REG - Software Circle PLC - £25.0m Revolving Credit Facility & Trading Update

Software CircleAnnouncement

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RNS Number : 1686F  Software Circle PLC  21 May 2026

Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information as stipulated under the
UK Market Abuse Regulation. With the publication of this announcement, this
information is now considered to be in the public domain.

 

21 May 2026

Software Circle plc

 

("Software Circle", the "Group" or "Company")

 

£25.0m Revolving Credit Facility and Trading Update

 

 

Software Circle plc (AIM: SFT) is pleased to announce that it has entered into
a new committed revolving credit facility (the "Facility") with Santander UK
plc ("Santander") and makes the following pre-close statement and trading
update for the year ended 31 March 2026 ("FY26"), including financial
information which remains subject to audit.

 

£25.0m Revolving Credit Facility

 

The Facility comprises a committed £25.0 million revolving credit facility
and a £10.0 million uncommitted accordion option, exercisable subject to
Santander's credit committee approval. £10.7m of the Facility has been
utilised to redeem the Group's pre-existing borrowing facilities with
Shawbrook Bank Limited ("Shawbrook"). The Facility has a four-year term with a
one-year extension option. Interest is payable on a ratchet of between 2.00%
and 3.00% over SONIA depending on the Group's leverage. The Facility is
repayable on 20 May 2030 (or 20 May 2031 if extended) and is subject to
customary arrangement and non-utilisation fees, financial covenants and
security arrangements for facilities of this nature.

 

The Facility has been used to refinance the Group's pre-existing facilities
with Shawbrook, with the balance available to support the continued execution
of Software Circle's acquisition strategy.

 

Gavin Cockerill, Chief Executive Officer of Software Circle, commented: "We
are pleased to welcome Santander as Software Circle's new banking partner. I
would also like to thank Shawbrook for their strong support over the course of
our relationship.

 

The move to this new facility is a reflection of Software Circle's growth and
the successful execution of our strategy to date. With the Group now at
greater scale, the time is right to move to a more flexible facility, reducing
our cost of capital and providing the headroom to continue our strategy to
acquire and operate vertical market software businesses in the UK and Ireland.

 

Having surpassed our "Gate 4" goal of achieving £5 million of annualised
Adjusted EBITDA(2), the Facility will help fund our journey towards our "Gate
5" goal of achieving £15 million of annualised Adjusted EBITDA."

 

Jack Buck, Relationship Director, and Sarah Laverty, Director, Structured
Finance, Santander, commented: "Software Circle has a clear and disciplined
approach to acquiring and nurturing specialist software businesses. Having
taken the time to understand its business model and the ambitions of Gavin,
Iain and the wider management team, we are delighted to support the next phase
of its growth with a flexible funding structure designed around its long-term
strategy."

 

Trading Update

 

The Group has delivered another year of strong progress, with revenue growth
of 22%, a meaningful step-up in profitability with an 81% growth in Adjusted
EBITDA and the continued successful execution of its acquisition strategy. An
Adjusted EBITDA margin of 26% exceeds the 25% target previously communicated,
and the Group has continued to strengthen its capital base, including the
refinancing of its borrowing facilities, announced today.

 

Revenue

 

Revenue for FY26, including that from businesses acquired during the year, was
approximately £22.3m (FY25: £18.3m), an increase of 22% on the prior year.

 

Group organic revenue declined slightly by 1% in the year, reflecting a
reduction in non-recurring revenue at Nettl Systems, the Group's pre-existing
operating business. However, the ten software businesses acquired under the
Group's buy and build strategy delivered organic revenue growth of 7%,
reflecting healthy underlying demand across the acquired portfolio.

 

Profitability

 

Group Operating EBITDA(1) measures the profitability of our collective
operating units. Despite the small decline in organic revenue noted above,
organic Operating EBITDA is expected to grow by 19%, improving Operating
EBITDA margin to 34% (FY25: 26%).

 

Acquisitions are expected to have contributed a further £1.8m of Operating
EBITDA, increasing total Operating EBITDA by 58% to £7.6m (FY25: £4.8m).

