Interim Results for the Six Months to 30 June 2026
Summary by AI BETAClose X
22nd September 2026
Microlise Group plc
("Microlise", "the Group" or "the Company")
Interim Results for the Six Months to 30 June 2026
Direct Customer ARR +12%, significant Adjusted EBITDA margin recovery versus H2 2025 and a strengthened net cash position; demonstrating continued strategic progress
Microlise Group plc (AIM: SAAS), a leading provider of transport management software to fleet operators, announces its unaudited results for the six months ended 30 June 2026 ("H1 FY26").
Financial summary
|
Results |
H1 2026 |
H1 2025 |
Change |
|
Annual Recurring Revenue (ARR) (5) |
£60.8m |
£58.7m |
4% |
|
Direct Customer ARR |
£47.1m |
£42.0m |
12% |
|
Group Revenue |
£39.5m |
£44.1m |
(10%) |
|
Recurring Revenue |
£29.9m |
£29.5m |
1% |
|
Recurring Revenue as % of Group Revenue |
76% |
67% |
9 ppts |
|
Operating Profit |
£1.4m |
£1.7m |
(19%) |
|
Adjusted EBITDA (1) |
£5.2m |
£6.2m |
(16%) |
|
Profit before Tax |
£1.4m |
£1.9m |
(27%) |
|
Adjusted Profit before Tax (2) |
£1.9m |
£3.6m |
(49%) |
|
Basic EPS (p) |
0.87p |
1.10p |
(21%) |
|
Adjusted EPS (p) (3) |
1.20p |
2.62p |
(54%) |
|
Adjusted Cash Flow Generated from Operations (4) |
£3.1m |
£4.0m |
(23%) |
|
Cash and cash equivalents |
£13.8m |
£11.2m |
23% |
Notes to the financial statements can be found within the CFO Statement.
Financial Highlights
- Revenue of £39.5m (H1 FY25: £44.1m), reflecting lower OEM revenues and lower non-recurring hardware revenues and project timing, partly offset by continued growth in Direct Customer recurring revenue
- Recurring revenue maintained at £29.9m (H1 FY25: £29.5m), increasing to 76% of Group revenue (H1 FY25: 67%), supporting improved gross margins and driven by the 12.1% increase in Direct Customer ARR
- Adjusted EBITDA1 of £5.2m (H1 FY25: £6.2m), at a margin of 13.2% (H1 FY25: 14.1%), represents a significant recovery from the 5.2% margin delivered in H2 FY25 and a 148% sequential increase from H2 FY25 of £2.1m, reflecting the benefits of the FY25 restructuring programme. Further efficiency initiatives targeted for H2 FY26, supporting the development of a leaner and more scalable operating model.
- The sequential recovery in EBITDA was achieved alongside continued investment in product, AI and go-to-market initiatives to support accelerated growth from FY27.
- Strong balance sheet provides optionality for organic and/or inorganic investment, with net cash of £13.8m (30 June 2025: £11.2m), supported by a £30m undrawn debt facility.
Customer Growth and ARR Expansion
- Direct Customer ARR up 12% to £47.1m (H1 FY25: £42.0m), underpinned by cross-selling and upselling within the existing customer base, alongside renewals and new customer wins
- Direct Customer Net Revenue Retention (NRR)6 remained healthy at 106% (H1 FY25: 114%), demonstrating continued expansion in the direct customer base despite previously flagged managed churn
- OEM ARR reduced by 18.0% to £13.7m (H1 FY25: £16.7m), due mainly to lower renewals
- Secured a significant 10-year renewal and expansion contract with a long-standing customer, with Total Contract Value exceeding £20m and renewal expected to contribute revenue from the end of FY26, supporting growth into FY27
Outlook
- The recognition of non-recurring revenues for Direct Customers and OEM remains subject to timing risk largely driven by continued supply chain challenges
- However, the Board is confident in delivering FY26 revenues broadly in line with current market expectations7 and adjusted EBITDA in line with current market expectations7, supported by a combination of good visibility on recurring revenues, planned customer go-lives and a healthy pipeline, underpinned by margin stability
- The Board is confident in the Group’s prospects for FY26 and beyond driven by the demand environment, benefits from the investment and efficiency programmes and structural growth drivers
Nadeem Raza, CEO, Microlise said: "Microlise has performed in line with management expectations in the first half of 2026 and has delivered against the priorities we set out at our full year results in May. We have continued to grow our Direct Customer business, both through contract expansions with long-standing customers and securing new mandates, leading to double-digit Direct Customer ARR growth and an increased overall proportion of recurring revenue.
"We have continued to invest strategically in the areas that will support Microlise’s long-term growth: Microlise One, our AI and data capabilities and our go-to-market resources, while maintaining a strong balance sheet and benefitting from the restructuring actions already taken. These investments are deepening customer relationships and broadening our reach into new markets.
"We are confident in the Group's ability to deliver FY26 revenues broadly in line with current market expectations7 and adjusted EBITDA in line with current market expectations7, underpinned by continued Direct Customer growth, a growing proportion of high-quality and predictable recurring revenue and improved margins. Looking further ahead, we believe our investment initiatives will deliver ARR growth and expand margins, positioning Microlise for continued progress in FY26 and beyond.”
For further information, please contact:
|
Microlise Group plc |
|
|
Nadeem Raza, CEO Nick Wightman, CFO |
C/O Alma Strategic Communications |
|
Canaccord Genuity Limited (Nominated Adviser & Broker) |
|
|
Simon Bridges / Harry Gooden / Andrew Potts / Elizabeth Halley-Stott |
Tel: +44 (0) 20 7523 8000
|
|
Alma Strategic Communications |
|
|
Caroline Forde/ Joe Pederzolli/ Anna Sutton |
Tel: + 44 (0) 20 3405 0205 microlise@almastrategic.com |
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.
Chairman’s Statement
I am pleased to report on a period of solid progress. Growth in our Direct Customer ARR of 12%, alongside a significant recovery in the Group’s adjusted EBITDA margin versus H2 FY25 and a strong net cash position of £13.8m at the Period end, positions the Group well for a successful H2.
While Group revenue decreased overall as anticipated, reflecting the reduction in OEM revenues, lower non-recurring hardware revenues and project timing, the increasing proportion of recurring revenue provides improved revenue predictability and visibility for the business going forward.
Strategic initiatives provide multiple avenues for profitable growth
With an extensive, blue-chip customer base, our Direct Customer proposition presents a significant growth opportunity, in terms of cross and upsell opportunities, expansion into the mid-market and further penetration of new geographies. We have continued disciplined investment into our offerings and go-to-market resources to leverage this opportunity and are confident these will support the Board’s confidence in the Group’s prospects for FY26 and beyond.
