the nominal value of the shares issued.
Retained earnings comprises opening retained earnings and total comprehensive
income for the year, net of dividends paid.
New or revised accounting standards and interpretations
Certain new standards, amendments and interpretations to existing standards
have been published that are mandatory for accounting periods beginning on or
after 1 January 2026 and which the Group has chosen not to adopt early. These
include the following standards which may be relevant to the Group:
- Amendments to IFRS 9 and IFRS 7 mandatory for periods commencing
1 January 2026 - Amendments to the Classification and Measurement of Financial
Instruments made to address diversity in accounting practice by clarifying
requirements in two specific areas:
o classification of financial assets with environmental, social and
corporate governance (ESG) and similar features; and
o timing of derecognition of financial liabilities settled through
electronic payment systems.
- IFRS 18 Presentation and Disclosure in Financial Statements
mandatory for periods commencing 1 January 2027. IFRS 18 introduces three key
new requirements:
o specified categories and defined subtotals in the statement of profit or
loss;
o improved principles for aggregation and disaggregation of information; and
o disclosures about management-defined performance measures
As a result of initial review of the new standards, interpretations and
amendments which are not yet effective in these financial statements, none are
expected to have a material effect on the Company or Group's future financial
statements. All IFRS effective at the reporting date of 31 December 2025 have
been applied.
C. Critical accounting estimates and assumptions
Critical judgements in applying the accounting policies
The preparation of the financial statements under IFRS requires the use of
certain critical accounting assumptions and requires management to exercise
its judgement and to make estimates in the process of applying the Company's
and Group's accounting policies. Management bases its estimates on historical
experience and on various other assumptions that management believes to be
reasonable in the circumstances. The key judgements and estimates used in the
preparation of these financial statements that could result in a material
change in the carrying value of assets or liabilities within the next twelve
months are as follows:
Fair values and intangible assets on acquisition of a business
Fair values have been applied on the acquisition of subsidiaries which involve
a degree of judgement and estimation in particular in the identification and
evaluation of intangible assets. The values are derived from the business cash
flow forecasts and assumptions based on experience and factors relevant to the
nature of the business activity.
Useful economic lives of intangible assets
The annual amortisation charge for intangible assets is sensitive to changes
in the estimated useful economic lives of the assets. The useful economic
lives and residual values are re-assessed annually. They are amended when
necessary to reflect current estimates, based on technological advancement,
future investments and economic utilisation. There is no current indication
that the Group's businesses will not continue to trade profitably and hence
the life may differ or be longer than the estimates used to amortise
intangible assets.
Capitalisation of development expenditure
Management have used their judgement in respect of the capitalisation of
development costs against the criteria in the policy. The viability of the
new technology and know-how is supported by the results of testing and by
forecasts for the overall value and margins from future sales to support the
approach taken.
Impairment of intangible assets including goodwill and investments
Investments made by the Company and intangible assets acquired in a business
combination capitalised with goodwill by the Group are subject to annual
impairment tests and other intangibles amortised over their estimated useful
lives subject to an assessment of impairment.
Subsequent impairment tests for investments and intangible assets are based on
risk adjusted future cash flows discounted using appropriate discount rates.
These future cash flows are based on forecasts which include estimated factors
and are inherently judgemental. Future events could cause the assumptions to
change which could have an adverse effect on the future results of the Group.
Further detail including sensitivities is given in note 11.
Right-of-use assets and lease liabilities
In respect of right-of-use leased assets key estimates are a combination of
the incremental borrowing rate used to discount the total cash flows and the
term of the leases where breaks or extensions fall within the Group's control.
These are used to derive both the opening asset value and lease liability as
well as the consequential depreciation and financing charges. A 1% change in
the discount rate used would increase interest charges and decrease
depreciation by approximately £10,000 a year with an immaterial impact on
assets and liabilities.
Provisions
Provisions, by their nature, include an element of estimation of the most
likely outcomes in circumstances where claims have not been able to be fully
evaluated at the reporting date. Whilst they are based on review of support
provided and the terms of customer agreements the final payments may vary from
the claim submitted.
Share based payment
The fair values in respect of share based payments are estimated using a
number of inputs to an appropriate valuation models including the probability
that performance conditions may be met. Further detail of the assumptions
applied is included in note 23.
Notes to the financial statements for the year ended 31 December 2025
1. Revenue and segmental analysis
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 is defined as
per the accounting policies.
Revenue in respect of the setup, 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.
2025 2024
£'000 £'000
By type
Revenue recognised at a point in time 21,863 22,534
Supply of hardware and installation
21,863 22,534
Revenue recognised over time 3,342 3,796
Professional services including project management
Managed service agreement income 52,917 47,818
Other support and maintenance services 5,905 5,327
62,164 56,941
84,027 79,475
By destination:
UK 75,421 72,251
Rest of Europe 2,331 1,966
Rest of the World 6,275 5,258
Total revenue 84,027 79,475
Revenue in respect of one customer amounted to £21.2m representing 25% of the
revenue for the year (2024: £26.1m representing 32% of the revenue).
The chief operating decision maker ("CODM") is identified as the Board. The
Board as the CODM reviews the revenue streams of recurring and non-recurring
revenue as part of their internal reporting.
The directors considered the Group to comprise only one fleet management
services business with a focus on areas within this including geographical
expansion and selling complementary services to the existing customer base.
