TIDMMAI
RNS Number : 8342M
Maintel Holdings PLC
19 September 2023
Maintel Holdings Plc
("Maintel", the "Company" or the "Group")
Interim results for the six months to 30 June 2023
Project delivery delays unwind in the first half of 2023,
business transformation accelerates.
Maintel Holdings Plc, a leading provider of cloud and managed
communication services, is pleased to announce its unaudited
interim results for the six months to 30 June 2023.
Key Financial Information
Unaudited results for 6 months Increase/
ended 30 June: 2023 2022 (decrease)
Group revenue (GBP'm) 47.5 46.7 1.7%
Gross profit (GBP'm) 16.0 15.3 4.6%
Adjusted EBITDA 3.7 3.6 2.8%
(Loss)before tax (GBP'm) (2.9) (0.5) 480.0%
Adjusted profit before tax ([4])
(GBP'm) 2.0 2.4 (20.8)
Basic (loss)/ earnings per share
(p) (19.1) (1.8) (961.1)%
Adjusted earnings per share ([2])
(p) 2.6 11.1 (76.6)%
Net cash debt([3]) (GBP'm) 21.4 19.4 10.3%
Contracted cloud seats 181,000 160,000 13.1%
Highlights
-- Group revenue was GBP 47.5 m, up 1.7 % (2022: GBP46.7m) with
recurring revenue representing 75.1 % of total revenue (2022:
73.7%).
-- Revenue has increased year-on-year following the easing of
supply chain shortages and the continued successful unwinding of
our contracted order book built up during 2022.
-- Significant progress in implementing the first phase of the
business's turnaround plan and moving to a more efficient operating
model. The Company continues to focus on shifting from generalist
to specialist communications solution designer and provider,
allowing us to add more value to our customers through identifying
joint value creation.
-- In turn recurring revenue grew by 3.3% compared to the same
period in 2022, faster than project revenue (-4.0%), increasing
from 73.7% to 75.1%. We continue to grow secured, contracted and
regular revenues through our cloud communications, network and
security managed service products which have performed well through
the pandemic and still have good prospects for future growth.
-- Revenues from Cloud and software customers increased as a
proportion of total Group revenue to 48.8% (H1 2022: 42.4%) which
is important to the business's market position as a digital
communications specialist.
-- Gross profit increased to GBP16.0m (2022: GBP15.3m) with
gross margin increasing to 33.6% (H1 2022: 32.8% ). This increase
flows from improved commercial relationships with our vendors and
focus and in turn being more successful in securing higher value
contracts within our customer base.
-- Adjusted EBITDA has increased by 2.8%to GBP3.7m (H1 2022: GBP3.6m).
-- Basic loss per share at 19.1p (H1 2022: loss per share at
1.8p), flows from one-off restructuring costs (GBP1.9m) which pay
back within one year, plus increased interest charges (FY23:
GBP1.0m, FY22: GBP0.4m) arising from rising SONIA interest
rates.
-- The business's net debt([3]) increased to GBP21.4m, (2022:
GBP19.4m) owing almost exclusively to restructuring exceptional
costs and increased debt servicing charges. The benefits of
restructuring will be realised quickly and permanently.
Operational highlights
-- H1 has been a period of focus on the turnaround plan and
implementation of new ways of working which will have sustainable
and progressive benefits.
-- The product and sales teams are now fully aligned on the
design and provision of specialist digital communications, a
strategic pivot from our historic focus on being a generalist
telecoms provider. Our sales force has been realigned to support
and deliver this strategic pivot.
-- New working practices have been established which are already
yielding results, such as the acceleration of project
implementation due to closer engagement with our customer base,
shortening the timescale from win to bill, which will improve free
cash generation in H2 2023.
-- We are actively revisiting and exiting loss-making contracts
and have won a number of new high value contracts such as
Kingfisher Group, Harrods, Vanquis Banking Group, Angus Council,
Northampton General Hospital NHS Trust and The Leeds Teaching
Hospital. Major new and existing customer contract awards exceed
GBP25m total contract value (TCV), of which over GBP17m will be
recurring revenue.