Focused on delivery
Looking ahead to the second half of the year, Microlise is well positioned to return to growth, supported by continued Direct Customer ARR growth, customer expansions, improved margins and a healthy new business pipeline. Within our OEM business, where FY26 revenues are expected to be lower than FY25 predominantly due to lower renewals, the focus for H2 remains on progressing planned customer deployments and new customer go-lives.
The continued focus on Direct Customer initiatives, particularly our higher-margin, software-led products such as TMS, will offset lower OEM revenues, strengthen revenue quality and support further margin progression.
We recognise that confidence is earned through consistency of delivery over time and we look forward to updating shareholders on our progress at our full year results, where we remain confident in our ability to deliver revenues broadly in line with current market expectations7 and adjusted EBITDA in line with market expectations7.
CEO Review HY26
Introduction
Microlise has made solid progress in the first half of 2026, performing in line with management expectations. The Direct Customer business has continued to demonstrate its underlying strength, delivering ARR growth of 12% to £47.1m (H1 FY25: £42.0m) reflecting strong demand and encouraging activity across customer renewals, expansion activity and new customer wins.
As expected, Group revenue was lower year-on-year, driven by reduced OEM revenues following lower renewal activity and lower levels of non-recurring revenue, due to the completion of a major direct customer roll out in the prior period. The Group’s revenue mix now benefits from a greater proportion of higher quality recurring revenue from Direct Customers.
Adjusted EBITDA margin recovered to 13.2% (H2 FY25: 5.2%), reflecting the benefits of the restructuring actions implemented during FY25 resulting in a net headcount reduction of c.80 FTEs versus H1 FY25, together with increased investment in our technology platform and go-to-market capabilities. This strategic investment is targeted at expanding our long-standing customer relationships, growing our international presence and developing new market opportunities, and strengthening Microlise’s platform for scalable, sustainable growth.
We closed the half with a strong balance sheet, with net cash of £13.8m at 30 June 2026 (30 June 2025: £11.2m), supported by healthy cash collection, alongside a £30m undrawn debt facility comprising a £10m committed revolving cash flow facility and a £20m accordion. This strong financial footing provides the foundation for our ongoing investment programme and future growth ambitions.
Customer Growth and ARR Expansion
Conversion of new Direct Customers remains strong, having onboarded 218 new customers in the half (H1 FY25: 216). Direct ARR growth was principally driven by cross-selling and upselling within the existing customer base, particularly across fleet-safety products and Transport Management Systems (“TMS”). This resulted in Direct Customer ARR growth to £47.1m, up 12% (H1 FY25: £42.0m) and healthy Direct NRR of 106% (H1 FY25: 114%). Customer retention remained high, with churn reported at just 1.1% for the six-month period.
During the half, Microlise secured new contracts with several prominent businesses, including Bretts Transport in the UK and Cal in France, while securing renewals from a number of long-standing customers including Samworth Brothers and Boughey Distribution. The Group has also seen encouraging momentum in TMS, securing four deals in the first five months of the year.
Of note was a substantial 10-year contract renewal and expansion with a long-standing customer, secured via a competitive process. The expanded contract has a Total Contract Value of over £20m and is expected to commence revenue contribution towards the end of the current year, providing a strong underpin to 2027.
Strategic Initiatives
As laid out at the FY25 results, this financial year is an important investment year for Microlise as we seek to strengthen the areas of the business which we believe represent long-term growth opportunities. We have taken a disciplined approach to investment and made solid progress across a number of areas as we work to capture the considerable growth opportunity presented by our Direct Customers, building on the Group’s market leading offering and extensive blue-chip customer base.
- Technology and Product Investment
Transitioning all Microlise offerings to one platform and addressing the mid-market
We have continued the development of Microlise One, which unifies our product offerings of fleet operations, transport management and telematics into one platform. By consolidating our offerings and high-quality data across one platform, we can provide an increased range of value-added tools to our existing larger customers at a lower deployment cost, facilitating cross and upsell opportunities, while developing simplified offerings appropriate for the sizeable mid-market. Our mid-market proposition is developing well, with launch anticipated in Q4 FY26.
Enhancements to our TMS offering to speed up implementation and shorten sales cycles
We have continued to invest in our TMS proposition, through better integration tools and streamlined sales processes, which has enabled us to reduce the sales cycle in this software-only, high-margin solution in our product suite. This investment has delivered encouraging progress, with the number of TMS deals secured increasing year-on-year and the sales cycle reducing from around nine months to six months.
Build on our data capabilities to power AI
Our 2026 Transport and Logistics Industry Report highlights increasing confidence in and adoption of emerging technologies and AI tools across the sector, and we have continued to develop the ways in which we utilise AI and data across the business. Our growing data capabilities have enabled us to provide customers with deeper insights into driver performance, fuel efficiency and fleet operations, whilst also powering our embedded AI capabilities. A key example of this is our AI-enabled analytics tools, which are now being released across all datasets and products and support customers with projections and forecasting, as well as historical analysis and insights.
The benefits of these data and AI capabilities extend beyond our customer proposition. Internally, the use of AI across our engineering teams has made our processes more efficient by reducing development and documentation time, enabling faster resolution of software issues and the ability to refocus our team on higher value workstreams. While we are still in the early stages of unlocking the extent of the opportunity presented by AI, we believe it will increasingly enhance customer outcomes and the efficiency of our own operations.
We believe the strengthened technology ecosystem we are building will support growth in FY27 and beyond as we work towards becoming a more scalable, higher-quality and higher-margin business.
- Go-to-Market Capabilities
Our go-to-market investment is focused on generating more demand, improving execution and securing higher-quality recurring growth. We are already seeing the benefits across a range of measures, including an 18% year-on-year increase in pipeline creation, greater sales capacity and stronger process and conversion discipline. Alongside year-on-year growth in Direct Customer order intake, the growth in Direct Customer pipeline supports our confidence in ARR growth.
We have recruited into our sales team, as well as the restructuring of our UK customer acquisition team. Recruitment will continue in H2, and this has included the appointment this month of a Regional Sales Director in France.
- Margin Enhancement and Operational Gearing
We continued to make progress on cost-efficiency actions in the first half, supporting margin recovery and building on the restructuring delivered during FY25. We continue to target further operational efficiencies during the second half of the year, principally through headcount and non-headcount cost savings.
Together with our investment in technology and go-to-market capabilities, these actions are intended to create a leaner and more scalable operating model, supporting stronger operational gearing as the Group grows.
People
We were pleased to receive the King’s Award for Enterprise 2026 in recognition of our international growth, testament to the expertise of our global workforce. We remain committed to building skilled local teams and offices in our key markets to provide in-region support to our customers as we continue to execute our refreshed go-to-market strategy.
A supportive market
Demand from Direct Customers remains strong, underpinned by fleet operators’ need for greater efficiency, profitability and tighter control of operating costs. Operators across the transport and logistics sector are seeking better visibility over fleet performance and clearer identification of savings opportunities.
