Microlise Group, the Nottingham-based provider of transport technology solutions to fleet operators, has hailed “solid trading” during its first half, in line with management expectations.
In a half year update on trading for the six months to 30 June 2023, the businsss saw continued growth in revenue, recurring revenue, ARR and profitability.
As a result, revenue for the first half of the year is expected to show growth of 10% to £33.9m, up from £30.7m in the same period last year, with anticipated adjusted EBITDA growth of 4% to £4.5m, up from £4.3m.
Microlise’s main growth driver in the period was increased demand from OEM customers, contributing to ARR growth of 11%, of which 10.2% represented organic growth, to £44.8m.
New vehicle delays continued to slow down deliveries to direct customers resulting in an order backlog increase of 95%, which is expected to be delivered during the second half of the year as new vehicle lead times continue to improve.
The delays to delivery for direct customers, together with the investments made last year in product development, operations, and sales & marketing, impacted EBITDA margin in the first half, however this will normalise in H2 as the company delivers against its order book for direct sales.
The firm’s net cash at 30 June 2023 was £14.1m after a net cash spend of £2.86m on acquisitions during the period, including initial consideration of £1.86m for Vita Software and the final deferred consideration instalment of £1m in relation to the 2020 acquisition of Trutac.
New customer acquisition continued to be strong in the first half, with the group adding an additional 250 new customers, including Leeds-headquartered LF&E Refrigerated Transport, and Northern Ireland-based McCulla, both signing 6-year contracts.
Nadeem Raza, CEO, said: “We are very pleased with the performance of the group during H1, given the many challenges we have had to overcome. These have included supply chain issues and a shortage of new vehicles coming to market, both of which hampered our ability to deliver solutions, though not to secure sales, such that our order book is at a record level.
“We enter the second half in a strong position. With supply chains improving coupled with the expectation that vehicle deliveries will also improve in H2, the Board are confident in the group’s continued successful growth.”
