28 September 2021
Microlise Group plc
("Microlise", "the Group" or "the Company")
Interim Results
Microlise Group plc (AIM:SAAS), a leading provider of transport management software to fleet operators, is pleased to announce its interim results for the 12 months to 30 June 2021.
The Company recently changed its financial year end to December from June with these interim results therefore covering a 12-month period.
Financial highlights:
|
| FY21 | FY20 | Change % |
| Revenue | £57.0M | £50.0M | 13.9% |
| Recurring revenue1 | £35.1M | £32.0M | 9.9% |
| Gross profit | £32.8M | £28.4M | 15.4% |
| EBITDA2 | £7.6M | £5.5M | 36.7% |
| Operating profit | £3.1M | £1.2M | 154.9% |
| Profit before tax | £2.2M | £0.7M | 214.4% |
| Recurring revenue as a % of adjusted administrative expenses3 | 102.0% | 99.1% | 3.0% |
| Earnings per share | 2.2p | 2.8p | -21.4% |
| Cash balances | £9.7M | £10.1M | -3.4% |
Highlights:
· 50 new customers added in the period supported by new long-term contracts with existing customers, including a new 5-year agreement with JCB announced post period end
· Continued investment to acquire new customers and broaden product offering to grow recurring revenue per customer
· Successful admission to AIM post period end, raising £61.2m of gross proceeds including £18.6m for the Company, to accelerate organic growth and support our M&A strategy
· Jon Lee was appointed as Non-Executive Chairman, with Dino Rocos appointed as Non-Executive Director
· The Group's performance during Covid-19 has demonstrated the resilience of the business, and the Board is confident in delivering market expectations for the 6 months to December 2021
· Trading since the period end has started well, with growing demand for our products driven by the need for technology to improve fleet efficiency and to comply with stricter environmental regulation
1 Recurring revenue comprises income invoiced for services that are repeatable and consumed and delivered on a monthly basis over the term of a customer contract.
2 Earnings before interest, tax, depreciation, and amortisation (Operating profit £3.1 million (2020: £1.2 million) plus £4.5 million (2020: £4.3 million) depreciation and amortisation)
3 Administrative expenses in this calculation are adjusted to exclude depreciation and amortisation costs
Nadeem Raza, Chief Executive, Microlise, said: "We are proud of the Group's financial performance in the last 12 months reflecting the strength of our long-term customer relationships and growing demand for our products. Our recent IPO provided us with the funds to deliver on our ambitious growth plans, including new product development as well as entering new geographies and markets where we see exciting opportunities.
With our award-winning end to end platform, leading position in the UK, and growing international presence, we are well positioned to complement organic growth with value-accretive acquisitions."
For further information, please contact:
|
Microlise Group plc | c/o SEC Newgate |
| Nadeem Raza, CEO Bill Wynn, CFO
|
|
| Singer Capital Markets (Nominated Adviser & Broker) Steve Pearce / James Moat / Harry Gooden
| Tel: 020 7496 3000 |
| SEC Newgate (Financial PR) | Tel: 020 3757 6880 |
| Bob Huxford / Robin Tozer /Isabelle Smurfit | Email: microlise@secnewgate.co.uk |
About Microlise
Microlise Group Plc is a leading provider of transport management software to fleet 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 400 enterprise clients. With 350 employees based at the Group's headquarters in Nottingham in the UK, the Company also has offices in France, Australia, and India, with a total global staff base of over 600.
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 delighted to present Microlise's first set of results as a public company following our successful IPO on AIM in July 2021. As we have changed our financial year end to December from June, these unaudited interim results cover the 12-month period to 30 June 2021. The Company will report audited results for the eighteen months to 31 December 2021 in early 2022.
The IPO is already delivering benefits to the Group. It has enhanced the Group's profile with its customers, and will assist with the recruitment, retention and incentivisation of senior management and employees at all levels of the Group. In the future, the funds raised will help the Company penetrate new geographies and market segments, including the market for smaller fleet sizes and different vehicle types, such as light commercial vehicles.
As outlined in our IPO admission document, we believe this strategy will drive long-term, sustainable growth for shareholders.
Financial performance
The Group has delivered a strong financial performance in the last 12 months, despite the challenges of Covid-19, Brexit, and the global microchip shortage, which impacts our hardware solutions. Both our revenue and profit has grown which is an outstanding achievement. In addition, we have extended a number of key customer contracts and acquired multiple new large fleet customers which will underpin our future growth. Following IPO, the Company is well capitalised and in a strong position to invest into attractive opportunities to accelerate our future growth plans.