The market remains characterised by widespread use of legacy technology, with many fleet managers relying on fragmented analogue and digital tools to manage critical workflows. This creates inefficiencies, data silos and limited visibility, while the increasing threat of cyber-attacks and the need to meet evolving safety and compliance requirements are encouraging operators to modernise their technology infrastructure.
Fuel costs provide a further driver of demand. Elevated and volatile prices continue to reinforce the importance of efficiency and cost control for fleet operators, while the transition to alternative fuel vehicles remains gradual due to cost and infrastructure constraints. As a result, many operators continue to run older and mixed fleets, creating a need for technology that can support both conventional and alternative fuel vehicles.
Compliance and safety requirements are also increasing, supporting further demand for comprehensive fleet management solutions, irrespective of fleet size. These requirements create opportunities to attract new customers into the business and expand relationships over time through additional modules.
Taken together, these drivers create a strong growth backdrop for Microlise. Our offerings deliver a clear and measurable return on investment for customers, supporting lower operating costs, improved safety and greater productivity. This includes typical fuel savings of 4-6%, up to 75% better fuel efficiency, up to 70% fewer safety incidents, a 65% reduction in at-fault costs, 10% fewer goods returned and an 80% reduction in management time.
This opportunity is strengthened by our Microlise One platform, which brings together all of our product offerings into one integrated, modern modular platform, supported by insights drawn from our comprehensive underlying data. Through a single sign-on experience and increased data connectivity across solutions, customers can more easily access insights from across the Microlise ecosystem, enhancing their return on investment from our products and supporting the adoption of additional modules over time. This deeper integration is expected to increase the stickiness of our product offerings, creating greater cross-sell opportunities and reducing the cost of deployment and delivery.
Current Trading and Outlook
While ongoing supply chain challenges mean the recognition of non-recurring revenues for Direct Customers and OEM remains subject to timing risk, the Board is confident in delivering FY26 revenues broadly in line with current market expectations7 and adjusted EBITDA in line with market expectations7. This confidence is supported by a combination of good visibility on recurring revenues, planned customer go-lives and a healthy pipeline, underpinned by margin stability. Cost increases due to component availability are being offset by efficiency initiatives, and we do not anticipate any material availability issues to DRAM supply through to the end of FY26. Based on our pipeline, we continue to believe that we should see the reduction in OEM revenues plateauing in late FY27.
The Board is confident in the Group’s prospects for FY26 and beyond, driven by the demand environment, benefits from the investment and efficiency programmes, and structural growth drivers.
CFO Statement
The financial results for the six-month period to 30 June 2026 reflect continued growth in higher-quality Direct Customer recurring revenue and a significant recovery in profitability following the FY25 restructuring programme, partially offset by lower OEM and non-recurring hardware revenues, as anticipated.
To provide a clearer view of underlying business performance, the Group has detailed the below Alternative Performance Measures (APMs) and Statutory Measures for the six-month period to 30 June 2026:
|
|
H1 2026 |
H1 2025 |
Change | |
|
APMs(12) |
Annual Recurring Revenue (ARR) (5) |
£60.8m |
£58.7m |
4% |
|
Adjusted EBITDA (1) |
£5.2m |
£6.2m |
(16%) | |
|
Adjusted Profit before Tax (2) |
£1.9m |
£3.6m |
(49%) | |
|
Adjusted EPS (p) (3) |
1.20p |
2.62p |
(54%) | |
|
Adjusted Cash Flow Generated from Operations (4) |
£3.1m |
£4.0m |
(23%) | |
|
Statutory Measures |
Revenue |
£39.5m |
£44.1m |
(10%) |
|
Recurring Revenue |
£29.9m |
£29.5m |
1% | |
|
Operating Profit |
£1.4m |
£1.7m |
(19%) | |
|
Profit before Tax |
£1.4m |
£1.9m |
(27%) | |
|
Basic EPS (p) |
0.87p |
1.10p |
(21%) | |
|
Cash and cash equivalents |
£13.8m |
£11.2m |
23% | |
Exceptional costs
Following the cyber security incident disclosed in FY24, the Group recognised a net exceptional credit of £0.7m in the period (H1 FY25: £0.1m credit), comprising £0.5m of insurance proceeds recognised as exceptional other income (H1 FY25: £0.4m) and a £0.2m release of the provision held in respect of cyber incident professional fees (H1 FY25: £0.3m of additional costs). No exceptional restructuring costs were incurred in the period, following completion of the restructuring programme in FY25. The Board remains confident that the impact of the cyber incident will be fully covered by its cyber insurance.
To assist users of the financial statements with understanding underlying business trading, the Group presents KPIs 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.
Notes
|
1. |
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. |
|
2. |
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. |
|
3. |
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. |
|
4. |
Adjusted cash flow generated from operations adds back exceptional cash flows in relation to restructuring. |
|
5. |
Annual Recurring Revenue (ARR) is calculated by multiplying the June 2026 monthly recurring revenue by 12. |
|
6. |
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. |
|
7. |
For the purposes of this announcement, the Group understands that market consensus for FY26 is for revenue in the range of £82.1 million to £84.2 million, adjusted EBITDA in the range of £10.0 million to £11.1 million and net cash in the range of £10.6 million to £11.1 million as at 21 September 2026. |
|
8. |
OEM is an abbreviation for Original Equipment Manufacturers. |
|
9. |
Adjusted gross profit adds back the impact of credit notes related to the cyber incident. |
|
10. |
Adjusted Administrative Expenses adds back exceptional costs related to the cyber incident, and exceptional costs in relation to acquisitions and restructuring. |
|
11. |
Cash conversion is calculated by dividing adjusted cash flow generated from operations by adjusted EBITDA. |
|
12. |
Certain financial measures are not determined under IFRS and are alternative performance measures. |
Group Results: Revenue and ARR
|
KPIs for the six months ended 30 June 2026 |
H1 2026 |
H1 2025 |
Change |
|
Revenue |
£39.5m |
£44.1m |
(10.4%) |
|
Recurring Revenue |
£29.9m |
£29.5m |
1.3% |
|
Non-recurring Revenue |
£9.5m |
£14.5m |
(34.3%) |
|
Annual Recurring Revenue (ARR)(5) |
£60.8m |
£58.7m |
3.6% |
|
Direct Customer ARR(5) |
£47.1m |
£42m |
12.1% |
|
Net Revenue Retention (NRR)(6) - Direct Customers |
106% |
114% |
(8 ppts) |
|
Net Revenue Retention (NRR)(6) - Group |
98% |
106% |
(8 ppts) |
Revenue for the six months ended 30 June 2026 was £39.5m, a reduction of 10.4% on the six months ended 30 June 2025 (H1 FY25: £44.1m). Recurring revenues grew 1.3% to £29.9m (H1 25: £29.5m) and represented 76% of Group revenue (H1 FY25: 67%), driven by ARR growth from our Direct Customer business. The reduction in Group revenue reflects mixed volume performance across our global OEM(9) customers, where volumes were below historical norms, the completion of a major customer roll-out in the prior year and the impact of vehicle availability on the timing of certain customer projects in H1 FY26. ARR(5) relating to OEM customers reduced by 18.0% to £13.7m (H1 FY25: £16.7m), due mainly to lower renewals.