The Group's non-current assets comprising investments, tangible and intangible
fixed assets and the net assets by geographical location are:
31 December 2025 31 December 2024
Non-current assets Net assets Non-current assets Net assets
£'000 £'000 £'000 £'000
United Kingdom 95,936 65,466 96,952 69,608
France 33 57 13 39
Australia 121 318 7 203
India 207 2,201 209 2,049
96,297 68,042 97,181 71,899
2. Adjusted results and exceptional costs
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
credits included in other operating income above operating loss which 'in line
with common practice' is included in the Group's calculation of EBITDA.
The measure has been adjusted by acquisition related costs, the expense of
major efficiency and cost reduction measures, the material costs of managing
and compensating customers for an unexpected cyber security incident in 2024
and associated insurance proceeds from claims which are considered to be
non-recurring and non-trading in nature together with the share based payment
charge as it represents a non cash item.
The Group was subject to a cyber attack on 31 October 2024 where the actions
to mitigate and contain the attack resulted in a number of customers not
receiving all the managed services they subscribe for in the following 3 week
period. As a result, the Group recorded a number of exceptional costs in 2024
totalling £4,380,000 which arose as follows: £429,000 of professional and
related fees in respect of managing the technical restoration of services;
£1,520,000 reduction in revenue and credit note provisions recorded against
trade receivables in respect of the value of invoiced services not available
to customers in that period; £2,431,000 of provisions were made in respect of
claims for consequential losses from the disruption to the customers' own
businesses.
The Group considers that its related insurance policies largely covered these
liabilities and that it is likely to be reimbursed a materially similar amount
of income in due course once the insurance claims are evaluated and processed.
Insurance proceeds are not considered virtually certain until point of receipt
and therefore determined to be a contingent asset for the purpose of these
financial statements and assets only recognised in the financial period when
specific claims are accepted by insurers.
In 2025, the Group has incurred a further £270,000 of professional fees and
has received £1,153,000 from the insurers in respect of fees incurred and
amounts paid out to customers (which utilised accruals and provisions made in
2024) resulting in a net credit of £883,000 in the year.
In 2025, the Group has been impacted by economic factors and weaker demand and
as a result has implemented major one-off cost reduction measures and
restructuring of staff resources to improve margins with a total cost of
£2,408,000.
In view of the highly material amounts from the cyber incident together with
and the cost reduction measures, the primary income statement has been
presented to show the result before as well as after these exceptional costs.
2025 2024
£'000 £'000
Operating loss before interest and share of associate (2,418) (2,308)
Exceptional costs:
Transaction and subsequent restructuring costs - 403
Cost and efficiency restructuring including severance payments 2,408 -
Cost of managing cyber security incident 270 429
Customer credits for services downtime from cyber incident - 1,520
Cost of other customer claims from cyber incident - 2,431
Cyber incident insurance proceeds received in the year (1,153) -
Depreciation 3,517 3,174
Amortisation of intangible assets 5,024 4,689
Share based payment 698 975
Adjusted EBITDA 8,346 11,313
3. Operating loss
The operating loss is stated after charging/(crediting):
2025 2024
£'000 £'000
Auditors remuneration:
Audit of the Group and Company financial statements 240 338
Depreciation of property, plant and equipment 2,123 1,994
Depreciation of right-of-use assets 1,394 1,180
Amortisation of intangible assets 5,024 4,689
Cost of inventory sold 13,912 13,418
Research and development costs 2,816 2,205
Foreign exchange (gains)/losses (225) 165
Acquisition evaluation costs and expenses - 83
In other operating income: (148) (194)
Other income
Research and Development Expenditure Credit (71) (445)
Cyber incident insurance proceeds (1,153) -
The Group claims RDEC credits which are treated as other operating income and
reflected in the loss before tax.
4. Information regarding directors and employees
Employees
The aggregate remuneration of employees (including severance costs) comprised:
Group Company
Year ended Year ended Year ended Year ended
31 December
31 December
31 December
31 December
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Wages and salaries 40,766 36,794 734 900
Social security costs 4,451 3,591 88 109
Pensions 1,688 1,424 30 27
Share based payment 698 975 297 263
Total 47,603 42,784 1,149 1,299
Average number of employees
The average number of employees in the year was:
Group Company
Year ended Year ended Year ended Year ended
31 December
31 December
31 December
31 December
2025 2024 2025 2024
Sales and distribution 93 88 - -
Operations and development 634 627 - -
Administration 89 90 5 5
Total 816 805 5 5
Directors' remuneration
Year ended Year ended
31 December
31 December
2025 2024
£'000 £'000
Directors' remuneration - aggregate emoluments 706 878
Group pension contributions in respect of 4 30 26
(2024: 4) directors
363
Share based payment
297
1,033 1,267
Remuneration of the highest paid director 316 438
Group pension contributions 12 11
Share based payment 239
205
533 688
Key management compensation
Year ended Year ended
31 December
31 December
2025 2024
£'000 £'000
Short term employee benefits 2,238 2,614
Post employment benefits 96 97
Share based payment 605 747
Total key management remuneration 2,939 3,458
Key management is defined as those persons having authority and responsibility
for planning, directing, and controlling the activities of the Group, directly
or indirectly, including any directors (whether executive or otherwise) of the
Group.