The Company's strategy is to develop long-term relationships with its customers, underpinned by our award-winning technology platform and SaaS contracts, and this has resulted in another year of less than 1% customer churn. The Company's growth is driven by a combination of expanding our relationship with these long-term customers through the sale of additional products and winning new customers.
Following the IPO, we aim to realise the significant revenue potential within the existing customer base and to further up-sell and cross-sell Microlise's products.
Environmental and Social impact
One of the drivers of the Group's growth will be the growing demand of the transport industry to reduce its environmental impact. Our platform delivers quantifiable reductions in fuel use and GHG emissions.
Fuel use is typically one of a fleet operator's largest variable costs. Over the past 15 years, higher fuel prices and raised awareness of environmental issues has led fleet operators to require new products, technologies and services that offer fuel efficiencies. The Group's platform addresses this need, delivering quantifiable savings in fuel use, primarily through reducing mileage and engine idling, and improving driver performance. We estimate that our platform has saved customers over 164 million litres of fuel over the past five years, equivalent to 430 million kilograms of CO2.
Our qualification for London Stock Exchange's Green Economy Mark recognises our positive impact as a company that derives a majority of its total annual revenue from products and services that contribute to the global green economy.
Outlook
Microlise is ready to capitalise on what we believe to be a major growth opportunity. Fleet operators are under pressure to meet increased environmental regulations, drive efficiencies and want more integration across supply chains. The pandemic, Brexit and recent driver shortages have raised even greater awareness of the need to optimise the movement of goods efficiently and sustainably which plays into our strengths as a Company.
I would like to thank our staff for their hard work during what has been a challenging year. As with all technology companies, it is the commitment, tenacity and creativity of our people that drives our innovation and growth.
I also want to welcome our new shareholders. We believe that the combination of an exceptional workforce, strong management, and a clear strategy positions Microlise to take advantage of opportunities in our chosen markets to deliver long-term, sustainable growth.
Jon Lee
Non-Executive Chairman
Microlise
28 September 2021
Chief Executive's Statement
Overview
I am pleased to report Microlise has performed well during a challenging 12-month period marked by COVID-19, Brexit, and a well-publicised global microchip shortage.
Our success is reflected in our strong financial performance with impressive growth in both revenues and profits being achieved. This is despite the microchip shortage which has led to higher component costs for our hardware solutions in 2021.
We are particularly proud of another period of exceptionally low customer churn, which was 0.1% (2020: 0.6%), measured in terms of recurring revenues proving the importance of Microlise's end-to-end platform to our customers. In addition, we are proud to have extended our relationships with a number of existing customers including JCB post period in August 2021.
Customers
The Group has a leading position in the UK where customers controlling 88% of the grocery retail market, and 58% of UK large HGV fleet operators (defined as comprising more than 500 vehicles) use the Microlise platform. This diverse customer base, with over 400 enterprise customers, serves customers with a broad range of end markets including third party logistics, grocery, construction and pharmaceutical. In the last 12 months, we have renewed and extended a number of our key existing customer relationships including JCB, and MAN.
In addition to agreeing new long-term contracts with existing customers, we continued to grow our customer base, securing 50 new customers during the period, including Clipper Logistics Plc. This is an excellent performance, and a testament to our fantastic sales team, who have successfully overcome significant operational disruption as the pandemic limited their ability to conduct face to face meetings with prospective clients.
We have established footholds in France and Australia with several large enterprise customers in each geography. These countries offer similar market opportunities to the UK where demand is set to be driven by the need for fleet operators to comply with increasing environmental regulations, and the need for greater efficiency.
Products
Microlise's proprietary modular platform was specifically developed to provide an end-to-end technology solution for fleet operators.
With more than 150 people in our development function, our investment in research and development resulted in the launch of several new software products over the last 12 months, including a Planning & Optimisation module to support operators to plan quickly and accurately to achieve a lower cost of completion, new Trailer Brake Performance Monitoring technology, and a Driver Hazard Warning app. Through TruTac, we launched TruFleet, which offers a central repository for vehicle maintenance checks, and TruTime which accurately records staff attendance. All these solutions have been well received by our customers.
We have an advanced pipeline of other product developments that will allow us to broaden our product offering further.