A key highlight of the period has been the continued growth of the Group's Direct Customer business, with ARR growing 12% to £47.1m (H1 FY25: £42.0m), supported by customer renewals, expansion activity and new customer wins. Commercial momentum included a significant 10-year renewal and expansion agreement with a long-standing customer, with a total contract value of over £20m, which is expected to begin contributing incremental revenue towards the end of the current year and provides good revenue visibility into FY27.
Group ARR increased by 3.6% to £60.8m (H1 FY25: £58.7m), as Direct Customer ARR grew 12.1% to £47.1m (H1 FY25: £42.0m), partly offset by lower OEM ARR. That growth came from new customer wins and the continued rollout of Microlise's products and services across existing fleets, further increasing the proportion of Group revenue that is recurring.
This Direct Customer growth continues to be underpinned by renewals and account expansion rather than non-recurring project work. This Direct Customer segment remains the Group's most significant long-term opportunity, offering higher-quality revenue and stronger margins over time.
Net Revenue Retention (NRR)(6) for Direct Customers was 106% (H1 FY25: 114%), reflecting the previously flagged managed churn of smaller customers acquired through recent acquisitions, a return to more normalised phasing of fleet expansion by customers, together with a lower level of incremental expansion from certain large customers, with continued low levels of churn of 1.1% (H1 FY25: 0.5%). The reduction in Group NRR over the same period was primarily driven by lower OEM revenues.
Non-recurring revenues decreased by 34.3% to £9.5m (H1 FY25: £14.5m) impacted by the timing of customer roll-outs. Hardware and installation revenues reduced to £8.3m (H1 FY25: £12.7m), due to the completion of a major direct customer roll-out in the prior year and the impact of vehicle availability on the timing of certain hardware deployments. Professional services revenues, including project management, decreased to £1.3m (H1 FY25: £1.8m), reflecting this lower level of project activity in the period.
Gross Profit
Gross profit for the period decreased by 8.3% to £26.5m (H1 FY25: £28.9m), with a gross margin of 67.1% (H1 FY25: 65.6%). The increase in gross margin demonstrates the benefit of the Group's ongoing evolution towards a greater proportion of higher-margin recurring revenues.
Administrative Expenses & Operating Profit
Adjusted administrative expenses(10) before exceptional administrative charges and share based payment charges decreased 4% to £26.0m in the Period (H1 FY25: £27.1m), reflecting the benefit of the restructuring completed in FY25. Staff costs were £17.1m (H1 FY25: £18.9m) and average headcount was 735 (H1 FY25: 811). The FY25 restructuring programme, announced in November 2025 and completed before the start of the Period, mostly focused on operations rather than our go-to-market teams. These initiatives, coupled with other ongoing initiatives, generated £5m of annualised cost savings and a headcount reduction of over 100 FTEs, the benefit of which is reflected in the H1 FY26 cost base. Part of these cost savings will be reinvested back into the Company through the Group's targeted investment programme, primarily into our go-to-market teams to drive new business activity, alongside investment in product and infrastructure that is reflected in capitalised development costs rather than administrative expenses.
Our margin enhancement programme continues through H2 FY26, focusing on further cost reductions and process improvements to support profitable growth. During FY25 and into the current half, 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. Associated benefits are therefore expected over a longer period, although the H1 FY26 margin recovery to 13.2% is evidence of progress. The Group remains committed to its medium-term margin ambitions.
Investment in marketing and go to market capability continued in the Period, with further investment into the sales team expected in H2 2026 and into FY27. Marketing investment was £1.6m (H1 FY25: £1.3m), remaining focused on priority regions, campaign capability and events activity, which continue to be a direct pipeline driver. The marketing automation capability implemented in FY25 is now embedded, improving targeting and lead management and supporting a more data-led allocation of spend. Expenditure in the Period was prioritised towards the activities with the clearest line to pipeline, including our principal industry events, targeted digital and content programmes, customer-led evidence and increased sales development capacity across the UK, France and Australia. Closer coordination between the marketing, sales development and sales teams improved demand generation and lead qualification, with APAC recording a significant increase in website-generated enquiries compared with H1 2025 as regional inbound capability develops. In H2 FY26, the Group will publish its first Australian industry report alongside a programme of industry events in Australia and France, with FY27 investment directed towards the activities demonstrating the strongest contribution to pipeline development and commercial return.
Depreciation and amortisation charges in the Period increased 7% to £4.4m (H1 FY25: £4.1m). Depreciation charges increased as a result of higher levels of fixed asset investment in the Group's data centres and improvements to its headquarters. Amortisation of other intangible assets increased as a result of continued investment in internally developed technologies, partly offset by lower amortisation of business combination intangibles of £1.1m (H1 FY25: £1.4m).
Capitalised development costs in the Period were £2.4m (H1 FY25: £1.4m), reflecting the increased levels of investment into the product portfolio, architecture and security. Amortisation of capitalised development costs was £1.3m (H1 FY25: £1.1m).
Operating profit for the Period after adjusting for exceptional items, share based payments, and amortisation charges as a result of business combinations was £1.9m (H1 FY25: £3.5m). Reported operating profit for the period was £1.4m (H1 FY25: £1.7m), after net exceptional cyber related income of £0.7m (H1 FY25: £0.1m).
Adjusted EBITDA(1) & 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 Period was £5.2m (H1 FY25: £6.2m), which, while representing a 16% reduction year on year, is a 148% increase on the £2.1m delivered in H2 2025, with margin recovering to 13.2% (H1 FY25: 14.1%; H2 FY25: 5.2%).
The year-on-year reduction reflects the lower non-recurring revenue in the Period, while the sequential recovery against H2 2025 reflects the benefit of the FY25 restructuring now embedded in the cost base. Targeted investment in product, infrastructure and go to market capability increased in the half and continues to increase across FY26 as a whole, notwithstanding the reduction in total adjusted administrative expenses following the FY25 restructuring. The product and infrastructure element of that investment is reflected in increased capitalised development costs of £2.4m (H1 FY25: £1.4m), and this elevated level of investment is expected to continue into H2 FY26 and FY27. H2 FY26 investment is weighted towards cloud infrastructure, delivery of the TMS module and mid-market offering, and additional sales resource in core geographies. These investments are being made from a position of balance sheet strength and are intended to support revenue growth from 2027 onwards, with £13.8m of cash at 30 June 2026 and no drawn debt.
