Maintel Reports Resilient H1 2025 with Record Pipeline Despite Profit Dip

Maintel H1 2025 at a glance – revenue steady, profits softer

Maintel’s first half of 2025 shows a business holding revenue steady while investing to reignite growth. Group revenue was £46.5m, essentially flat year-on-year (H1 2024: £46.6m). Profitability slipped: gross profit fell to £14.0m with gross margin at 30.1% (H1 2024: £14.7m and 31.6%), and adjusted EBITDA dropped to £3.4m, a 7.2% margin (H1 2024: £4.8m and 10.2%).

The Group reported a loss before tax of £0.8m (H1 2024: £0.3m loss). Adjusted profit before tax, which strips out amortisation, exceptional items and share-based payments, was £1.8m (H1 2024: £3.2m). Basic loss per share was 5.5p, with adjusted EPS at 1.2p (H1 2024: 11.0p).

Key numbers you need to know

Metric	H1 2025	H1 2024	Change
Revenue	£46.5m	£46.6m	(0.2)%
Gross profit	£14.0m	£14.7m	(4.8)%
Adjusted EBITDA	£3.4m	£4.8m	(29.2)%
Loss before tax	£0.8m	£0.3m	(166.7)%
Adjusted PBT	£1.8m	£3.2m	(43.8)%
Basic EPS	(5.5)p	0.5p	n/a
Adjusted EPS	1.2p	11.0p	(89.1)%
Net debt	£18.0m	£15.6m	15.4%
Cash from operations	£2.2m	£6.6m	n/a
Recurring revenue mix	74.3%	78.7%	n/a

Definitions: adjusted EBITDA is earnings before interest, tax, depreciation and amortisation adjusted for exceptional items and share-based payments. Recurring revenue is subscription-like income from services under contract.

What drove the move – mix, churn and investment

Recurring vs project revenue dynamics

Project revenue grew 20.4% to £12.0m (H1 2024: £9.9m) thanks to SD-WAN and networking deployments, which typically precede subscription revenue. However, recurring revenue fell 5.9% to £34.5m due to previously flagged churn on certain legacy on-premise contracts. That shifted the mix: recurring revenue fell to 74.3% of total (H1 2024: 78.7%).

This is the heart of the story. The up-front projects are coming through strongly, but the recurring base took a knock from contract losses in older tech stacks. The company expects associated recurring revenue from recent wins to start showing in H2 2025 and beyond.

Margin pressure and costs

Gross margin dipped to 30.1% from 31.6%, reflecting inflationary pressure and a less favourable project mix versus last year, which benefited from a high-margin one-off component. Adjusted EBITDA margin fell to 7.2% as Maintel invested in IT systems and marketing to accelerate business development, alongside higher employment costs. Headcount reduced by 2.4% to 441, but that saving is not yet visible in margins.

Sales engine – record pipeline and notable wins

Here is the big positive: the sales pipeline reached a record £75 million First Year Value at the end of H1 2025 (H1 2024: £50m). First Year Value includes project revenue plus the first 12 months of recurring revenue. Over £20 million in Total Contract Value was booked in H1 2025, across government, healthcare and retail customers.

Maintel broadened its routes to market – events, digital campaigns, advertising, vendor deals and independent consultants – and fully established a new-customer acquisition team. That work appears to be paying off in pipeline generation.

Post-period contract wins add £9.7m TCV

After the period end, Maintel won a nationwide SD-WAN managed service for a leading UK retailer and a managed Local Network and Wi-Fi solution for a major county police force. Together, those add £9.7m in TCV. This reinforces the company’s weight in secure connectivity – think SD-WAN and managed security – which the business highlights as a core growth pillar.

Cash, debt and the new HSBC facility

Cash generation softened. Cash from operating activities was £2.2m (H1 2024: £6.6m), with free cash flow at negative £0.8m (H1 2024: £3.1m). Capex was lower at £1.6m (H1 2024: £2.8m). Net debt rose to £18.0m, partly reflecting working capital timing and interest payments.

A new financing facility with HSBC was signed in March 2025, maturing July 2028. It comprises a £12.0m revolving credit facility, an £8.0m term loan and a £2.0m overdraft. Covenants are based on EBITDA to net finance charges and net debt to EBITDA, tested quarterly. The refinancing extends runway and simplifies the stack, but with £0.9m of interest in H1 alone, the cost of carry is meaningful until EBITDA improves.

Divisional performance – Network, Projects and Mobile

Network Services – data and cloud offset PSTN decline

Network Services revenue edged up 1.0% to £23.5m with gross margin up to 37.3% (H1 2024: 36.5%). Data connectivity services rose 5.2% to £10.6m and cloud recurring revenue grew 2.5% to £8.1m, offsetting an 8.8% decline in line rental as the market transitions from legacy PSTN to SIP trunking ahead of the 2027 switch-off. This division is underpinning group stability with durable, higher-margin contracts.

Projects and on-premise managed services – legacy churn, strong project wins

Revenue was £21.3m, down 1.7%, with gross margin at 20.6% (H1 2024: 26.0%). Legacy on-premise managed services fell by £2.4m as expected, while project revenue climbed 20.4%. The margin compression reflects last year’s unusually high-margin project element and an unfavourable mix in managed services. The key here is conversion of those projects into recurring income in H2 and 2026.

Mobile – small but higher margin in H1

Mobile revenue was stable at £1.6m, but gross profit rose to £0.8m with a 49.5% margin (H1 2024: 37.7%), helped by the timing of bonuses and one-time elements. Connections fell to 26,275 as the unit remains an adjacent offering focused on the mid-market.

Guidance and board moves – what it means for investors

Revised FY 2025 guidance

Maintel has experienced delays in pipeline closures and lost a significant deal in H2, so guidance is trimmed. The Board now expects FY 2025 revenue of around £95.0m and adjusted EBITDA of around £7.0m, with slightly unfavourable gross margin due to mix. Dividends remain paused while the focus stays on deleveraging.

Leadership updates

Stephen Beynon joined as Non-Executive Chair in August, completing the Board. The operational board has been strengthened with Sarah Roberts appointed Chief Operating Officer. The aim is to sharpen execution as the transformation programme moves through its final phases in 2025 and 2026.

My take – cautious optimism, execution now the swing factor

• Positives: record £75m pipeline, £20m TCV booked in H1, and £9.7m TCV added post period. Network Services is growing with improving margins. The HSBC facility extends maturity to 2028.
• Negatives: recurring revenue base fell 5.9% and the mix hurt margins. Adjusted EBITDA margin dipped to 7.2%. Cash conversion slowed, net debt rose to £18.0m, and H2 has already seen deal delays and a lost opportunity.

In short, the demand indicators are better than the P&L. If Maintel converts the enlarged pipeline at reasonable margins, recurring revenue should rebuild and cash generation should improve. Until then, investors should expect lumpiness, watch covenants and interest costs, and look for steady progress in churn reduction and project-to-recurring conversion.

What I am watching next

• H2 bookings and conversion speed from the £75m pipeline to revenue.
• Recurring revenue trajectory and churn rates, especially in on-premise to cloud migrations.
• Adjusted EBITDA margin delivery against the £7.0m full-year target.
• Cash from operations and net debt trend under the new HSBC facility.
• Gross margin mix in Network Services as SD-WAN and security scale.

Maintel calls this a resilient first half. That is fair. The real test is turning today’s projects and pipeline into tomorrow’s sticky, higher-margin subscriptions. If they do, the financials should follow.