SaaS-based transport management technology developer Microlise Group (LON: SAAS) is growing in the UK and internationally. Broadening the range of services provided to its fleet customers is helping to grow revenues, around two-thirds of which are recurring.
Nottingham-based Microlise has developed a set of modules covering areas such as fleet performance, journey management, safety, compliance and driver connected mobility. There are more than 640,000 subscriptions. Churn rate is less than 1%.
In the past year there have been three acquisitions. The most recent is K-Safe, which has developed road safety products Flare and Flare Aware, which are used by bicycles, e-scooters and motorcycles. It is a hazard warning system, providing awareness and alerts to drivers. Deliveroo and Just Eat are clients and Microlise can off the product to its clients.
In 2023, revenues improved 13% to £71.7m, which incudes recurring revenues of £45m. By the end of the year annual recurring revenues were £47.7m. The other revenues are for hardware and installation services. Pre-tax profit rose from £4.9m to £5.3m. The maiden dividend is 1.725p/share.
Net cash is £16.8m, although this will fall to under £10m after acquisition payments and dividends. That still leaves plenty of cash for further acquisitions.
Since the year end, Microlise has gained a A$20m (£10.3m) five-year contract with WooliesX, part of the Woolworths retail chain in Australia. The roll-out has started and should be completed this year. This provides a solid base for the Australian business.
Microlise joined AIM nearly three years ago and raised money at 135p. The share price went to a significant premium and then trended downwards until early this year. At 162.5p, the performance of the shares has outstripped AIM, which has fallen by more than one-third over the period.
Singer forecasts a jump in 2024 pre-tax profit to £6.7m now that the component and supply chain problems are behind the business, with £8m forecast for the following year. The shares are trading on 33 times prospective earnings, falling to 26 next year.