While this investment will be managed within the Group's disciplined approach to cost control and capital allocation, it will absorb part of the £5m of annualised savings delivered through the FY25 restructuring, and we therefore expect margin progression in H2 FY26 to be more measured than the recovery delivered in H1, while still expecting margin improvement in the second half year on year, supported by the further non-headcount cost efficiencies targeted for H2. The Board is satisfied this balance remains appropriate, with recurring revenue now representing 76% of Group revenue (H1 FY25: 67%) and remaining the principal driver of margin over time. Taking the H1 performance, contracted recurring revenue and the phasing of second-half investment together, the Board expects FY26 adjusted EBITDA to be in line with market consensus7.
Adjusted profit before taxation(2) for the Period decreased 49% to £1.9m (H1 FY25: £3.6m), reflecting the lower Adjusted EBITDA and higher depreciation of £2.0m (H1 FY25: £1.6m) and amortisation charges associated with capitalised development costs of £1.3m (H1 FY25: £1.1m). The adjusted profit before taxation excludes exceptional costs in relation to restructuring and cyber security costs, amortisation charges of £1.1m as a result of business combinations (H1 FY25: £1.4m) and share based payments. Reported profit before taxation in the period was £1.4m (H1 FY25: £1.9m).
Taxation
The tax charge in the six months ended 30 June 2026 was £0.4m (H1 FY25: £0.6m), representing an effective tax rate of 25.9% (H1 FY25: 31.8%). The effective tax rate is higher than the standard rate of corporation tax and this is driven by non-deductible expenses, including 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 30 June 2026 the pretax value of the credit was £0.1m (H1 FY25: £0.1m).
Profit After Tax, EPS and Dividend
Adjusted profit after tax(3) for the Period decreased 54% to £1.4m (H1 FY25: £3.0m). As a result, adjusted earnings per share(3) decreased 54% to 1.20p (H1 FY25: 2.62p). Reported basic earnings per share was 0.87p (H1 FY25: 1.10p) and diluted earnings per share was 0.87p (H1 FY25: 1.09p). For further information on earnings per share, please refer to note 5 of the financial statements. Reported profit after tax for the six months ended 30 June 2026 was £1.0m (H1 FY25: £1.3m).
No dividends were paid during the six months ended 30 June 2026 (H1 FY25: £1.4m in respect of the FY24 final dividend). The FY25 final dividend of 1.30 pence per ordinary share (£1.5m) was approved by shareholders at the Annual General Meeting held on 24 June 2026 and was paid on 24 July 2026, after the period end 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 £67.5m at 30 June 2026 (30 June 2025: £72.0m; 31 December 2025: £68.0m). Total assets increased to £134.2m (31 December 2025: £132.9m). The prior-year comparatives include the July 2025 disposal of the Group's interest in Trakm8 Holdings Plc, which was reported in full in the FY25 results. Trade and other receivables increased to £21.0m (30 June 2025: £19.2m; 31 December 2025: £16.0m), reflecting the phasing of billing and customer project activity in the period and the particularly strong cash collection performance in H2 FY25.
Total liabilities increased to £66.7m (31 December 2025: £64.8m). Lease liabilities of £4.5m (31 December 2025: £3.9m) reflect increased data centre capacity as part of the strategy to reduce third party hosting costs, together with vehicle leasing 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 30 June 2026 total trade and other payables was £53.4m (31 December 2025: £52.9m), a significant proportion of which is deferred income relating to future contracted revenue recognition.
Adjusted Cashflow(4) & Net Cash
Adjusted cash flows generated from operations(4) were £3.1m in the Period (H1 FY25: £4.0m), representing an adjusted cash conversion rate(11) of 60% (H1 FY25: 64%), reflecting the working capital outflow in the half. Underlying cash collection performance in the Period remained healthy, with the working capital outflow reflecting the phasing of billing and customer project activity rather than any slowdown in collection. Cash collection in H2 2025 was particularly strong, with a number of receipts originally anticipated in FY26 collected ahead of schedule, and the year-on-year reduction in adjusted cash flows generated from operations therefore principally reflects this timing benefit in the prior period rather than any change in the quality of the receivables book or in customer payment behaviour.
Reported net cash flows generated from operating activities in the period was £1.3m (H1 FY25: £3.9m). The Group ended the six-month period to 30 June 2026 with cash and cash equivalents of £13.8m (30 June 2025: £11.2m; 31 December 2025: £16.7m).
Overall, the net cash outflow was £3.0m with the main movements being: an increase in trade and other receivables of £4.8m (H1 FY25: £1.3m reduction); net tax receipts of £0.3m (H1 FY25: £0.4m receipt); no dividend payments (H1 FY25: £1.4m); purchases of plant, property and equipment of £1.0m (H1 FY25: £0.6m); investment into product and development of £2.4m (H1 FY25: £1.4m); and payments in respect of lease liabilities of £0.8m (H1 FY25: £0.7m).
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 facility remained undrawn throughout the Period and the Group had no drawn debt at 30 June 2026, with the Group comfortably within its banking covenants. The Group's cash of £13.8m (30 June 2025: £11.2m) and the undrawn £10.0m committed revolving credit facility give the Group total available liquidity of £23.8m on a committed basis. The £20m accordion sits over and above this. Given the level of headroom in the business forecasts, the Board considers 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.