5. Interest receivable
Year ended Year ended
31 December
31 December
2025 2024
£'000 £'000
Interest receivable
Bank interest receivable 268 287
Loan interest receivable 93 165
361 452
6. Interest payable
Year ended Year ended
31 December
31 December
2025 2024
£'000 £'000
Interest payable
Interest and similar charges on bank and other borrowings 79 116
Lease liability financing charges 178 134
Other interest 2 -
259 250
7. Taxation on loss
2025 2024
£'000 £'000
Current taxation
UK corporation tax charge - -
Foreign tax 273 281
Adjustments in respect of previous periods - (75)
273 206
Deferred taxation
Origination and reversal of timing differences (641) (452)
Adjustments in respect of previous periods (16) (35)
(657) (487)
Tax credit on loss (384) (281)
Factors affecting the tax credit for the year
The tax credit on the loss for the year differs from applying the average
standard rate of corporation tax in the UK of 25% (2024: 25%). The
differences are reconciled below:
2025 2024
£'000 £'000
Loss before taxation (2,549) (2,335)
Corporation tax at standard rate (637) (584)
Factors affecting credit for the year:
Disallowable expenses 205 321
Share of loss on disposal of associate/share of associate loss not deductible 58 57
Overseas tax rates 6 35
Adjustments in respect of previous periods (16) (110)
Tax credit on loss (384) (281)
8. Earnings per share
2025 2024
Loss used in calculating EPS (£'000) (2,165) (2,054)
Weighted average number of shares for basic and diluted EPS ('000) 115,946 115,946
Weighted average number of shares for diluted EPS ('000) 115,946 115,946
Basic earnings per share (pence) (1.87) (1.77)
Diluted earnings per share (pence) (1.87) (1.77)
There were 4,059,193 unexercised share options in place at 31 December 2025
(2024: 4,276,815) of which 236,017 were potentially dilutive in respect of the
year (2024: 239,462). They would not increase the loss per share and
accordingly the basic and diluted loss per share are equal.
9. Dividends
2025 2024
£'000 £'000
Final dividend of 1.24p per share paid in respect of FY24 (1.725p per share 1,438 2,000
for FY23)
Interim dividend of 0.60p per share paid in respect of FY25 (0.57p per share 695 661
for FY24)
2,133 2,661
The directors have proposed a final dividend for FY25 of 1.30p per share to be
paid on 24 July 2026.
10. Property, plant and equipment
Group Freehold property Right-of-use property Leasehold building Improvements Right-of-use equipment Equipment, fixtures and fittings Total
£'000 £'000 £'000 £'000 £'000 £'000
Net book value
At 1 January 2024 4,736 727 14 790 2,680 8,947
Cost
At 1 January 2024 5,271 2,056 289 1,703 7,158 16,477
Additions - 228 3 178 1,418 1,827
Acquisitions - 410 - 108 588 1,106
Disposals - (844) (320) (216) (1,380)
Exchange adjustments - - (3) - (6) (9)
At 31 December 2024 5,271 1,850 289 1,669 8,942 18,021
Depreciation
At 1 January 2024 535 1,329 275 913 4,478 7,530
Charge for the year 102 803 - 377 1,892 3,174
Disposals - (844) (320) (214) (1,378)
Exchange adjustments - - (3) - (4) (7)
At 31 December 2024 637 1,288 272 970 6,152 9,319
Net book value
At 31 December 2024 4,634 562 17 699 2,790 8,702
Cost
At 1 January 2025 5,271 1,850 289 1,669 8,942 18,021
Additions - 142 - 3,837 2,478 6,457
Disposals - (144) - (1,458) (1,036) (2,638)
Exchange adjustments - - (32) - (59) (91)
At 31 December 2025 5,271 1,848 257 4,048 10,325 21,749
Depreciation
At 1 January 2025 637 1,288 272 970 6,152 9,319
Charge for the year 102 226 1 1,168 2,020 3,517
Disposals - (144) - (1,458) (1,034) (2,636)
Exchange adjustments - - (31) - (48) (79)
At 31 December 2025 739 1,370 242 680 7,090 10,121
Net book value
At 31 December 2025 4,532 478 15 3,368 3,235 11,628
Company Freehold property
£'000
Cost
At 31 December 2024 and 2025 4,965
Accumulated depreciation
At 31 December 2024 331
Charge for the year 102
At 31 December 2025 433
Net book value
At 31 December 2025 4,532
At 31 December 2024 4,634
11. Intangible assets
Technology - business combinations Total business combination assets
Customer relationships Developed technology
Goodwill Brands Software Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Net book value
At 1 January 2024 54,291 12,349 2,951 1,774 71,365 4,438 425 76,228
Cost
At 1 January 2024 54,291 18,186 6,868 2,711 82,056 7,254 864 90,174
Additions - - - - - 2,678 87 2,765
Acquisitions (note 27) 5,902 1,837 1,552 319 9,610 - - 9,610
At 31 December 2024 60,193 20,023 8,420 3,030 91,666 9,932 951 102,549
Amortisation
At 1 January 2024 - 5,837 3,917 937 10,691 2,816 439 13,946
Charge for the year - 1,376 1,164 284 2,824 1,725 140 4,689
At 31 December 2024 - 7,213 5,081 1,221 13,515 4,541 579 18,635
Net book value
At 31 December 2024 60,193 12,810 3,339 1,809 78,151 5,391 372 83,914
Cost
At 1 January 2025 60,193 20,023 8,420 3,030 91,666 9,932 951 102,549
Additions - - - - - 2,653 130 2,783
Exchange adjustments - - - - - - (2) (2)
At 31 December 2025 60,193 20,023 8,420 3,030 91,666 12,585 1,079 105,330
Amortisation
At 1 January 2025 - 7,213 5,081 1,221 13,515 4,541 579 18,635
Charge for the year - 1,380 1,000 288 2,668 2,235 121 5,024
Exchange adjustments - - - - - - (2) (2)
At 31 December 2025 - 8,593 6,081 1,509 16,183 6,776 698 23,657
Net book value
At 31 December 2025 60,193 11,430 2,339 1,521 75,483 5,809 381 81,673
All the goodwill is now considered to relate to the Microlise cash generating
unit, following integration of acquired businesses into Microlise Limited as
explained in note 1 above.