People
Our staff across the globe are encouraged to continue to work from home wherever possible, and whilst we have provisioned our locations for the safe return to office working, we do not expect this to change in the short term.
We have continued to recruit, and the Group's workforce has grown from 574 to 613, including adding staff to our operations in France and Australia.
Outlook
The Group has performed well despite the headwinds described above, in particular the global microchip shortage. Management expects this issue to remain for the remainder of this year and estimates the additional cost of premium prices for components over the 18 months to December 2021 to be approximately £0.5 million. I am pleased to say that despite these issues, the Company is confident of meeting market expectations for that period.
Long term, we are confident about the prospects for the Group as fleet operators wrestle with the need to become more efficient and meet demanding environmental regulations. Challenges which our product portfolio can help them meet.
Nadeem Raza
Chief Executive
Microlise
28 September 2021
Chief Financial Officer's Statement
I am very proud of our results for the 12 months to 30 June 2021 with all areas of the business reporting growth and improvement.
The Company's diverse spread of customers, serving all market segments has insulated us against the worst impacts of the pandemic with some customers such as OEM's seeing their ability to trade severely hampered by the lockdown whereas other customers such as those in the food sector faced challenges to keep up with demand.
At IPO, the Group raised gross proceeds of £61.2 million through an oversubscribed fundraising. The fundraising raised gross proceeds of £18.6 million for the Company and approximately £42.6 million for certain selling shareholders.
Revenues
Total revenue grew by 13.9% in the period to £57.0 million (2020: £50.0 million). This was driven by Recurring revenue growth of 9.9% to £35.1 million (2020: £32.0 million) as the Company has continued to acquire new customers and existing customers have grown their fleets and brought additional Microlise products. This is further shown by Run Rate Annual Recurring Revenue (Run Rate ARR) increasing by 23.3% year on year to £36.6m (2020: £29.7 million).
In addition, Hardware and Services revenue grew by 21.2% to £21.8 million (2020: £18.0 million) reflecting an increased number of customer wins during the period, together with a bounce back in hardware and installation revenues from OEM customers that closed their factories for approximately three months in the comparative period due to the pandemic.
Recurring revenue comprises income invoiced for services that are repeatable and consumed and delivered on a monthly basis over the term of a customer contract (e.g. software as a service contracts) Run Rate ARR is an annualisation of the recurring revenue for the month identified (June 2020); it is an indication of the annual value of the recurring revenue for that month and is used by management to monitor the long-term revenue growth of the business.
Other Operating Income
This comprises primarily of £0.6 million (2020: £0.0 million) research & development expenditure credit "RDEC" scheme and £0.1 million (2020: £0.5 million) furlough payments received in the period.
Gross Profits
Gross Profits grew by 15.4% in the period to £32.8 million (2020: £28.4 million).
Recurring gross profit grew by 16.8% to £27.1 million and hardware and services gross profit grew by 9.5% to £5.7 million. Recurring gross margins increased 6.3% to 77.2% (2020: 72.6%). Year-on-year Hardware gross margin reduced from 12.0% in 2020 to 9.8% in 2021 due to the premium prices that have been paid on some components in 2021 as a result of the global chip shortage combined with changes in the hardware mix. Year-on-year Services gross margin increased by 4.1% to 70.9% (2020: 68.1%). Overall gross margin increased from 56.9% in 2020 to 57.6% in 2021.
Administrative Expenses
Excluding depreciation charges, administrative expenses grew by £3.8 million year on year in line with the Group's strategic plans and management expectations. This was primarily driven by increases in staff costs resulting from increases in overall headcount as we invested in our internal development team and support functions.
EBITDA
EBITDA increased by 36.7% to £7.6 million (2020: £5.5 million), reflecting the operational leverage of the business. EBITDA margin increased by 20.0% to 13.3% (2020: 11.1%)
Taxation
Group taxation grew from a credit of £0.7 million in 2020 to a charge of £1.1 million in 2021. This was primarily driven by two changes. Firstly:
· the Group moved from the small company classification (small and medium enterprise scheme) to the large company classification (RDEC scheme) with respect to R&D tax credits. This reduced the amount which could be claimed but also moved the credit to other operating income. The RDEC credit during the year was £0.6 million which will offset the £1.1 million charge in the year. Secondly
· the change in corporation tax rate from 19% to 25% from April 2023 resulted in an increase in the deferred tax provision year-on-year of £0.6 million
Cash
Cash balances at 30 June 2021 were £9.7 million which was slightly ahead of management expectations.