-- Continued progress in cloud and managed services has
delivered a 13.1% increase in contracted cloud seats to 181,000 at
the half year-end (H1 2022: 160,000).
-- Our sales order pipeline amounts to GBP32.0m. Following the
2022 delay in project roll-out, we have been able to accelerate
service to our customers in H1 2023, shortening the time from
project to recurring revenue into H2 2023 and 2024.
-- The sales team has delivered above target results despite all
the changes in H1 and made significant progress signing deals in
the private sector.
-- However, the implementation of new procurement framework
change with a 3 to 5 year cycle has led to a slow-down in public
sector tenders.
-- Having secured our place on the new framework agreement,
activity is now returning to normal levels.
-- The Company expects to release annualised P&L
improvements of c.GBP11.0m (combining both revenue benefits and
cost savings, as an exit run rate from the end of December 2023),
of which GBP3.0m fall into H1. Part of the benefits will be
re-invested in future growth, such as R&D, to generate
operational scalability.
The Company announces that its nominated adviser and broker
finnCap Ltd, has changed its name to Cavendish Capital Markets
Limited, following a merger.
Commenting on the Group's results, Carol Thompson, Executive
Chairman/Chief Executive Officer said:
"2023 is proving a stimulating and positive year for the
business. The outcome of the first half giving greater clarity on
where Maintel sits in its market and future strategic imperatives.
From that perspective the team feels strong and well equipped to
move forward at pace, delivering consistently high levels of
service to clients and doubling down in high growth areas where we
have historically seen success.
Remote and hybrid working have meant that technology providers
have had to evolve faster than any time in the last 10 years and
Maintel is well placed to support the new hybrid working and cloud
centric environment within which our products sit perfectly. In
order to help our customers support this new way of working and
ensure collaboration, cooperation and productivity are not lost,
Maintel assumes the hybrid working environment as a medium-term
feature and are working hard on our new product innovations to
service customers who find themselves trying to find ways of making
the "new normal" work for them.
The business made a strategic move into unified communications,
secure connectivity and customer experience solutions prior to the
pandemic but due to supply chain issues and slowdown in procurement
cycles, the business's success was constrained. These issues are
resolved and we are now capitalising on our early adoption and
working with our vendors on developing next generation efficiency
and effectiveness models for our customers. Known for being design
experts and vendor agnostic, we are able to create the optimal
environment for our clients, safe in the knowledge we are highly
regarded by global providers such as Avaya, Cisco, Genesys, Mitel,
RingCentral and Unify. We aim to add new vendors to that list where
the technology gives our customers the edge both in terms of
productivity and cost.
We are clear on our strategy, product, IP investment and
customer engagement model. The remainder of the financial year and
beyond is about executing on that strategy, building on the
positive trading momentum continuing into H2 2023 from H1. Adjusted
EBITDA is tracking ahead of management's expectation and Maintel's
strong order book and focused sales strategy underpins management's
confidence in the remainder of the year and now anticipates
achieving adjusted EBITDA for the financial year ahead of initial
management expectations, whilst total net debt is forecasted
slightly higher to support further investment in restructuring and
the normalisation of the working capital.
The search for a new permanent CEO continues, along with a new
senior independent non-executive director.
Whilst the dual role is in place, I continue to be supported by
John Booth as Deputy Chairman. During H1 we welcomed Clare Bates to
the board as Chair of the Remuneration Committee and she brings
significant expertise, experience and balance to the board. We are
delighted to have her as part of the team.
Notes
[1] Adjusted EBITDA is EBITDA of GBP1.6m (H1 2022: GBP3.2m),
adjusted for exceptional items (including one-off restructuring
costs) and share based payments (note 5).
[2] Adjusted earnings per share is basic (loss) per share of
(19.1)p (H1 2022: loss per share of (1.8)p), adjusted for
intangibles amortisation, exceptional items and share based
payments (note 4). The weighted average number of shares in the
period was 14.4m (H1 2022: 14.4m).
[3] Interest bearing debt (excluding issue costs of debt and
IFRS 16 debt) minus cash.
