Microlise Grp Regulatory News (SAAS)

31 January 2023

Microlise Group plc

("Microlise", "the Group" or "the Company")

FY2022 Trading Update

10% growth in ARR and strong cash generation

Microlise Group plc (AIM: SAAS), a leading provider of transport management software to fleet operators, is pleased to provide a full year update on trading for the year ending 31 December 2022 ("the Period"). The Group expects to publish its full year results for the Period in late March 2023.

Highlights

· Group revenue growth of 5% to £63.2m1 (2021: £60.3m)

· Adjusted EBITDA2,3 slightly ahead of market expectations

· Annual Recurring Revenue (ARR) run rate as at 31 December 2022 up 10% to £42.6m (2021: £38.9m)

· Cash at Period end of £16.7m4, 18% ahead of expectation and up 27% since 31 December 2021

· More than 250 new customers added in the Period

· Existing customer churn remains low at 0.4%

· Great Place to Work (GPTW) accreditation achieved across the Microlise group in December 2022

Financial

The Board expects to report year-on-year revenue growth of 5% to £63.2m, despite industry headwinds caused by microchip supply chain issues and delays in project deployment with non-OEM customers. This resulted in non-recurring revenues slightly below our forecasts. However, the Company delivered record levels of OEM sales which impacted sales mix and had positive working capital effect. As a result of the change in sales mix, our Annual Recurring Revenues grew at a faster rate than revenue, by 10% to £42.6m, with recurring revenues now representing 64% of the total.

Customer churn was maintained at an extremely low level of 0.4% and the Group continued to win new orders and customers. This resulted in an order book that is at a record level. Although we expect supply chain issues to persist in the coming months, we anticipate the situation easing in the second half of 2023.

Furthermore, Microlise has carefully managed the supply chain disruption, improving its cost controls and the efficiency of the business, such that margins have improved with EBITDA slightly ahead of market expectations.

The balance sheet has greatly strengthened during the year, with net cash at the Period end up 27% to £16.7m, (FY21: £13.2m). In addition, the Group has an undrawn £20m Revolving Credit Facility. This provides substantial headroom for Microlise to continue to deliver against its strategic goals.

Looking forward we also currently have a very strong pipeline and are therefore directing investment into our global sales force to enable us to capitalise on the many opportunities that are being presented to us.

Customers

The Group added over 250 new customers during the year and expanded or extended its relationships with numerous existing customers. The Company continues to have high rates of customer retention, experiencing very low churn of 0.4% during the Period. This reflects our strong customer relationships and the importance of our products to our customer base.

Microlise Transport Conference

The Microlise Transport Conference returned in May 2022 following a two-year hiatus and, as one of Europe's largest road transport events, was a resounding success. Microlise is already planning its 2023 event, set to be held on 17 May. The invitation to the conference is open to investors and the Company will be hosting sessions dedicated to investors at the event. For further details on how to register please contact Bob Huxford at microlise@secnewgate.co.uk.

Nadeem Raza, CEO, Microlise said: "I am delighted to report that we shipped more units than ever during 2022, despite the well-documented supply chain issues that clouded our markets throughout the year. This pays testament to the strength of our products and the quality of our staff who have been agile and resourceful in the face of any issues, adapting where appropriate while improving efficiencies and the positioning of our Company.

"Also, our new Great Place to Work (GPTW) accreditation reflects the passion and positive attitude of our people, all of whom are committed to building a supportive atmosphere. It recognises our commitment to staff and further establishes Microlise's high-performing workplace culture.

"Although we can expect supply chain issues to continue to impact our markets in 2023, we do anticipate improvements during the second half of the year. This, combined with a record order book and healthy pipeline of opportunities across all the markets in which we operate, gives us confidence for the year ahead."

Notes:

All financials are based on unaudited figures

1 Analysts' consensus revenue expectations range from £61m to £65m

2  Earnings Before interest, tax, depreciation, amortisation and share based payments

3  Consensus Adjusted EBITDA expectations for 2022 of £8.0m

4  Consensus net cash expectations at 31 December 2022 of £14.2m

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 463 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 670.

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.