The Group tests goodwill annually for impairment, or more frequently if events
or changes in circumstances indicate that the asset might be impaired. The
Microlise carrying value is assessed for impairment purposes by calculating
the value in use using the net present value (NPV) of future cash flows
discounted at a post-tax rate of 12.8% (2024: 12.7%).
The Microlise goodwill has been tested by reference to a 3 year management
approved forecast with a 2% long term growth rate considered applicable to the
UK market applied to the terminal period. Where general inflation assumptions
have been required, these have been estimated based on externally sourced
data. General inflation assumptions of 2% to 3% have been included in the
forecast.
No impairment is indicated although they are sensitive to forecast increases
in EBITDA. Whilst the business did not meet the FY25 forecast used in the
prior year test significant cost reductions have been implemented that
underpin future forecasts. The Microlise NPV including all group trade for the
2025 test exceeds carrying values by £16m (2024: £25m) with the decrease
reflecting a small reduction in projected net margins. The post-tax discount
rate would need to increase from 12.8% to 16.0% in order for the cash
generating unit's recoverable amount to be equal to its carrying amount. The
long term growth rate would need to reduce from a growth rate of 2% to a
contraction rate of 2.2% in order for the cash generating unit's recoverable
amount to be equal to its carrying amount.
12. Investments and loan receivables
Group Associate
£'000
At 1 January 2024 1,593
Share of loss for the year (229)
At 31 December 2024 1,364
Conversion of convertible loan 1,230
Disposal of interest in associate (2,594)
At 31 December 2025 -
Company Subsidiary undertakings Associate Total
£'000 £'000 £'000
At 1 January 2024 81,455 1,550 83,005
Additions 11,436 - 11,436
Additions - fair value of share options held by subsidiary company employees 728 - 728
Increase in fair value - (1,075) (1,075)
At 31 December 2024 93,619 475 94,094
Additions - fair value of share options held by subsidiary company employees 401 - 401
Conversion of convertible loan - 1,230 1,230
Disposals - (475) (475)
At 31 December 2025 94,020 - 94,020
Subsidiary undertaking Principal activity Class of % share
shares held
holding
Microlise Limited Transport management technology solutions Ordinary 100%
Microlise Holdings Limited Intermediate holding company Ordinary 100%
Microlise Engineering Limited Non trading company Ordinary 100%
TruTac Limited Dormant company Ordinary 100%
Enterprise Software Solutions Limited Dormant company Ordinary 100%
Microlise Pty Limited (Australia) Transport management technology solutions Ordinary 100%
Microlise SAS (France) Transport management technology solutions Ordinary 100%
Microlise Telematics Private Limited (India) Transport management technology solutions Ordinary 100%
Microlise India Private Ltd Non trading company Ordinary 100%
All the UK subsidiary companies are registered in England at the same
registered office as the Company. Microlise Pty Limited is registered at Level
1, 20 Albert Street, Blackburn, Victoria, 3130 Australia, Microlise SAS at Les
Hauts de la Duranne, 505 Avenue Galilee, 13290 Aix-en-Provence, France,
Microlise Telematics Private Limited and Microlise India Private Limited at
4(th) Floor, Pride Accord, Baner Road, Pune, 411045, India.
The Group agrees to guarantee the liabilities of Microlise Engineering Limited
(02211125), TruTac Limited (02521511) and Enterprise Software Systems Limited
(03374336) thereby allowing them to take exemption from having an audit under
section 479A of the Companies Act 2006.
Investments in associates consisted of a 20% holding in Trakm8 Holdings plc
acquired on 22 December 2018 and measured in accordance with the accounting
policy. The company was listed on AIM and at 31 December 2024 the market value
of the shareholding was £0.475m. The shareholding was sold 9 July 2025 as
part of a recommended cash acquisition of Trakm8 Holdings plc by Brillian UK
Limited at an acquisition price of 9.5 pence per share and Trakm8 Holdings plc
delisted 10 July 2025. The Group received disposal proceeds of £2,180,000 and
recognised a loss on disposal of £414,000.
The primary business of Trakm8 Holdings plc is the development, manufacture,
distribution and sale of telematics devices, services and optimisation
solutions. The principal place of business is 4 Roman Park, Roman Way,
Coleshill, Birmingham, West Midlands, B46 1HG.