Interim unaudited Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2026
|
|
|
Six months ended 30 June 2026 |
Six months ended 30 June 2025 | ||||||||
|
|
|
Underlying results |
Exceptional cyber incident income (note 2) |
Total |
Underlying results |
Exceptional cyber incident income (note 2) |
Total |
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Note |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
||||
|
Revenue |
1 |
39,454 |
- |
39,454 |
44,050 |
- |
44,050 |
||||
|
Cost of sales |
|
(12,966) |
- |
(12,966) |
(15,158) |
- |
(15,158) |
||||
|
Gross profit |
|
26,488 |
- |
26,488 |
28,892 |
- |
28,892 |
||||
|
Other operating income |
|
281 |
477 |
758 |
230 |
381 |
611 |
||||
|
Administrative expenses |
|
(26,019) |
187 |
(25,832) |
(27,501) |
(259) |
(27,760) |
||||
|
Operating profit |
|
750 |
664 |
1,414 |
1,621 |
122 |
1,743 |
||||
|
|
|
|
|
|
|
|
|
||||
|
Interest income |
|
146 |
- |
146 |
233 |
- |
233 |
||||
|
Interest expense |
|
(196) |
- |
(196) |
(113) |
- |
(113) |
||||
|
Profit before tax
|
|
700 |
664 |
1,364 |
1,741 |
122 |
1,863 |
||||
|
Taxation |
4 |
(187) |
(166) |
(353) |
(561) |
(31) |
(592) |
||||
|
|
|
|
|
|
|
|
|
||||
|
Profit for the period |
|
513 |
498 |
1,011 |
1,180 |
91 |
1,271 |
||||
|
|
|
|
|
|
|
|
|
||||
|
Other comprehensive income for the period |
|
|
|
|
|
|
|
||||
|
Currency translation differences |
|
(85) |
- |
(85) |
(204) |
- |
(204) |
||||
|
|
|
|
|
|
|
|
|
||||
|
Total comprehensive income for the period attributable to the equity shareholders of Microlise Group PLC |
|
428 |
498 |
926 |
976 |
91 |
1,067 |
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
Earnings per share |
|
|
|
|
|
|
|
||||
|
Basic earnings per share (pence) |
5 |
0.44 |
0.43 |
0.87 |
1.02 |
0.08 |
1.10 |
||||
|
Diluted earnings per share (pence) |
5 |
0.44 |
0.43 |
0.87 |
1.01 |
0.08 |
1.09 |
||||
Interim unaudited consolidated Statement of Changes in Equity
|
|
Share capital |
Share premium |
Retained earnings |
Total equity |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
|
At 1 January 2025 |
116 |
17,630 |
54,153 |
71,899 |
|
Comprehensive income for the period to 30 June 2025 |
|
|
|
|
|
Profit for the period |
- |
- |
1,271 |
1,271 |
|
Other comprehensive expense |
- |
- |
(204) |
(204) |
|
Total comprehensive income for the period |
- |
- |
1,067 |
1,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payment |
- |
- |
442 |
442 |
|
Dividends paid |
- |
- |
(1,438) |
(1,438) |
|
Total transactions with owners |
- |
- |
(996) |
(996) |
|
At 30 June 2025 |
116 |
17,630 |
54,224 |
71,970 |
|
Comprehensive expense for the period to 31 December 2025 |
|
|
| |
|
Loss for the period |
- |
- |
(3,436) |
(3,436) |
|
Other comprehensive expense |
- |
- |
(53) |
(53) |
|
Total comprehensive expense for the period |
- |
- |
(3,489) |
(3,489) |
|
|
|
|
|
|
|
Share based payment |
- |
- |
256 |
256 |
|
Dividends paid |
- |
- |
(695) |
(695) |
|
Total transactions with owners |
- |
- |
(439) |
(439) |
|
|
|
|
|
|
|
At 31 December 2025 |
116 |
17,630 |
50,296 |
68,042 |
|
|
|
|
|
|
|
Comprehensive income for the period to 30 June 2026 |
|
|
|
|
|
Profit for the period |
- |
- |
1,011 |
1,011 |
|
Other comprehensive expense |
- |
- |
(85) |
(85) |
|
Total comprehensive income for the period |
- |
- |
926 |
926 |
|
|
|
|
|
|
|
Share based payment |
- |
- |
48 |
48 |
|
Dividends payable (see below) |
- |
- |
(1,508) |
(1,508) |
|
Total transactions with owners |
- |
- |
(1,460) |
(1,460) |
|
|
|
|
|
|
|
At 30 June 2026 |
116 |
17,630 |
49,762 |
67,508 |
|
|
|
|
|
|
The final dividend payable for 2025 was approved by the shareholders on 24 June 2026 for payment in July 2026 and is therefore presented as a liability as at 30 June 2026 in this interim financial information.
Interim unaudited Consolidated Statement of Financial Position
as at 30 June 2026
|
|
Note |
30 June |
31 December |
30 June |
|
|
|
2026 |
2025 |
2025 |
|
|
|
£’000 |
£’000 |
£’000 |
|
Assets |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
12,098 |
11,628 |
9,196 |
|
Intangible assets |
6 |
81,579 |
81,673 |
82,797 |
|
Investments in associate |
7 |
- |
- |
1,364 |
|
Trade and other receivables |
|
2,642 |
2,996 |
3,776 |
|
Total non-current assets |
|
96,319 |
96,297 |
97,133 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Inventories |
|
2,758 |
2,753 |
3,151 |
|
Loan to associate |
7 |
- |
- |
1,045 |
|
Trade and other receivables |
|
21,013 |
15,990 |
19,173 |
|
Corporation tax recoverable |
|
306 |
1,100 |
- |
|
Cash and cash equivalents |
|
13,771 |
16,743 |
11,159 |
|
Total current assets |
|
37,848 |
36,586 |
34,528 |
|
Total assets |
|
134,167 |
132,883 |
131,661 |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Lease liabilities |
|
(1,549) |
(1,188) |
(1,014) |
|
Trade and other payables |
|
(33,053) |
(35,147) |
(32,248) |
|
Dividend payable |
|
(1,508) |
- |
- |
|
Corporation tax payable |
|
- |
- |
(103) |
|
Total current liabilities |
|
(36,110) |
(36,335) |
(33,365) |
|
|
|
|
|
|
|
Non current liabilities |
|
|
|
|
|
Lease liabilities |
|
(2,914) |
(2,689) |
(1,106) |
|
Trade and other payables |
|
(20,385) |
(17,742) |
(16,223) |
|
Deferred tax |
|
(5,177) |
(5,464) |
(6,179) |
|
Provisions |
|
(2,073) |
(2,611) |
(2,818) |
|
Total non current liabilities |
|
(30,549) |
(28,506) |
(26,326) |
|
|
|
|
|
|
|
Total liabilities |
|
(66,659) |
(64,841) |
(59,691) |
|
|
|
|
|
|
|
Net assets |
|
67,508 |
68,042 |
71,970 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Issued share capital |
8 |
116 |
116 |
116 |
|
Share premium account |
|
17,630 |
17,630 |
17,630 |
|
Retained earnings |
|
49,762 |
50,296 |
54,224 |
|
Total equity |
|
67,508 |
68,042 |
71,970 |
Interim unaudited Consolidated Statement of Cash Flows
for the period ended 30 June 2026
|
|
|
Six months ended |
Six months ended |
|
|
Note |
2026 |
2025 |
|
|
|
£’000 |
£’000 |
|
Cash flows from operating activities |
|
|
|
|
Cash generated from operations |
A |
989 |
3,510 |
|
Tax received |
|
377 |
496 |
|
Tax paid |
|
(99) |
(108) |
|
Net cash generated from operating activities |
|
1,267 |
3,898 |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Purchase of property, plant and equipment |
|
(1,020) |
(646) |
|
Additions to intangible assets |
|
(2,357) |
(1,401) |
|
Interest received |
|
146 |
188 |
|
Net cash used in investing activities |
|
(3,231) |
(1,859) |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Dividends paid |
|
- |
(1,438) |
|
Interest paid |
|
(196) |
(113) |
|
Lease liability payments |
|
(831) |
(672) |
|
Net cash used in financing activities |
|
(1,027) |
(2,223) |
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
(2,991) |
(184) |
|
Cash and cash equivalents at beginning of the year |
|
16,743 |
11,401 |
|
Foreign exchange gains/(losses) |
|
19 |
(58) |
|
Cash and cash equivalents at end of the year |
B |
13,771 |
11,159 |
|
|
|
|
|
Notes to the interim unaudited consolidated statement of cash flows
for the period ended 30 June 2026
A. Cash generated from operations
The reconciliation of profit for the period to cash generated from operations is set out below:
|
|
|
Six months ended |
Six months ended |
|
|
|
2026 |
2025 |
|
|
|
£’000 |
£’000 |
|
Profit for the period |
|
1,011 |
1,271 |
|
Adjustments for: |
|
|
|
|
Depreciation of property, plant and equipment |
|
1,967 |