Post period end, the IPO resulted in a net cash injection to the Group of £15.8 million after the balance of costs. The Group has repaid all bank debt and continues to maintain sufficient cash reserves to fund its working capital requirements, planned product and software development together and any expected short-term geographic expansion. In addition, the Group maintains an existing standby revolving credit facility that is in place to support the Group's M&A strategy in the event that attractive accretive opportunities arise.
Capitalised Software Development Costs
The Group expects to continue to invest heavily in product development. The costs are incurred through the Group's teams in the UK and offshore development office in Pune, India. Where such work is expected to result in future revenue, costs incurred that meet the definition of software development in accordance with IAS38, Intangible Assets, are capitalised in the statement of financial position. During the 12 months to 30 June 2021 the Group capitalised £1.2 million in respect of software development (2020: £0.4 million).
Capital Re-organisation
In June 2021, in preparation for the IPO, the Group undertook a capital re-organisation. This involved issuing 51,043,537 bonus shares utilising the merger reserve. This was followed by a share capital reduction reducing the nominal value from £1 for A, C and D ordinary shares and from £1.55 for B ordinary shares to £0.002 per share with the reduction in capital transferred to retained earnings. As a result the issued ordinary share capital increased from 40,552 shares to 51,084,089 shares. Post period end, the nominal value of the ordinary shares was reduced from £0.002 to £0.001 which increased the ordinary share capital to 102,168,178 shares
Earnings Per Share
Basic earnings per share were 2.2p (2020: 2.8p). The reduction is due to an increased deferred corporation tax provision required due to the increase in the UK tax rate from 19% to 25% in April 2023. Profit before tax increased by 214.4% to £2.2 million (2020: £0.7 million).
Bill Wynn
Chief Financial Officer
Microlise
28 September 2021
Interim unaudited Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
|
|
| Year ended | Year ended |
|
|
| 2021 | 2020 |
|
| Note | £'000 | £'000 |
| Revenue | 1 | 56,960 | 49,999 |
| Cost of sales |
| (24,134) | (21,559) |
| Gross profit |
| 32,826 | 28,440 |
| Other operating income |
| 742 | 537 |
| Administrative expenses |
| (30,494) | (27,771) |
| Operating profit |
| 3,074 | 1,206 |
|
|
|
|
|
| Interest income |
| - | 285 |
| Interest expense |
| (637) | (708) |
| Share of loss of associate net of tax |
| (205) | (73) |
|
Profit before tax
|
| 2,232 | 710 |
| Taxation | 2 | (1,108) | 719 |
|
|
|
|
|
| Profit for the year |
| 1,124 | 1,429 |
|
|
|
|
|
| Other comprehensive income for the year |
|
|
|
| Currency translation differences |
| - | 19 |
|
|
|
|
|
| Total comprehensive income for the year attributable to the equity shareholders of Microlise Group PLC |
| 1,124 | 1,448 |
|
|
|
|
|
|
|
|
|
|
| Earnings per share |
|
|
|
| Basic and diluted earnings per share (pence) | 3 | 2.2 | 2.8 |
Interim unaudited Consolidated Statement of Changes in Equity
|
| Share Capital | Merger Reserve | Retained earnings | Total Equity |
|
| £'000 | £'000 | £'000 | £'000 |
| At 1 July 2019 | 44 | 55,172 | (600) | 54,616 |
|
Comprehensive income for the year to 30 June 2020 |
|
|
|
|
| Profit for the year | - | - | 1,429 | 1,429 |
| Other comprehensive income | - | - | 19 | 19 |
| Total comprehensive income for the year | - | - | 1,448 | 1,448 |
|
At 30 June 2020 | 44 | 55,172 | 848 | 56,064 |
|
Comprehensive income for the year to 30 June 2021 |
|
|
|
|
| Profit for the year | - | - | 1,124 | 1,124 |
| Other comprehensive income | - | - | - | - |
| Total comprehensive income for the year | - | - | 1,124 | 1,124 |
|
|
|
|
|
|
| Bonus issue of shares (note 5) | 55,172 | (55,172) | - | - |
| Reduction of share capital (note 5) | (55,114) | - | 55,114 | - |
| Total transactions with owners | 58 | (55,172) | 55,114 | - |
|
|
|
|
|
|
| At 30 June 2021 | 102 | - | 57,086 | 57,188 |
|
|
|
|
|
|
Interim unaudited Consolidated Statement of Financial Position