[4] Adjusted (loss) before tax of GBP1.9m (H1 2022: 2.4m) is
basic (loss) before tax, adjusted for intangibles amortisation,
exceptional items and share based payments.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
C Thompson
Executive Chairman
19 September 2023
For further information please contact:
Carol Thompson, Executive Chair
Gab Pirona, Chief Financial Officer
Dan Davies, Chief Technology Officer 0344 871 1122
Cavendish Capital Markets, (Nomad
and Broker)
Jonny Franklin-Adams / Emily Watts
(Corporate Finance)
Sunila de Silva (Corporate Broking) 020 7220 0500
Business review
Results for the six month period to 30 June 2023
Group revenue increased by 1.7% to GBP47.5m (H1 2022:
GBP46.7m).
Recurring revenue grew by 3.3% compared to the same period in
2022, faster than project revenue (-4.0%), increasing from 73.7% to
75.1%, as a percentage of total revenue.
Our managed services and technology division declined marginally
in revenue by 2.1% to GBP24.5m
(2022: GBP25.0m), with the managed service support base stable
year on year at GBP25.6m (annualised base figure), predominantly
due to contract losses and erosion stabilising, following price
increases on renewals, and on-premise customers transitioning to
managed cloud services. Technology division revenues decreased by
3.9% to GBP11.8m, in comparison to a particularly strong equivalent
period in 2022 (2022: GBP12.3m) aided by the project delivery of
orders closed in FY22, as well as licences associated with new
SD-WAN sales, hardware for cloud deployments and licences for
existing system expansions. The GBP11.8m revenue delivered in the
first half of the current financial year represents strong progress
compared to GBP8.6m generated in the second half of 2022.
The number of contracted seats on our ICON and public cloud
platforms increased by 13.1% to 181,000 with revenue from cloud and
software customers now totalling GBP23.1m, 48.80% of Group revenue.
The Group's cloud portfolio continues to be enhanced by both public
and private cloud solutions, and revenue from cloud subscriptions
and associated managed services grew 19.8% to GBP7.0m. The
continued revenue benefit from the additional contracted seats will
be realised in 2023 and beyond as these projects continue to be
delivered.
With regard to cost management, to date the business has
delivered annualised exit run-rate P&L improvements totalling
GBP11.0m, of which GBP3.0m impacted the period reported.
The cash conversion of the business was impacted in the period
by the exceptional costs associated with the cost restructure of
the business, the increased debt servicing charge and to a lesser
extent the normalisation of working capital. These exceptional cash
flows pay back within one year and are complete as at the end of
H1.
Adjusted EBITDA([1]) increased by 2.8 % mainly reflecting the
revenue dynamic in the first half of the year as well as the impact
of the restructuring programme.
The Group incurred a loss before tax of GBP 2.9 m (H1 2022: loss
of GBP0.5m) and loss per share of 19.1p (H1 2022: loss per share of
1.8p). This includes a net exceptional charge of GBP 1.9 m (H1
2022: GBP0.3m) (refer note 7) and intangibles amortisation of GBP
2.8 m (H1 2022: GBP2.6m).
A djusted earnings per share (EPS) decreased by 76.6 % to 2.6 p
(H1 2022: 11.1p) based on a weighted average number of shares in
the period of 14.4 m (H1 2022: 14.3m).
6 months 6 months
to 30 to 30
June 2023 June 2022
Increase/
GBP000 GBP000 (decrease)
Revenue 47,461 46,746 1.7 %
----------- ------------ ------------
(Loss) before tax (2,928) (575)
Add back intangibles amortisation 2,842 2,651
Exceptional items (note
7) 1,946 261
Share based remuneration 124 71
Adjusted profit before tax 1,984 2,408 (17.6) %
----------- ------------ ------------
Interest 974 398
Depreciation 757 808
Adjusted EBITDA([1]) 3,715 3,614 2.8 %
----------- ------------ ------------
Basic (loss) per share (19.1)p (1.8)p (961.1)%
Diluted (19.1)p (1.8)p (961.1)%
----------- ------------ ------------
Adjusted (loss) per share([2]) 2.6p 11.1p (76.6) %
Diluted adjusted (loss)
per share 2.6p 11.1p (76.6) %
----------- ------------ ------------
Review of operations
Maintel is a Managed Services Provider, with a focus on three
core areas, Unified Comms and Collaboration, Customer Experience
and Secure Connectivity. Our vision is to help every organisation
to thrive through the application of technology with a human touch.