1,625 |
|
Amortisation of business combination intangible assets |
|
1,104 |
1,420 |
|
Amortisation of other intangible assets |
|
1,344 |
1,098 |
|
Loss on disposal of intangible fixed assets |
|
3 |
- |
|
Share based payments |
|
48 |
442 |
|
Foreign exchange loss in respect of intercompany balances |
|
(70) |
(161) |
|
Net interest costs |
|
50 |
(120) |
|
Tax charge |
|
353 |
592 |
|
|
|
5,810 |
6,167 |
|
Working capital movements: |
|
|
|
|
(Increase)/decrease in inventories |
|
(5) |
61 |
|
(Increase)/decrease in trade and other receivables |
|
(4,765) |
1,276 |
|
Decrease in trade and other payables |
|
(51) |
(3,994) |
|
Cash generated from operations |
|
989 |
3,510 |
|
|
|
|
|
B. Analysis of net cash
|
|
At 1 January 2025 |
Cash flow |
Non-cash changes |
At |
|
|
|
|
|
2025 |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
|
Lease liabilities |
(1,309) |
672 |
(1,483) |
(2,120) |
|
Liabilities arising from financing activities |
(1,309) |
672 |
(1,483) |
(2,120) |
|
|
|
|
|
|
|
Cash and cash equivalents |
11,401 |
(184) |
(58) |
11,159 |
|
Net cash |
10,092 |
488 |
(1,541) |
9,039 |
|
|
At 1 January 2026 |
Cash flow |
Non-cash changes |
At |
|
|
|
|
|
2026 |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
|
Lease liabilities |
(3,877) |
831 |
(1,417) |
(4,463) |
|
Liabilities arising from financing activities |
(3,877) |
831 |
(1,417) |
(4,463) |
|
|
|
|
|
|
|
Cash and cash equivalents |
16,743 |
(2,991) |
19 |
13,771 |
|
Net cash |
12,866 |
(2,160) |
(1,398) |
9,308 |
Notes to the interim unaudited financial information
General information
The parent company is a holding company and its subsidiaries are businesses that provide technological transport and fleet management solutions. Its technology is designed to help businesses improve efficiency, reduce emissions, lower costs, and increase safety on the road. The company is a public limited company listed on AIM, limited by shares, incorporated and domiciled in England. The address of the registered office is Farrington Way, Eastwood, Nottingham, NG16 3AG.
Basis of preparation
This interim announcement and condensed consolidated interim financial information has been prepared in accordance with the recognition and measurement requirements of UK adopted International Accounting Standards as effective for periods beginning on or after 1 January 2026 (‘IFRS’).
In preparing these interim financial statements, the Board have considered the impact of any new standards or interpretations which will become applicable for the next Annual Report and Accounts which deal with the year ending 31 December 2026 and there are not expected to be any changes in the Group’s accounting policies compared to those applied at 31 December 2025, a full description of which are contained in the financial statements for the year ended 31 December 2025 which are available on our website.
There are no new standards, interpretations and amendments in issue which are not yet effective in these financial statements, expected to have a material effect on the Group’s future financial statements.
The principal accounting policies used in preparing the interim results are those the Group expects to apply in its financial statements for the year ending 31 December 2026.
The financial information does not contain all of the information that is required to be disclosed in a full set of IFRS financial statements. The financial information for the periods ended 30 June 2026 and 30 June 2025 is unaudited and does not constitute the Group's statutory financial statements for the period.
The statutory audited financial statements for the year ended 31 December 2025 have been filed at Companies House. The auditor’s report on those financial statements was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying its report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.
The interim financial information has been prepared under the historical cost convention unless otherwise specified within these accounting policies. The financial information and the notes to the financial information are presented in thousands of pounds sterling (‘£’000’), the functional and presentation currency of the Group, except where otherwise indicated.
The policies have been consistently applied to all periods presented, unless otherwise stated.
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.
Going concern
The Group had cash balances of £13.8m at 30 June 2026 and an undrawn committed revolving cash flow facility of £10m and a £20m accordion facility available until April 2027. The facility may be used for general corporate and working capital purposes and for permitted acquisitions.
The Group has prepared forecasts for the period to 31 December 2027 and a range of sensitivities have been run on the working capital model. The directors consider a scenario in which the business will face liquidity issues or breach covenant conditions in respect of facilities is remote. As part of the sensitivity analysis the directors have considered the impact of a reduction in turnover from their principal customer and the impact on working capital and are satisfied that in such a scenario the Group has sufficient liquid resources to restructure and continue as a going concern servicing the remaining customer base.
In view of the funds and facilities available to the Group the directors consider that there is significant cash headroom in the forecasts and the going concern basis of preparation is therefore appropriate.
- Segmental information
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 in respect of the set up, 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.
|
|
|
|
Six months ended |
Six months ended |
|
|
|
|
£’000 |
£’000 |
|
By type |
|
|
|
|
|
Revenue recognised at a point in time: |
|
|
|
|
|
Supply of hardware and installation |
|
|
8,286 |
12,700 |
|
|
|
|
|
|
|
Revenue recognised over time: |
|
|
|
|
|
Professional services including project management |
|
|
1,257 |
1,835 |
|
Managed service agreement income |
|
|
26,999 |
26,571 |
|
Other support and maintenance services |
|
|
2,912 |
2,944 |
|
|
|
|
31,168 |
31,350 |
|
|
|
|
39,454 |
44,050 |
|
By destination: |
|
|
|
|
|
UK |
|
|
35,741 |
39,081 |
|
Rest of Europe |
|
|
973 |
1,328 |
|
Rest of the World |
|
|
2,740 |
3,641 |
|
Total revenue |
|
|
39,454 |
44,050 |
One customer contributed £10.4m and 26% of revenue to the six months ended 30 June 2026 (£12.5m and 28% to the six months ended 30 June 2025).
Due to the nature of revenue, there is not considered to be seasonality in relation to the reported results.
The board views operations as one business and segment with a focus on areas within this including geographical expansion and selling complementary services to the existing customer base.
- Exceptional income and costs
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 incurred a number of exceptional costs totalling £4,380,000 which were recorded in the results for the year ended 31 December 2024.
The Group has reassessed the provision recognised for customer claims based on its best estimate of the potential outcome of new and existing claims and concluded that the majority should be retained at both 30 June 2025 and 2026. The Group will review and adjust the provision to reflect the best estimate again at year end.