as at 30 June 2021 and 30 June 2020
|
| Note | 30 June | 30 June |
|
|
| 2021 | 2020 |
|
|
| £'000 | £'000 |
| Assets |
|
|
|
| Non-current assets |
|
|
|
| Property, plant, and equipment |
| 7,930 | 8,636 |
| Intangible assets | 4 | 76,128 | 77,133 |
| Investments in associate |
| 1,773 | 1,978 |
| Deferred tax |
| 808 | 1,307 |
| Trade and other receivables |
| 2,600 | 3,465 |
| Total non-current assets |
| 89,239 | 92,519 |
|
|
|
|
|
| Current assets |
|
|
|
| Inventories |
| 3,897 | 3,604 |
| Trade and other receivables |
| 18,840 | 15,126 |
| Corporation tax recoverable |
| 1,610 | 988 |
| Cash and cash equivalents |
| 9,718 | 10,061 |
| Total current assets |
| 34,065 | 29,779 |
|
Total assets |
| 123,304 | 122,298 |
|
|
|
|
|
| Current liabilities |
|
|
|
| Financial liabilities |
| (2,966) | (3,232) |
| Trade and other payables |
| (29,065) | (25,393) |
| Total current liabilities |
| (32,031) | (28,625) |
|
|
|
|
|
| Non current liabilities |
|
|
|
| Financial liabilities |
| (13,133) | (15,711) |
| Trade and other payables |
| (16,224) | (17,779) |
| Deferred tax |
| (4,728) | (4,119) |
| Total non current liabilities |
| (34,085) | (37,609) |
|
|
|
|
|
| Total liabilities |
| (66,116) | (66,234) |
|
|
|
|
|
| Net assets |
| 57,188 | 56,064 |
|
|
|
|
|
| Equity |
|
|
|
| Issued share capital | 5 | 102 | 44 |
| Merger reserve | 5 | - | 55,172 |
| Retained earnings |
| 57,086 | 848 |
| Total equity |
| 57,188 | 56,064 |
Interim unaudited Consolidated Statement of Cash Flows
for the year ended 30 June 2021
|
|
| Year ended | Year ended |
|
| Note | 2021 | 2020 |
|
|
| £'000 | £'000 |
| Cash flows from operating activities |
|
|
|
| Cash generated from operations | A | 6,895 | 8,913 |
| Tax (paid)/received |
| (42) | 1,820 |
| Net cash generated from operating activities |
| 6,853 | 10,733 |
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
| Purchase of property, plant, and equipment |
| (913) | (1,235) |
| Additions to intangible assets |
| (1,476) | (778) |
| Purchase of subsidiaries, net of cash acquired |
| (1,000) | (3,087) |
| Interest received |
| - | 108 |
| Net cash used in investing activities |
| (3,389) | (4,992) |
|
|
|
|
|
| Cash flows from financing activities |
|
|
|
| Interest paid |
| (530) | (650) |
| Lease liability payments |
| (792) | (803) |
| Receipt of bank loans |
| - | 2,500 |
| Repayment of bank loans |
| (1,936) | (1,219) |
| Repayment of other loans |
| (549) | (802) |
| Net cash used in financing activities |
| (3,807) | (974) |
|
|
|
|
|
| Net (decrease)/increase in cash and cash equivalents |
| (343) | 4,767 |
| Cash and cash equivalents at beginning of the year |
| 10,061 | 5,287 |
| Foreign exchange gains |
| - | 7 |
| Cash and cash equivalents at end of the year | B | 9,718 | 10,061 |
|
|
|
|
|
Notes to the Interim unaudited Consolidated Statement of Cash Flows
for the year ended 30 June 2021
A. Cash generated from operations
The reconciliation of profit for the year to cash generated from operations is set out below:
|
|
| Year ended | Year ended |
|
|
| 2021 | 2020 |
|
|
| £'000 | £'000 |
| Profit for the year |
| 1,124 | 1,429 |
| Adjustments for: |
|
|
|
| Depreciation |
| 2,012 | 2,176 |
| Amortisation |
| 2,480 | 2,151 |
| Loss on disposal of fixed assets |
| - | 30 |
| Net interest costs |
| 637 | 423 |
| Share of loss of associate |
| 205 | 73 |
| Tax charge/(credit) |
| 1,108 | (719) |
|
|
| 7,566 | 5,563 |
| Working capital movements: |
|
|
|
| (Increase)/decrease in inventories |
| (293) | (1,087) |
| (Increase)/decrease in trade and other receivables |
| (2,849) | 713 |
| Increase in trade and other payables |
| 2,471 | 3,724 |
| Cash generated from operations |
| 6,895 | 8,913 |
|
|
|
|
|
B. Analysis of net debt
|
| At 1 July 2019 | Cash flow | Non-cash changes | At |
|
|
|
|
| 2020 |
|
| £'000 | £'000 | £'000 | £'000 |
| Bank loans | (15,529) | (1,281) | (29) | (16,839) |
| Other loans | (1,531) | 802 | - | (729) |
| Lease liabilities | (1,758) | 866 | (477) | (1,369) |
| Cash used in financing activities | (18,818) | 387 | (506)
| (18,937) |
|
|
|
|
|
|
| Cash and cash equivalents | 5,287 | 4,767 | 7 | 10,061 |
| Net debt | (13,531) | 5,154 | (499) | (8,876) |
|