We see technology as the enabler, not the outcome. Success for us
is delivering tangible business benefits for our customers, whether
that be through increasing productivity, velocity, or
collaboration, strengthening their relationships with their own
customers, helping them grow, protecting them from cyber threats,
reducing downtime or saving cost.
The ways in which we can help our customers thrive are many and
varied, and our exceptional people apply the human touch to ensure
that our customer's journey with us is a true partnership and that
we deliver on our promises. This approach allows us to apply a
common blueprint across everything we do, allowing us to cover a
diverse range of technology but with a common and consistent
customer experience.
Elements of cloud services revenues are currently accounted for
in both the managed services and technology division (under the
technology revenue line) and the network services division.
The following table shows the performance of the three operating
segments of the Group.
6 months 6 months
to 30 June to 30
2023 June 2022
(Decrease)
Revenue analysis GBP000 GBP000 / increase
Managed services related 12,674 12,730 (0.4) %
Technology(a) 11,801 12,279 (3.9) %
---------------------------- ------------ ----------- ------------
Managed services and
technology division 24,475 25,009 (2.1) %
Network services division 20,892 19,504 7.1 %
Mobile division 2,094 2,233 (6.2) %
Total Group 47,461 46,746 1.5 %
============================ ============ =========== ============
(a)Technology includes revenues from hardware, software,
professional services and other sales.
Managed services and technology division
The managed services and technology division contains two
distinct revenue lines:
-- Managed services : all support and managed service recurring
revenues for hardware and software located on customer premises.
This combines both legacy PBX and Contact Centre systems, which are
in a managed decline across the sector as organisations migrate to
more effective and efficient cloud solutions, with areas of
technology such as Local Area Networking (LAN), WIFI and security,
which are still very much current and developing technology areas
and therefore enduring sources of revenue.
-- Technology : all non-recurring revenues from hardware,
software, professional and consultancy services and other
non-recurring sales.
Services are predominantly provided across the UK, with some
customers also having international footprints. The division also
supplies and installs project-based technology, professional and
consultancy services to our direct clients and through our partner
relationships.
6 months 6 months
to 30 June to 30 June
2023 2022
Increase
GBP000 GBP000 / (decrease)
Divisional revenue 24,475 25,009 (2.1)%
Divisional gross profit 6,525 6,610 (1.3) %
Gross margin (%) 26.6% 26.4%
========================== ============ ============ ==============
Revenue in this division decreased by 2.1 % to GBP 24.5 m.
Whilst the revenue from the legacy on premise managed service
business remained relatively flat, with the expected churn in this
space counteracted by new additions to the legacy estate (most
notably an outsourcing contract from Atos), the Technology revenues
declined by 3.9% as a result of the continued drive from upfront
perpetual software license purchases, to subscription based
licensing models and the mix of projects delivered in the
period.
Network services division
The Network Services division is made up of three strategic
revenue lines:
-- Cloud - subscription and managed service revenues from cloud contracts
-- Data - subscription, circuit, co-location and managed service
revenues from Wide Area Network (WAN), SD-WAN, Internet access and
managed security service contracts
-- Call traffic and line rental - recurring revenues from both
legacy voice and modern SIP Trunking contracts
6 months
to 30 6 months
June to 30
2023 June 2022
Increase
GBP000 GBP000 / (decrease)
Call traffic 1,498 1,443 3.8%
Line rental 3,481 3,715 (6.3)%
Data connectivity services 8,742 8,116 7.7 %
Cloud 6,959 6,006 15.9 %
Other 212 224 (5.4) %
----------------------------- --------- ----------- --------------
Total division 20,892 19,504 7.1%
Division gross profit 8,437 7,918 6.6 %
Gross margin (%) 40.4% 40.9%
============================= ========= =========== ==============
Network services revenue grew by 7.1 % in the period, whilst the
gross margin of the division contracted slightly to 40.4 % (H1
2022: 40.9%). This reflects the positive contribution of the
continued significant growth in cloud subscription revenues, up
15.9 %, and a return to steady growth for data connectivity (up 7.7
% vs a contraction of (1.7%) from H1 2021 to H1 2022), driven by
our success in winning and rolling out large Software Defined Wide
Area Network (SD_WAN) contracts since 2021 and the normalisation of
the hardware supply chain we've seen in the first half of this
year.
