Microlise Reports Robust H1 2025 Growth with 465% Profit Surge and Strategic Expansion

Microlise H1 2025: Revenue Up 12.6%, Profit Before Tax Up 465%

Microlise Group plc has delivered a strong first half. Revenue rose 12.6% to £44.1 million, adjusted EBITDA grew 18.8% to £6.2 million, and profit before tax surged to £1.9 million (up 465% vs H1 2024). The business is leaning into higher-margin execution, a healthier order book, and a tighter go-to-market approach, while keeping churn rock-bottom at 0.5%.

The Board has upped the interim dividend to 0.60p per share (H1 2024: 0.57p), signalling confidence in cash generation and future growth.

Key numbers investors should note

Metric	H1 2025	H1 2024	Change
Revenue	£44.1m	£39.1m	+12.6%
Recurring revenue	£29.5m	£26.6m	+11.1%
Recurring revenue mix	67.0%	67.9%	-0.9ppts
Adjusted EBITDA	£6.2m	£5.2m	+18.8%
Adjusted EBITDA margin	14.1%	13.4%	+0.7ppts
Profit before tax	£1.9m	£0.3m	+465%
Adjusted PBT	£3.6m	£2.8m	+26.5%
Adjusted basic EPS	2.62p	2.18p	+20.2%
Cash and cash equivalents	£11.2m	£8.9m	+24.7%
ARR run rate (annual recurring revenue)	£58.7m	£54.0m	+8.7%
Subscriptions	884,000	827,000	+6.9%
Long-term contract churn (by value)	0.5%	0.5%	Flat

Quick definitions: ARR is annual recurring revenue and is a forward-looking run-rate. EBITDA is earnings before interest, tax, depreciation and amortisation. Churn is the proportion of recurring revenue that cancels over a period.

Growth drivers: hardware recovery, new contracts, and renewals

Non-recurring revenue jumped 15.7% to £14.5 million helped by hardware and installation as new vehicle availability improved. Hardware rose 20.0% to £10.1 million and installation was up 21.9% to £2.6 million. Professional services slipped 8.5% to £1.8 million.

Recurring revenue still did the heavy lifting, up 11.1% to £29.5 million. ARR rose 8.7% to £58.7 million, supported by direct customer wins and deliveries from prior awards. New logos and renewals tell the story: 216 new direct customers added, plus multi-year wins with Müller UK and Ireland, Greene King, and Geraldton Fishermen’s Co-Operative (Brolos) in Australia, with further wins in France post-period. Renewals with Maritime, Schenk UK Ltd and City Plumbing Supplies came with increased revenues. The Road Haulage Association partnership was renewed on a multi-year basis.

Recurring revenue quality and customer stickiness

Recurring mix was broadly steady at 67.0% (down 0.9 percentage points) as hardware/installation bounced back. That’s not a negative in itself – the mix shift reflects delivery against a stronger order book. Churn of 0.5% is excellent, underlining the mission-critical nature of Microlise’s software to logistics operations.

Subscriptions increased to 884,000, and gross margin nudged up to 65.6% (from 65.5%). Adjusted EBITDA margin improved to 14.1%, helped by tighter external spend, lean processes and early AI-driven efficiencies.

Margins, costs and operating discipline

Adjusted operating profit rose 25.7% to £3.5 million. Staff costs rose 8.4% to £18.9 million as Microlise added sales and engineering capacity (average headcount 811 vs 794), and marketing spend increased 26% to £1.3 million to drive lead generation. Legal, professional and IT costs were up 28% to £2.4 million due to cybersecurity investment, systems upgrades and third-party licence fees.

Adjusted profit before tax rose 26.5% to £3.6 million. Reported profit before tax jumped to £1.9 million, benefitting from scale and fewer drags compared with last year. The effective tax rate reduced to 32% (H1 2024: 79%) as profit recovered and prior-period effects fell away.

Cash, liquidity and the Trakm8 unwind

Cash and cash equivalents increased to £11.2 million, even after paying a £1.4 million final dividend in June. The £10 million revolving credit facility remains undrawn, with a further £20 million accordion available until April 2027, putting total liquidity at £21.2 million at period end.

Adjusted cash from operations was £4.0 million with cash conversion of 64% (H1 2024: 72%), reflecting planned inventory build for H2 rollouts – management expects this to normalise after deployments. Post period end, Microlise received £2.2 million from the sale of its investment in Trakm8 Holdings plc; the company notes this will result in a small overall net loss of £0.23 million.

Strategy check: MicroliseOne, mid-market, and Australia certification

MicroliseOne – the project to consolidate the full suite on a single platform and interface – is progressing, with consistent secure user ID and better tools for third-party integration already rolling out. This should make cross-sell and upsell smoother and reduce friction for customers.

Mid-market penetration is working: the company signed more new mid-tier fleets (100-500 vehicles) than large fleets in the period. International expansion is on track too. Notably, Microlise achieved TCA Type Approval in Australia – a mandatory certification for regulated heavy vehicle telematics – opening up a larger addressable market. Integration of Logmaster’s Electronic Work Diary is another regional plus.

On cybersecurity, the business says it is back to full operational strength post the October 2024 incident, has retained all customers, and is investing further in defence. H1 included £381,000 of exceptional insurance income related to the incident, offset by £259,000 of professional fees.

Risks and what to watch in H2 2025

• Project timing: some client projects – especially Transport Management System deployments – have slipped into H2 and 2026 due to customers’ own cyber incidents.
• Customer concentration: one customer accounted for £12.5 million and 28% of revenue in H1 2025.
• Mix and services: the recurring mix dipped slightly and professional services revenue fell 8.5% – worth monitoring if it reflects timing or scope.
• Cost base: legal/professional/IT costs rose 28% as the company invests in cybersecurity and scalability.
• Automotive backdrop: recovery is described as slower, with OEM volumes flat, although improvement is expected in H2.

Dividend and outlook: steady, with pipeline support

The interim dividend is set at 0.60p per share, in line with the progressive dividend policy. Management reiterates confidence for the full year, citing a healthy order book, an expanding product suite, and margin enhancement initiatives already showing through. Market conditions are described as healthy across geographies, with a notable customer focus on cost savings – a core area of Microlise’s value proposition.

Josh’s view: profitable growth with sensible execution

This is a tidy half. Revenue growth is broad-based, margins are moving up, and churn is ultra-low. ARR growth of 8.7% is not fireworks, but it’s solid given last year’s step-up and the stronger non-recurring contribution as vehicle availability normalised.

The strategy is coming together: MicroliseOne for cross-sell economics, mid-market wins, and a bigger Australian opportunity post TCA approval. The balance sheet is conservative with ample liquidity. Key watch-outs are concentration risk, the timing of TMS projects, and keeping a lid on the rising cost lines tied to security and systems. Net-net, it looks like disciplined, profitable growth with a clear runway into H2.