The Group also has an interest of £1 in a jointly controlled not for profit
community investment company, Road to Logistics C.I.C. This had commenced
activity funded by a government grant and incurs neither a profit nor a
loss. The principal place of business is Access House, Halesfield 17,
Telford, England, TF7 4PW.
Summarised financial information (material associates)
Trakm8 Holdings plc
Trakm8 Holdings plc has a year end of 31 March, and the summarised financial
information disclosed was based on their published annual statements to 31
March 2024 together with unaudited interim financial statements to 30
September 2024, prepared under IFRS.
30 September
2024
£'000
Assets - non-current 27,260
Assets - current 7,168
Liability - non-current (2,549)
Liability - current (13,789)
Net assets (100%) 18,090
Group share of book net assets (20%) 3,618
The differing carrying value above reflects the equity accounting policy
applied.
Year ended
30 September
2024
£'000
Revenues 15,863
Loss from continuing operations (1,180)
Other comprehensive income 13
Total comprehensive expense (1,167)
The Company also advanced £1,000,000 to Trakm8 Holdings plc in September
2022. This was a convertible loan bearing interest at 18% (2024: 18%) which
was converted 9 July 2025 at a conversion rate of 8.1 pence per share as part
of the cash acquisition of Trakm8 Holdings plc by Brillian UK Limited. The
Group and Company recognised a gain on conversion of £181,000.
Group and company
£'000
At 31 December 2024 1,000
Interest accrued 49
Converted in year (1,049)
At 31 December 2025 -
13. Inventories
Group 31 December 31 December
2025 2024
£'000 £'000
Raw materials and consumables 896 1,853
Work in progress 20 20
Finished goods and goods for resale 1,837 1,339
2,753 3,212
An impairment loss of £122,000 in respect of inventory was recorded in the
year ended 31 December 2025 (2024: £17,000).
14. Trade and other receivables
Group Company
31 December 31 December 31 December 31 December
2024
2024
2025 2025
£'000 £'000 £'000 £'000
Current
Trade receivables 10,206 16,232 - -
Provision for impairment of trade receivables (417) (276) - -
Trade receivables net 9,789 15,956 - -
Contract cost assets 2,174 2,579 - -
Other receivables 414 166 - -
Prepayments 3,613 2,403 375 51
Total 15,990 21,104 375 51
Non-current
Trade receivables 91 113 - -
Contract cost assets 2,905 3,088 - -
Total 2,996 3,201 - -
Total 18,986 24,305 375 51
Analysis of expected credit losses is included in note 20.
The movements in Group contract related balances in the year are as follows:
Year Year
ended ended
31 December
31 December
2025 2024
Contract cost assets £'000 £'000
Opening balance 5,667 3,919
Amortised to income statement (4,129) (1,425)
Incurred in the year 3,541 3,173
Closing balance 5,079 5,667
15. Cash and cash equivalents
Group Company
31 December 31 December 31 December 31 December
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Cash at bank and in hand 16,743 11,401 229 55
16. Lease liabilities
Group Company
31 December 31 December 31 December 31 December
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Current 1,188 809 - -
Non-current 2,689 500 - -
Total 3,877 1,309 - -
Leases
The group has entered into lease contracts in respect of property in the
jurisdictions from which it operates, use of data centres and vehicles which
are typically for terms of 3 to 5 years. In respect of data centre contracts
there are options to extend the initial period with these factored into the
liabilities where the group plans to use these for a longer period. For
property leases, it is customary for lease contracts to be reset periodically
to market rental rates. Leases of equipment, data centre usage and vehicles
comprise only fixed payments over the lease terms.
Right of use assets, additions and amortisation are included in note 10.
Interest expenses relating to lease liabilities are included in note 6.