Calls and lines line rental revenue declined by 6.3%, driven by
a continued migration away from the legacy PSTN services due to be
turned off by BT at the end of 2025. This was partially
counteracted by an increase in call traffic revenues (up 3.8%)
driven by an increase in the volume of Inbound Calling services,
predominantly from large Contact Centre deployments.
Maintel cloud services
Maintel has continued to grow its cloud services for both
unified communications and contact centre applications - with
181,000 contracted cloud seats (up 13.1 % on H1 2022) and revenues
from cloud & software customers now at GBP 23.1 m, representing
48.6 % of revenue (H1 2022: 42.4% of revenue). During the first
half of 2023, we continued to make good progress in delivering our
contracted cloud projects and have closed additional new key
contracts for the future in both the Private and Public cloud
spaces.
Mobile division
Maintel's mobile division generates revenue primarily from
commissions received as part of its dealer agreements with O2 which
scales in line with growth in partner revenues, in addition to
value added services sold alongside mobile such as mobile fleet
management and mobile device management.
6 months 6 months
to 30 to 30
June 2023 June
2022
GBP000 GBP000 Decrease
Revenue 2,094 2,234 (6.2)%
Gross profit 1,002 823 21.7%
Gross margin (%) 47.8% 36.8%
=================== =========== ========= =========
Number of customers 523 619 (15.5)%
Number of connections 28,671 27,341 4.8%
======================== ======= ======= ========
Revenue decreased by 6.2 % to GBP 2.1 m (H1 2022: GBP2.2m) with
gross profits at GBP 1.0 m (H1 2022: GBP0.8m), and higher margins
of 47.8 % compared to 36.8% in the prior period. The main
contributing factor was the positive impact of bonuses earnt in the
year from our main partners.
O2 continues to be our core partner and route to market,
bolstered by our Vodafone agreement and our newly established
relationship with Three, which enhances our commercial offering as
well as increasing our ability to serve our customers more
effectively and efficiently. Lastly, our own ICON Mobilise
wholesale offering is ideal for customers who require an agile
solution that caters for unique billing, network, and commercial
requirements.
Maintel's mobile go-to-market proposition will continue to focus
on the mid-market and low-end enterprise segments where our
portfolio is best suited. We continued to invest in this area
during the period, with the launch of mobile usage threshold
alarming within our ICON Portal digital customer engagement
platform.
Administrative expenses
Administrative expenses mainly comprise costs related to the
sales and marketing teams, the support functions and the managerial
positions, as well as the associated growth generating investments
and general costs. On a comparable basis, the total other
administrative expenses, excluding depreciation, amounted to GBP
12.6m for the period, slightly increased from GBP12.1m in H1 2022.
The net GBP0.5m increase mainly reflects salary increases in line
with inflation.
The overall headcount dropped by 6.3% or 31 FTEs and now stands
at 465 (H1 2022: 496) as a result of the Group's programme of
re-adapting to a scalable efficient business to facilitate our
transition to a communications specialist .
Cash flow
The Group net debt (excluding IFRS 16 liabilities and issue
costs of debt) of GBP 21.4 m at 30 June 2023, compared to GBP 16.6
m net debt at 31 December 2022.
6 months 6 months
to 30 June to 30 June
2023 2022
GBP000 GBP000
Cash (used in)/generated by operating activities (1,898) 3,954
Taxation (paid) - (370)
Capital expenditure (1,195) (2,087)
Finance cost (net) (849) (471)
Issue costs of debt - (234)
------------- ------------
Free cashflow (3,942) 792
Payments in respect of prior period business
combination - (311)
Proceeds from borrowings 2,500 22,500
Repayment of borrowings (1,200) (15,500)
Lease liability repayments (644) (517)
(Decrease)/ Increase in cash and cash equivalents (3,286) 6,964
Cash and cash equivalents at start of period 6,136 (3,869)
Exchange differences (24) (5)
Cash and cash equivalents at end of period 2,826 3,090
Bank borrowings (24,200) (22,500)
------------- ------------
Net debt excluding issue costs of debt (21,374) (19,410)
Adjusted EBITDA (note 5) 3,715 3,614
============= ============
The Group generated -GBP1.9m of cash from operating activities
compared to H1 2022 comparator of GBP3.9m.