 

After central administration costs of approximately £1.8m (FY25: £1.6m),
Adjusted EBITDA is expected to have increased by 81% to £5.8m (FY25: £3.2m),
resulting in an improved Adjusted EBITDA margin of 26% (FY25: 17%).

 

Operating Cash Flow Per Share ("OCFPS")

 

OCFPS is our primary long-term measure because it captures, in a single
measure, the cash generated by our businesses and the discipline with which we
deploy shareholders' capital. We expect this measure for FY26 to be 1.0p
(FY25: 0.5p). The doubling year on year reflects the substantial growth in
Adjusted EBITDA being delivered and the Group's strong cash conversion
characteristics.

 

Outlook

 

On a run-rate basis and before any further M&A, the Group is currently
generating annualised revenue of approximately £25.0m at an Adjusted EBITDA
margin of 27%. The Group has a current cash balance of approximately £4.6m
and, following the refinancing announced today, an undrawn, committed debt
facility of £14.3m. With a healthy M&A pipeline, our focus is on Gate 5
and building a Group capable of sustaining its own growth through internally
generated cash flow. With strong recurring revenues, healthy underlying
operational performance across a growing portfolio of operating businesses,
and disciplined capital allocation, we expect to compound shareholder value
over the long term.

 

Artificial Intelligence

 

AI is reshaping the way software is built and the expectations customers have
of the tools they use. We recognise the questions this raises for incumbent
software businesses. Often the narrative has ignored the necessary nuance.
Vertical software embedded in mission-critical, regulated workflows is a
different proposition to horizontal, generic software where features can be
easily replaced. Either way, the change AI brings is fast paced and
inevitable. What we see is real opportunity and our AI strategy is progressing
well.

 

We are evolving our products from systems of record to systems of action.
Software that executes tasks, automates workflows and delivers measurably
better outcomes for our customers. Our businesses combine proprietary data,
deep vertical specialism and domain expertise with long-standing, trusted
customer relationships in mission-critical, regulated workflows, often
economically and operationally entangled with the moment value is exchanged.
We believe this combination, paired with the thoughtful and disciplined
deployment of AI builds durable software businesses. The details of our
ongoing AI strategy will be set out in our forthcoming annual report.

 

Finally, we would like to thank every team member across the Group for their
focus and execution. A particular welcome to the new colleagues who have
joined Software Circle during the year, and our thanks to them for the
professionalism with which they have managed the transition into the Group.
Together, their work continues to strengthen the foundations of a resilient,
cash-generative and enduring software group.

 

The Company intends to release its detailed full year results for the period
ended 31 March 2026 during July.

 

For further information:

 

Software Circle plc

Gavin Cockerill (CEO)                       via
investors@softwarecircle.com

 

Allenby Capital Limited (Nominated Adviser and
broker)                          0203 328 5656

David Hart / Liz Kirchner (Corporate Finance)

Joscelin Pinnington / Amrit Nahal (Sales and Corporate Broking)

 

Notes:

 

1.     Operating EBITDA = Earnings before interest, tax, depreciation and
amortisation (EBITDA) before impairments, share option charges, exceptional
costs, acquisition related costs, central administration costs and the
capitalisation of qualifying development costs

 

2.     Adjusted EBITDA = Operating EBITDA less central administration
costs

 

Notes to editors:

 

Software Circle plc (AIM: SFT) has a mission: to be a leading serial acquirer
and operator of Vertical Market Software businesses in the UK and Ireland - a
permanent home for software leaders, teams, and customers. These are
mission-critical systems, deeply embedded in the day-to-day workflows of
users.

 

We help founders find the right exit strategy, acquiring businesses at
appropriate valuations, supporting their organic growth over time, and
reinvesting the free cash flow they generate into further value-accretive
opportunities. We are building a group that gives shareholders diversified
exposure to these software businesses, with discipline, alignment, and
operational know-how.

 

Software Circle continues operations in an independent, decentralised way, and
maintains the entrepreneurial spirit and culture that exists in the businesses
acquired, enabling organic growth to be driven. Our goal is to create an
environment where motivated teams can do their best work for the benefit of
the most important stakeholder: the end customer.

 

For more information visit www.softwarecircle.com.

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