The Group considers that its related insurance policies largely 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. In these interim financial statements exceptional other income of £477,000 has been recognised reflecting claims that have been processed for the period to 30 June 2026 (2025: £381,000) and £187,000 of provisions have been released resulting in a further credit to administrative expenses (2025: offset by a further £259,000 of related professional fees).
- Alternative performance measures
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 credit included in other operating income above operating profit and in line with common practice is included in the Group’s calculation of EBITDA.
|
|
|
|
|
Six months ended |
Six months ended |
|
|
|
|
|
£’000 |
£’000 |
|
Operating profit |
|
|
|
1,414 |
1,743 |
|
|
|
|
|
|
|
|
Share based payment |
|
|
|
48 |
442 |
|
Depreciation of property, plant and equipment |
|
|
|
1,967 |
1,625 |
|
Amortisation of intangible assets that arose from business combinations |
|
|
|
1,104 |
1,420 |
|
Amortisation of other intangible assets |
|
|
|
1,344 |
1,098 |
|
Exceptional income in respect of cyber incident insurance proceeds |
|
|
|
(477) |
(381) |
|
(Release of provision)/additional costs in respect of cyber incident professional fees |
|
|
|
(187) |
259 |
|
Adjusted EBITDA |
|
|
|
5,213 |
6,206 |
- Tax on profit
|
|
|
|
Six months ended |
Six months ended |
|
|
|
|
£’000 |
£’000 |
|
Current taxation |
|
|
|
|
|
UK corporation tax |
|
|
(565) |
(435) |
|
Current period overseas tax |
|
|
(61) |
(106) |
|
|
|
|
(626) |
(541) |
|
Deferred taxation |
|
|
|
|
|
Origination and reversal of timing differences |
|
|
273 |
(51) |
|
|
|
|
273 |
(51) |
|
Tax charge on profit |
|
|
(353) |
(592) |
The Finance Act 2021 enacted a UK corporation tax rate of 25% applying to taxable profits from April 2023. This has accordingly been applied at 30 June 2025 and 2026 to deferred tax balances.
Factors affecting the tax for the period
The tax charge on the profit for the period differs from applying the standard rate of corporation tax in the UK of 25% (2025: 25%). The differences are reconciled below:
|
|
|
|
Six months ended |
Six months ended |
|
|
|
|
£’000 |
£’000 |
|
Profit before taxation |
|
|
1,364 |
1,863 |
|
|
|
|
|
|
|
Corporation tax at standard rate |
|
|
341 |
466 |
|
Factors affecting charge for the period: |
|
|
|
|
|
Disallowable expenses |
|
|
12 |
123 |
|
Other differences including higher overseas tax rates |
|
|
- |
3 |
|
Tax charge on profit |
|
|
353 |
592 |
In addition, RDEC credits of £120,000 are included in other operating income for the period ended 30 June 2026 (2025: £80,000).
- Earnings per share
|
|
|
Six months ended |
Six months ended |
|
|
|
|
|
|
Profit used in calculating EPS (£’000) |
|
1,011 |
1,271 |
|
Weighted average number of shares for basic EPS (note 8) |
|
115,946,993 |
115,945,956 |
|
Weighted average number of shares for diluted EPS |
|
116,134,714 |
116,265,851 |
|
Basic earnings per share (pence) |
|
0.87 |
1.10 |
|
Diluted earnings per share (pence) |
|
0.87 |
1.09 |
There were 4,379,920 unexercised share options in place at 30 June 2026 (2025: 5,619,532) of which 1,535,571 (2025: 319,895) were potentially dilutive within the period at their nominal exercise price and are included in the weighted average for diluted EPS.
- Intangible fixed assets
|
|
|
|
Customer relationships |
|
– business combinations |
Total business combination assets |
|
|
Overall total |
|
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
At 1 January 2025 |
|
60,193 |
20,023 |
3,030 |
8,420 |
91,666 |
9,932 |
951 |
102,549 |
|
Additions |
|
- |
- |
- |
- |
- |
1,399 |
2 |
1,401 |
|
At 30 June 2025 |
|
60,193 |
20,023 |
3,030 |
8,420 |
91,666 |
11,331 |
953 |
103,950 |
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation |
|
|
|
|
|
|
|
|
|
|
At 1 January 2025 |
|
- |
7,213 |
1,221 |
5,081 |
13,515 |
4,541 |
579 |
18,635 |
|
Charge for the period |
|
- |
690 |
144 |
586 |
1,420 |
1,044 |
54 |
2,518 |
|
At 30 June 2025 |
|
- |
7,903 |
1,365 |
5,667 |
14,935 |
5,585 |
633 |
21,153 |
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
|
|
|
At 30 June 2025 |
|
60,193 |
12,120 |
1,665 |
2,753 |
76,731 |
5,746 |
320 |
82,797 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
At 1 January 2026 |
|
60,193 |
20,023 |
3,030 |
8,420 |
91,666 |
12,585 |
1,079 |
105,330 |
|
Additions |
|
- |
- |
- |
- |
- |
2,357 |
- - |
2,357 |
|
Disposals |
|
- |
- |
- |
- |
- |
- |
(15) |
(15) |
|
At 30 June 2026 |
|
60,193 |
20,023 |
3,030 |
8,420 |
91,666 |
14,942 |
1,064 |
107,672 |
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation |
|
|
|
|
|
|
|
|
|
|
At 1 January 2026 |
|
- |
8,593 |
1,509 |
6,081 |
16,183 |
6,776 |
698 |
23,657 |
|
Charge for the period |
|
- |
690 |
143 |
271 |
1,104 |
1,279 |
65 |
2,448 |
|
Disposals |
|
- |
- |
- |
- |
- |
- |
(12) |
(12) |
|
At 30 June 2026 |
|
- |
9,283 |
1,652 |
6,352 |
17,287 |
8,055 |
751 |
26,093 |
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
|
|
|
At 30 June 2026 |
|
60,193 |
10,740 |
1,378 |
2,068 |
74,379 |
6,887 |
313 |
81,579 |
Intangible assets have arisen principally on acquisition with a continuing investment in technology and software.
- Transactions with associate
The Group held 20% of the shares in Trakm8 Holdings plc. A £1,000,000 convertible loan also advanced to this company in a prior period was originally due for repayment in September 2024 or convertible into a fixed number of shares. In April 2024, the repayment date was extended to September 2025 with interest earned increasing from 12% to 18% and with a revised conversion option at 8.1 pence per share. Accrued interest on the loan of £45,000 was payable at 30 June 2025.
Trakm8 Holdings plc was acquired by a private buyer on 9 July 2025 and the loan notes and unpaid interest were converted into equity and sold together with the investment in shares. The Group received disposal proceeds of £2,180,000 and recognised a loss on disposal of £414,000 in the full year results to December 2025.
- Share capital
On 26 June 2026, 37,527 £0.001 shares were issued at £0.001 each following the exercise of share options.
This increased the number of £0.001 shares in issue from 115,945,956 to 115,983,483.
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