| At 1 July | Cash flow | Non-cash changes | At |
|
| 2020 |
|
| 2021 |
|
| £'000 | £'000 | £'000 | £'000 |
| Bank loans | (16,839) | 1,936 | (45) | (14,948) |
| Other loans | (729) | 549 | (65) | (245) |
| Lease liabilities | (1,369) | 838 | (374) | (905) |
| Cash used in financing activities | (18,937) | 3,323 | (484) | (16,098) |
|
|
|
|
|
|
| Cash and cash equivalents | 10,061 | (343) | - | 9,718 |
| Net debt | (8,876) | 2,980 | (484) | (6,380) |
Notes to the interim financial information
General information
The parent company is a holding company, and 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, limited by shares, incorporated, and domiciled in England. It reregistered as a PLC on 14 July 2021 and changed its name from Microlise Group Holdings Limited to Microlise Group PLC. The address of the registered office is Farrington Way, Eastwood, Nottingham, NG16 3AG.
Basis of preparation
This interim announcement and consolidated interim financial information have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the United Kingdom and as effective for periods beginning on or after 1 July 2020 ('IFRS'). The company has extended its current accounting period by six months from a year to June 2021 to the eighteen months ending 31 December 2021 and accordingly is presenting interim financial statements for the year to 30 June 21.
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 18-month period ending 31 December 2021 and there are not expected to be any changes in the Group's accounting policies compared to those applied at 30 June 2020.
A full description of those accounting policies is contained within the historical financial information included in the AIM admission document which is available on our website.
There are no new standards, interpretations and amendments 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 eighteen-month period ending 31 December 2021.
The financial information does not contain all the information that is required to be disclosed in a full set of IFRS financial statements. The financial information for the year ended 30 June 2021 has been reviewed but is unaudited and does not constitute the Group's statutory financial statements for the period.
The comparative financial information for the full year ended 30 June 2020 has been derived from the financial information for that period included in the company's AIM admission document. The statutory financial statements for the year ended 30 June 2020 were prepared under UK GAAP and 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 years presented, unless otherwise stated.
Going concern and post balance sheet event
The Company was listed on AIM on 22 July 2021 and raised an additional £14m of cash net of the related listing expenses. On 16 July 2021 Microlise entered into a New Facility Agreement with HSBC in respect of a revolving facility of £20 million. The facility may be used for general corporate and working capital purposes and for permitted acquisitions. All existing loans were repaid from cash balances following the admission to AIM.
The Group has prepared forecasts for the period to 31 December 2024 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.
1. Segmental information and non-Gaap adjusted results
The Microlise Group operates in the telematics market and considers all revenue to relate to the same.
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.
|
|
|
| Year ended | Year ended |
|
|
|
| £'000 | £'000 |
| By type |
|
|
|
|
| Revenue recognised at a point in time: |
|
|
|
|
| Supply of hardware and installation |
|
| 18,788 | 15,398 |
|
|
|
|
|
|
| Revenue recognised over time: |
|
|
|
|
| Professional services including project management |
|
| 3,026 | 2,605 |
| Managed service agreement income |
|
| 31,623 | 28,003 |
| Other support and maintenance services |
|
| 3,523 | 3,993 |
|
|
|
| 38,172 | 34,601 |
|
|
|
| 56,960 | 49,999 |
| By destination: |
|
|
|
|
| UK |
|
| 52,437 | 44,765 |
| Rest of Europe |
|
| 1,225 | 1,405 |
| Rest of the World |
|
| 3,298 | 3,829 |
| Total revenue |
|
| 56,960 | 49,999 |
One customer contributed £15.2m and 27% to the year ended 30 June 2021 (2020: £13.4m and 27% to the year).
