Pebble Beach Systems Reports Strong H1 2025 Growth with 33% Order Increase and Improved Profitability

Margins, profit and cash: moving in the right direction

Adjusted EBITDA increased to £2.0m with a 33% margin, up from 27%. Management expects a further improvement in H2 25 as the full half-year of savings comes through. Despite £0.75m of non-recurring costs related to the January actions, the Group posted profit before tax of £0.5m and net profit of £0.46m. Basic EPS was 0.4p and adjusted EPS 0.8p.

Cash performance is healthier. Operating cash generation (before interest and exceptionals) was £1.8m, and cash conversion held at 101% of adjusted EBITDA. Cash at period end was £0.6m, gross bank debt was £4.1m, and net debt (ex IFRS 16) was £3.4m. The board continues to target a net cash position during 2026.

Balance sheet and facilities

Equity has improved, though still slightly negative at £0.13m compared with £0.49m negative at year-end 2024. The company is using all £4.1m of its available facilities and repaid £0.5m in the period. The loan agreement runs to 30 October 2026 with covenants and a repayment schedule in place. Management states it maintains a good banking relationship and is confident about any extensions required beyond that date.

Outlook: pipeline supports upgraded guidance

The weighted pipeline sits at £10.6m, up 8% year on year. Management says favourable project order timing has improved visibility of full-year project revenues and should reduce the usual Q4 pressure. With a solid sales pipeline and improved visibility of recurring revenues, the board remains confident in delivering against recently upgraded market expectations for the year. They also flag a focus on organic growth complemented by selective inorganic opportunities.

What looks positive

• Order intake up 33% to £6.5m and pipeline of £10.6m – good line of sight.
• Adjusted EBITDA margin up to 33% with scope for further H2 improvement.
• Cash generation strengthening – Cash EBITDA £1.3m and cash conversion at 101%.
• North America momentum, with revenue growth of 125% highlighted.
• Net debt reduced to £3.4m and gross bank debt down to £4.1m.

What to keep an eye on

• Non-recurring costs of £0.75m in H1 25 were sizeable – we should see these fall away.
• Negative equity of £0.13m – improved, but still a marker to watch.
• All bank facilities were drawn at 30 June 2025 – continued debt reduction is key.
• Reduced investment in IP-only technologies improves cash now but carries medium-term product risk if the market pivots faster than expected.
• Conversion of the £10.6m pipeline and maintaining SLA renewal momentum.

Jargon buster

• SLA revenue – Service Level Agreement income from support and maintenance contracts, typically recurring and higher visibility.
• Adjusted EBITDA – earnings before interest, tax, depreciation and amortisation, excluding non-recurring items and foreign exchange gains/losses.
• Cash EBITDA – adjusted EBITDA less capitalised development costs; Pebble’s internal measure of cash profitability.
• Capitalised development costs – R&D spend booked as an intangible asset to be amortised over time.
• Weighted pipeline – management’s probability-weighted view of potential orders.

My take

This is a solid first half. Pebble has done the heavy lifting on costs, and the benefits are clear in margins and cash generation. The shift to focus on core capabilities while easing off IP-only development looks sensible given adoption delays, though it’s a balancing act the team must keep reassessing.

With orders up, a larger pipeline, and better project timing, the perennial Q4 crunch should ease. Debt is coming down and the aim for net cash in 2026 feels credible if execution holds. The remaining watch points are negative equity, full facility utilisation, and ensuring product investment stays sufficient to capture future shifts in playout technology. Overall, a constructive update.