Other amounts relating to leases were as follows:
31 December 31 December
2025 2024
£'000 £'000
Short term lease expense 298 317
Total cash outflow for leases 1,589 1,284
The maturity of lease liabilities at 31 December 2025 were as follows:
Property Equipment and vehicles Total
£'000 £'000 £000
Within 1 year 240 948 1,188
1-2 years 122 927 1,049
2-5 years 141 1,499 1,640
Total 503 3,374 3,877
The maturity of lease liabilities at 31 December 2024 were as follows:
Property Equipment and vehicles Total
£'000 £'000 £000
Within 1 year 298 511 809
1-2 years 132 80 212
2-5 years 267 21 288
Total 697 612 1,309
17. Trade and other payables
Group Company
31 December 31 December 31 December 31 December
2024
2024
2025 2025
£'000 £'000 £'000 £'000
Current
Trade payables 3,463 3,798 246 12
Taxation and social security 2,843 3,208 38 35
Amounts owed to group undertakings - - 23,255 22,166
Other payables 914 874 7 4
Accruals 7,136 5,827 359 1,094
Contract liabilities 20,791 22,702 - -
Total 35,147 36,409 23,905 23,311
Non-current
Contract liabilities 17,742 16,051 - -
Total 17,742 16,051 - -
Total 52,889 52,460 23,905 23,311
The carrying amounts of trade and other payables are considered to be the same
as their fair values, due to their short-term nature. Contract liabilities
relates principally to service income received in advance. The timing of
recognition of Group contract liabilities are as follows:
Less than one year 1-2 years 2-3 years 3-4 years 4-5 years Total
At 31 December 2025 £'000 £'000 £'000 £'000 £'000 £'000
Contract liabilities 20,791 7,312 5,644 3,654 1,132 38,533
Less than one year 1-2 years 2-3 years 3-4 years 4-5 years Total
At 31 December 2024 £'000 £'000 £'000 £'000 £'000 £'000
Contract liabilities 22,702 7,584 4,191 3,033 1,243 38,753
The movements in Group contract related balances in the year are as follows:
Year Year ended
31 December
ended
31 December 2024
2025
£'000 £'000
Revenue related contract liabilities
Opening balance (38,753) (34,482)
Invoiced in the year (52,697) (52,089)
Recognised as revenue in the year 52,917 47,818
Closing balance (38,533) (38,753)
18. Deferred tax assets and liabilities
Deferred tax assets/(liabilities) are as follows:
Group Intangible assets Accelerated capital allowances Freehold property Tax losses Other Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2024 (5,334) (475) (1,113) 884 416 (5,622)
On acquisition (927) (147) - - - (1,074)
RDEC credit carried forward - - - - 99 99
Foreign exchange movement - - - - (4) (4)
Credit/(charge) for the year 911 88 27 (460) (79) 487
At 31 December 2024 (5,350) (534) (1,086) 424 432 (6,114)
RDEC credit carried forward - - - - 3 3
Foreign exchange movement - - - - (10) (10)
Credit/(charge) for the year 1,059 (146) 25 (341) 60 657
At 31 December 2025 (4,291) (680) (1,061) 83 485 (5,464)
Company
Other
£'000
At 31 December 2024 1
Credit for the year 1
At 31 December 2025 2
Deferred tax has been recognised at a rate of 25% (2024: 25%).
19. Provisions
Group
£'000
At 31 December 2023 -
Charge for the year 2,862
At 31 December 2024 2,862
Utilised in the year (251)
At 31 December 2025 2,611
As explained in note 2, the provisions arose as a result of a cyber-attack
incident in October 2024 which impacted customer services. The amount provided
for, represents an estimate based on the claims submitted by customers for
consequential losses from the disruption caused during the time services were
not available to them. It is expected to be settled within the next year.
The provision includes uncertainties around the amounts that certain claims
will be settled at, based on the nature of the claim, the contractual
arrangement and the evidence provided to support the claim. Independent legal
advice has been sought to estimate the most likely outcome of the claim by
applying a probability factor. A 5% increase in the probability factor applied
would increase the provision recognised by £174,000.
A related contingent asset for insurance income has been disclosed in note 25.
It is expected that the insurance proceeds will largely meet the liability and
which is recognised as other income as claims are settled by the insurer.
20. Financial Instruments
Financial risk management
The determination of financial risk management policies and the treasury
function is managed by the CFO. Policies are set to reduce risk as far as
possible without unduly affecting the operating effectiveness of the Group.
The Group's activities expose it to a variety of financial risks, the most
significant being credit risk, liquidity risk and interest rate risk together
with a degree of foreign currency risk as discussed below.
Categories of financial instruments
The Group has the below categories of financial instruments:
31 December 31 December
2025 2024
Recognised at amortised cost £'000 £'000
Cash and bank balances 16,743 11,401
Trade receivables - net 9,880 16,069
Other receivables 414 1,166
Total financial assets 27,037 28,636
Trade payables 3,463 3,798
Other payables 8,050 6,701
Lease liabilities 3,877 1,309
Provisions 2,611 2,862
Total financial liabilities 18,001 14,670
There were no assets or liabilities at 31 December 2025 or 2024 that were
recognised and measured at fair value in the historical financial information.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss for the Group. Financial
instruments, which potentially subject the Group to concentration of credit
risk, consist primarily of cash and cash equivalents and trade accounts
receivable including accrued income.
The Group places its cash and cash equivalents with major financial
institutions, which management assesses to be of high-credit quality in order
to limit the exposure of each cash deposit to a minimal level.
Trade receivables
Trade accounts receivable are derived primarily from non-recurring hardware
sales and monthly service income and generally have 30-60 day terms. With the
exception of one large customer who accounts for 28% (2024: 22%) of the trade
receivable invoiced balance, credit risk with respect to accounts receivable
is dispersed due to the large number of customers. Collateral is not required
for accounts receivable. The credit worthiness of customers with balances in
trade receivables not yet due has been assessed as high.
The aging of past due trade receivables according to their original due date
is detailed below:
31 December 31 December
2025 2024
Past due £'000 £'000
0-60 days 3,006 4,295
60-120 days 353 788
121+ days 2,461 1,132
Expected credit loss provision (417) (276)
Total 5,403 5,939
A majority of the expected credit loss provision relates to balances that are
more than 120 days overdue. The expected credit loss on balances less than 120
days is immaterial. A substantial majority of the overdue debt has been
collected since the period end date with the unprovided amounts considered to
be collectible.
The expected credit loss provision relates to specific customers based on
credit information available at the year end.
A lifetime expected loss provision has been assessed on the remaining balance
of trade receivables based on historical credit losses across the customer
base and this is considered immaterial.