Adjusted results
EBITDA is a commonly used measure in which earnings are stated before net finance income, amortisation, and depreciation as a proxy for cash generated from trading.
The group now qualifies for large company R&D tax reliefs with the RDEC credit included in other operating income above operating profit for the year ended 30 June 2021 and in line with common practice is included in the Group's calculation of EBITDA.
|
|
|
|
| Year ended | Year ended |
|
|
|
|
| £'000 | £'000 |
|
|
|
|
|
|
|
| Operating profit before interest and share of associate |
|
|
| 3,074 | 1,206 |
| Depreciation |
|
|
| 2,012 | 2,176 |
| Amortisation of intangible assets |
|
|
| 2,480 | 2,151 |
| EBITDA |
|
|
| 7,566 | 5,533 |
The directors consider the Group to comprise two complementary segments in respect of fleet management services (Microlise) and tachograph specific software and analysis services, a segment acquired on 9 March 2020 (Trutac).
|
|
| Microlise | TruTac | Total Year ended 30 June 2021 | Microlise | Trutac | Total Year ended 2020 Total |
|
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Revenue |
| 53,763 | 3,197 | 56,960 | 49,276 | 723 | 49,999 |
|
|
|
|
|
|
|
|
|
| Depreciation and amortisation |
| 4,076 | 416 | 4,492 | 4,227 | 100 | 4,327 |
|
|
|
|
|
|
|
|
|
| Operating profit |
| 2,642 | 432 | 3,074 | 1,141 | 65 | 1,206 |
| Net interest |
| (630) | (7) | (637) | (423) |
| (423) |
| Share of associate loss |
| (205) | - | (205) | (73) |
| (73) |
| Profit before tax |
| 1,807 | 425 | 2,232 | 645 | 65 | 710 |
|
|
|
|
|
|
|
|
|
2. Tax on profit
|
|
|
| Year ended | Year ended |
|
|
|
| £'000 | £'000 |
| Current taxation |
|
|
|
|
| Current period |
|
| - | 982 |
| Prior year adjustments |
|
| - | 65 |
|
|
|
| - | 1,047 |
| Deferred taxation |
|
|
|
|
| Origination and reversal of timing differences |
|
| (219) | (5) |
| Change in rate from 19 to 25% (2020: 17% to 19%) |
|
| (889) | (323) |
|
|
|
| - | (328) |
| Tax (charge)/credit on profit |
|
| (1,108) | 719 |
The Finance Act 2021 enacted a corporation tax rate of 25% applying to taxable profits from April 2023 (19% applicable until March 2023). This has accordingly been applied at 30 June 2021 to deferred tax reversals expected to occur from that date and, in particular, has increased the deferred tax liability derived from intangible assets arising on consolidation that will have no impact at an entity level or on cash tax transactions.
Factors affecting the tax for the year
The tax charge/(credit) on the profit for the period differs from applying the standard rate of corporation tax in the UK of 19% (2020: 19%). The differences are reconciled below:
|
|
|
| Year ended | Year ended |
|
|
|
| £'000 | £'000 |
| Profit before taxation |
|
| 2,232 | 710 |
|
|
|
|
|
|
| Corporation tax at standard rate |
|
| 424 | 135 |
| Factors affecting charge for the period: |
|
|
|
|
| Disallowable expenses |
|
| 74 | 55 |
| Research and development allowances (small group) |
|
| - | (1,359) |
| Surrender of losses for R&D tax credit |
|
| - | 305 |
| Impact of RDEC income presented in other operating income (large group) |
|
|
(110) | - |
| Deferred tax not previously recognised |
|
| (169) | - |
| Other differences |
|
| - | (113) |
| Adjustments in respect of prior periods |
|
| - | (65) |
| Effect of different tax rates |
|
| 889 | 323 |
| Tax charge/(credit) on profit |
|
| 1,108 | (719) |
In addition, an RDEC credit of £580,000 is included in other operating income for the year ended 30 June 2021 (£nil for the year ended 30 June 2020).
