Business
Trading Update
Trading Update.
About this update from Microlise Group Plc
[{"type":"text","content":"\n\n25 July 2023\n \n \nMicrolise Group plc\n(\"Microlise\", \"the Group\" or \"the Company\")\n \nTrading Update\n \nSupply chain issues begin to ease resulting in double digit growth\n \nMicrolise Group plc (AIM: SAAS), a leading provider of transport technology solutions to fleet operators, is pleased to provide a half year update on trading for the six months to June 30, 2023 (\"the Period\"). The Group expects to publish its interim results in late September.\n \nTrading update\n \nMicrolise experienced solid trading during the first half of FY23, in-line with management expectations. The Group saw continued growth in revenue, recurring revenue, ARR and profitability.\n \nAs a result, revenue for the first half of the year is expected to show growth of 10% to £33.9m (H1 FY22: £30.7m) with anticipated adjusted EBITDA1 growth of 4% to £4.5m (H1 FY22: £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 (H1 FY22: 10.5% and £40.2M). 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 H2 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 H1, however this will normalise in H2 as the Company delivers against its order book for direct sales. \n \nThe Group's net cash at 30 June 2023 was £14.1m (31 December 2022: £16.7m), after 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 £1.0m in relation to the 2020 acquisition of Trutac. Several large receipts were received post period end, totalling £2.8m, this resulted in a cash conversion rate2 of 80% of adjusted EBITDA, which was lower than H122 (127%), reflecting this working capital phasing. FY cash conversion rate expectations remain unchanged.\n \nCustomers\n \nNew customer acquisition continued to be strong in the first half, with the Group adding an additional 250 new customers, including Leeds head...