At each of the Statement of Financial Position dates, a portion of the trade
receivables were impaired and provided for. The movement in the provision for
trade receivables in each of the periods is as follows:
Year Year
ended ended
31 December
31 December
2025 2024
£'000 £'000
At start of year 276 457
Provision charged 225 -
Utilised (84) (181)
At year end 417 276
Oher receivables are considered to bear similar risks to trade receivables or
are owed by government bodies. Hence any expected credit loss on other
financial assets is considered to be immaterial.
Liquidity risk
The Group now funds its business through equity and from cash generated from
operations and also has a £10m undrawn working capital facility available.
The Group monitors and manages cash to mitigate any liquidity risk it may
face. The following table shows the Group's contractual maturities of
financial liabilities based on undiscounted cash flows including interest
charges and the earliest date on which the Group is obliged to make repayment:
Less than one year 1-2 years 2-5 years Total
At 31 December 2025 £'000 £'000 £'000 £'000
Trade and other payables 11,375 - - 11,375
Lease liabilities 1,434 1,215 1,766 4,415
Total 12,809 1,215 1,766 15,790
Less than one year 1-2 years 2-5 years Total
At 31 December 2024 £'000 £'000 £'000 £'000
Trade and other payables 10,495 - - 10,495
Lease liabilities 892 241 291 1,424
Total 11,387 241 291 11,919
Interest rate risk
There are no borrowings or liabilities subject to variable interest rates.
Currency risk
The Group operates predominantly in the UK with sterling being its functional
currency and has a degree of exposure to foreign currency risk, with this
spread across income and expenses in Euros, US dollars and Australian dollars
for sales and purchasing operations together with an outflow only of Indian
rupees for the costs of development and operational support activity. The
impact of a 10% fluctuation in all foreign exchange rates moving in the same
direction against GBP has been assessed to be an overall impact of up to
£200,000 which would be mitigated by some matching of income and expenses.
The net exposure to the dollar is offset by significant purchases made in
dollars. The net underlying foreign currency balances, comprising overseas
assets and liabilities, cash, receivables and payables in the UK, in the Group
statement of financial position by underlying currency at the period end were:
USD Euro AUD INR Total
£'000 £'000 £'000 £'000 £'000
At 31 December 2025 424 537 489 467 1,917
At 31 December 2024 189 512 84 433 1,218
Capital management
The Group's capital comprises share capital, share premium and retained
earnings. The Group's objectives when maintaining capital are:
To safeguard the entity's ability to continue as a going concern, so that it
can continue to provide returns for shareholders and benefits for other
stakeholders and to provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk.
The capital structure of the Group consists of shareholders equity as set out
in the consolidated statement of changes in equity. The longer-term funding
requirements for acquisitions were financed from cash reserves and term bank
debt which was fully repaid from the equity proceeds on listing. All working
capital requirements are financed from existing cash resources.
The Group sets the amount of capital it requires in proportion to risk in
conjunction with the retained earnings. The Group manages its capital
structure and makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets. In order to
maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new
shares, or sell assets to reduce debt.
21. Pensions
Defined contributions pension scheme
The group operates a number of defined contribution pension schemes.
Contributions totalling £429,000 (2024: £347,000) were included in payables
and due to the defined contribution schemes at the end of the year. The total
contributions are disclosed in note 4.
22. Share capital
Group and Company
Allotted, called up and fully paid At At
31 December
31 December
2025 2024
£ £
115,945,956 ordinary shares of £0.001 each 115,946 115,946
All shares rank equally in respect of income and capital distributions.
23. Share based payments
Options Weighted average exercise price Number
At 1 January 2024 £0.38 3,701,974
Granted in the year £0.11 1,534,959
Lapsed in the year £0.08 (960,118)
At 31 December 2024 £0.35 4,276,815
Granted in the year £0.00 1,452,472
Lapsed in the year £0.12 (1,953,113)
At 31 December 2025 £0.34 3,776,174
The Company grants share options under both an executive long term incentive
plan scheme, typically at an exercise price of £0.001 per option and also to
employees at an exercise price equal to the market price at date of grant
which has been £1.48 and £1.54 for the two tranches granted to date.
1,297,550 of the options relating to the general employee scheme were
exercisable as of 31 December 2025.
The Company granted 1,430,342 options on 11 March 2024 to executive employees
at an exercise price of £0.001 per share. They are exercisable from 31
December 2026 with 10% subject to carbon reduction targets and 90% subject to
a Total Shareholder Return condition for the three years from 1 January 2024
of a minimum of a median growth in the share price compared to a comparator
group up to highest growth in the group for 100% to be exercised. The fair
value of the carbon reduction target options has been assessed at an average
fair value of £1.19 per option using a Black Scholes model and the TSR
options at £0.78 using a Monte Carlo model, both applying a volatility of
46%, risk free rates of 4.20% and a dividend yield of 1.51%
104,617 options were granted to employees on 16 May 2024 at an exercise price
of £1.54 subject to a 3 year vesting period only. The fair value was assessed
as £0.49 per option using a Black Scholes model with a volatility of 45%,
risk free rates of 4.10% and a dividend yield of 1.51%.