3. Earnings per share
|
|
| Year ended | Year ended |
|
|
| £'000 | £'000 |
|
|
|
|
|
| Profit used in calculating EPS (£'000) |
| 1,124 | 1,429 |
| Number of shares for basic and diluted EPS |
| 51,084,089 | 51,084,089 |
| Basic and diluted earnings per share (pence) |
| 2.2 | 2.8 |
There were no dilutive options or shares in either year and the number of shares stated above is the number in issue at 30 June 2021.
There has been no change in shareholders or relative holdings during the two-year period, but a bonus issue of shares was made in June 2021 pro rata to prior holdings. Therefore the June 2021 number of shares in issue is applied in deriving a direct comparative for earnings per share for the prior year.
4. Intangible fixed assets
|
|
|
| Customer relationships |
|
|
|
|
|
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
|
|
| Cost |
|
|
|
|
|
|
|
| At 1 July 2019 |
| 49,208 | 15,893 | 5,302 | 2,546 | - | 72,949 |
| Additions |
| - | - | 359 | - | 419 | 778 |
| Acquisitions |
| 3,092 | 1,887 | 1,891 | 165 | - | 7,035 |
| At 30 June 2020 |
| 52,300 | 17,780 | 7,552 | 2,711 | 419 | 80,762 |
|
|
|
|
|
|
|
|
|
| Amortisation |
|
|
|
|
|
|
|
| At 1 July 2019 |
| - | 767 | 580 | 131 | - | 1,478 |
| Charge for the year |
| - | 1,039 | 939 | 173 | - | 2,151 |
| At 30 June 2020 |
| - | 1,806 | 1,519 | 304 | - | 3,629 |
|
|
|
|
|
|
|
|
|
| Net book value |
|
|
|
|
|
|
|
| At 30 June 2020 |
| 52,300 | 15,974 | 6,033 | 2,407 | 419 | 77,133 |
|
|
|
|
|
|
|
|
|
| Cost |
|
|
|
|
|
|
|
| At 1 July 2020 |
| 52,300 | 17,780 | 7,552 | 2,711 | 419 | 80,762 |
| Additions |
| - | - | 1,205 | - | 270 | 1,475 |
| At 30 June 2021 |
| 52,300 | 17,780 | 8,757 | 2,711 | 689 | 82,237 |
|
|
|
|
|
|
|
|
|
| Amortisation |
|
|
|
|
|
|
|
| At 1 July 2020 |
| - | 1,806 | 1,519 | 304 | - | 3,629 |
| Charge for the year |
| - | 1,138 | 1,117 | 181 | 44 | 2,480 |
| At 30 June 2021 |
| - | 2,944 | 2,636 | 485 | 44 | 6,109 |
|
|
|
|
|
|
|
|
|
| Net book value |
|
|
|
|
|
|
|
| At 30 June 2021 |
| 52,300 | 14,836 | 6,121 | 2,226 | 645 | 76,128 |
Intangible assets have arisen principally on acquisition with a continuing investment in technology and software.
5. Share capital
Movements in share capital have been as follows:
|
|
| A ordinary | B ordinary | C ordinary | D ordinary | Total |
| At 1 July 2019 and 30 June 2021 |
|
|
|
|
|
|
| Number of shares |
| 33,902 | 5,962 | 325 | 363 | 40,552 |
| Nominal value/£'000 |
| 34 | 9 | - | 1 | 44 |
| Bonus issue June 2021 |
|
|
|
|
|
|
| Number of shares |
| 42,673,062 | 7,504,477 | 409,083 | 456,915 | 51,043,537
|
| Nominal value/£'000 |
| 42,673 | 11,633 | 409 | 457 | 55,172 |
| Share capital reduction |
|
|
|
|
|
|
| Nominal value/£'000 |
| (42,622) | (11,627) | (408) | (457) | (55,114) |
| At 30 June 2021 |
|
|
|
|
|
|
| Number of shares |
| 42,706,964 | 7,510,439 | 409,408 | 457,278 | 51,084,089 |
| Nominal value/£'000 |
| 85 | 15 | 1 | 1 | 102 |
In June 2021, 51,043,537 bonus shares were issued as above utilising the merger reserve. This was followed by a share capital reduction reducing the nominal value from £1 for A, C and D ordinary shares and from £1.55 for B ordinary shares to £0.002 per share with the reduction in capital transferred to retained earnings.
Following the period end, on 14 July 2021, all A, B, C and D £0.02 ordinary shares were redesignated as £0.02 ordinary shares with equal rights.
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