The Company granted 1,452,472 options on 19 June 2025 to executive employees
at an exercise price of £0.001 per share. They are exercisable from 31
December 2027, subject to a holding period of 2 years, with 10% subject to
carbon reduction targets, 45% subject to an earnings per share target and 45%
subject to a Total Shareholder Return condition for the three years from 1
January 2025 of a minimum of 8% annual growth in the share price up to an 18%
return for 100% to be exercised. The fair value of the carbon reduction target
options and the earnings per share condition options have been assessed at an
average fair value of £0.91 per option using a Black Scholes model and the
TSR options at £0.49 per option using a Monte Carlo model, applying a
volatility of 44.7%, risk free rates of 3.9% and a dividend yield of 1.76%
The average vesting period for all options is estimated at 3 years and the
share based payment charge was £698,000 for the year (2024: £975,000). The
weighted average remaining vesting period is 1.5 years (2024: 1.0 year).
24. Capital commitments
The Group had capital commitments contracted but not provided for of £438,000
at 31 December 2025 (2024: £25,000). The company had no capital commitments
(2024: £nil).
25. Contingencies
As disclosed in note 2, the Group was the target of a cyber-attack in 2024.
Investigations to date have identified that some limited employee data and
corporate data was impacted by the incident, but no customer systems data was
compromised. Discussions with the Information Commissioner's Office (ICO) have
concluded and they have closed their investigation with no penalties arising
but is subject to new information coming to light and/or identification that
there has been detriment to any data subjects. The potential impact on the
Group of any future customer claims arising are still subject to a number of
significant uncertainties and therefore, any assessment of the likely outcome
or quantum cannot be made at the date of disclosure. In 2024, the Group
incurred exceptional costs for professional and related fees in respect of
managing the technical restoration of services and provided for customer
claims. The Group considers that its related insurance policies cover these
liabilities and that it is likely to be reimbursed a materially similar amount
of income in due course once the insurance claims are evaluated and processed.
Confirmation that the policies cover the circumstances was received during the
period. Insurance proceeds are not considered virtually certain until point of
receipt and therefore determined to be a contingent asset for the purpose of
these financial statements and assets only recognised in the financial period
when specific claims are accepted by insurers.
26. Related party transactions
The remuneration of key management personnel and directors is set out in note
4 and transactions with the former associate in note 12.
27. Business combinations
Prior year combination
On 10 January 2024, the group acquired 100% of Enterprise Software Systems
Limited ('ESS'), a leading provider of transportation management system
solutions. The acquisition is expected to further expand Microlise's suite
of transport technology solutions. The total consideration of £11,436,000
included £850,000 of deferred consideration paid six months after the date of
acquisition. The acquisition was funded from the Group's cash resources and
the identifiable assets acquired included £4,373,000 of cash of which
£3,500,000 was considered to be excess cash. The goodwill arising of
£5,902,000 is attributable to the workforce, synergies and expected future
growth in customers and earnings. The transaction has been accounted for under
the purchase method of accounting. The principal adjustments are in respect of
the intangible fixed assets of £3,708,000 acquired in relation to the brand,
technology and customer relationships, together with the related deferred
taxation liability of £927,000.
The brand acquired is valued at £319,000 on a relief from royalty method and
with a deemed useful life of 3 years and technology acquired is valued at
£1,552,000, valued on a cost savings method with a deemed useful life of 5
years. Customer relationships have been valued at £1,837,000 using a
multi-period excess earnings method approach, with a useful life of 10 years
assumed in line with the existing trends.
Synergies are expected to arise by combining the management of operations and
providing a broader service offering to all Group customers with the trade and
assets of ESS transferred to Microlise Limited on 31 May 2024 and as such it
is not possible to separately identify the post acquisition results. Had ESS
been consolidated from 1 January 2024, the additional contribution to results
from 10 days trading would have been negligible.
The fair value of the assets and liabilities acquired were as follows:
Book value Fair value adjustments Fair value
£'000 £'000 £'000
Intangible assets - customer, tradename, technology 3,708
- 3,708
Property, plant and equipment 1,106 - 1,106
Cash and cash equivalents 4,373 - 4,373
Receivables 1,032 - 1,032
Payables (3,043) - (3,043)
Lease liabilities (500) - (500)
Corporation tax (68) - (68)
Deferred tax (147) (927) (1,074)
5,534
Goodwill 5,902
Cash consideration paid in the year 11,436
The cash outflow, net of cash acquired, at the date of acquisition was
£6,295,000 with £850,000 of deferred consideration payable in January 2025.
The deferred consideration has not been discounted on the basis of
materiality.
Acquisition costs of £0.3m were incurred relating to the acquisition with
£0.2m incurred and expensed in the year ended 31 December 2023 and £0.1m in
the year ended 31 December 2024. Other than the acquisition costs the
acquisition was not included in the reported results for the year ended 31
December 2023.
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://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 (https://www.lseg.com/privacy-and-cookie-policy)
. END FR AKNBDFBKDCPD
Copyright 2019 Regulatory News Service, all rights reservedRecent news on Microlise
See all newsREG - Microlise Group PLC - Results for the year ended 31 December 2025
AnnouncementRCS - Microlise Group PLC - Announcement of Kings Award
AnnouncementREG - Microlise Group PLC - Notice of Results
AnnouncementREG - Microlise Group PLC - Director/PDMR/PCA Shareholding & TR-1 Notification
AnnouncementREG - Microlise Group PLC - Full Year 2025 Trading Update & Notice of Results
Announcement