Capital expenditure outlay of GBP1.2m in the period (H1 2023:
GBP2.0m) was driven by our continued investment across Maintel's
product and service portfolio.
No tax paid was paid in the first half of the financial year. In
prior years payments have been made in relation to the Groups
historical losses being fully utilised and taxable profits arising
in the year ended 31 December 2022.
Dividends
In line with previous periods, the Board has made the decision
to continue to pause dividend payments. As such, the Board will not
declare an interim dividend for 2023 (H1 2022: Nil).
Outlook
The solid performance of our sales team year-to-date supports
our expectations of a strong performance for the second half of
2023. The sales order book currently extends revenue potential
beyond our original expectations. Private sector business secured
in the early months of 2023 is now being delivered and supports
strong project revenue streams. Whilst public sector contract
awards in the first half of the year were awaiting the
implementation of the new public framework, we expect an increase
in tendering activity during H2 and into 2023 as investment
continues in digital transformation across local government,
health, housing and education sectors.
Leveraging the positive outcome of the first phase of the
business transformation, the performance in the second half of the
year will benefit from the full impact of the P&L improvement
initiatives. Those benefits will be compounded with the
implementation of the second phase of the transformation programme
focussing on our property strategy, the delivery model and growth
acceleration.
The Board therefore expects H2 2023 trading to show further
momentum building on the period reported. Consequently, the Board
is confident that Maintel will achieve full year adjusted EBITDA
ahead of initial expectations for the financial year ending 31
December 2023. Total net debt is forecasted slightly higher to
support further investment in restructuring and the normalisation
of the working capital.
Although the Board does not feel it is timely to resume dividend
payments, this will be kept under review as conditions further
improve.
On behalf of the board
C Thompson
Executive Chairman
19 September 2023
Maintel Holdings Plc
Consolidated statement of comprehensive income (unaudited)
for the 6 months ended 30 June 2023
6 months 6 months
to 30 June to 30 June
2023 2022
Note GBP000 GBP000
(Unaudited) (Unaudited)
Revenue 2 47,461 46,746
Cost of sales (31,497) (31,395)
------------ ------------
Gross profit 15,964 15,351
Other operating income 3 339 455
Administrative expenses
---------------------------------------- ----- ------------ ------------
Intangibles amortisation (2,842) (2,651)
Exceptional items 7 (1,946) (261)
Share based payments (124) (71)
Other administrative expenses (13,345) (13,000)
---------------------------------------- ----- ------------ ------------
(18,257) (15,982)
Operating (loss) (1,954) (177)
Net financial costs (974) (398)
(Loss) before taxation (2,928) (575)
Taxation credit 180 323
------------ ------------
(Loss) for the period and attributable
to owners of the parent (2,748) (252)
Other comprehensive income
for the period
Exchange differences on translation
of foreign operations (20) 9
------------ ------------
Total comprehensive (loss)
for the period attributable
to the owners of the parent (2,768) (243)
============ ============
(Loss) per share from continuing
operations attributable to
the ordinary equity holders
of the parent
Basic 4 (19.1)p (1.8)p
Diluted 4 (19.1)p (1.8)p
============ ============
Maintel Holdings Plc
Consolidated statement of financial position (unaudited)
at 30 June 2023
30 June 31 December
2023 2022
Note GBP000 GBP000
(Unaudited) (Audited)
Non-current assets
Intangible assets 51,267 52,989
Right-of-use assets 2,052 2,711
Property, plant and equipment 1,142 1,427
Trade and other receivables - 360
54,461 59,287
------------ ------------
Current assets
Inventories 3,123 1,592
Trade and other receivables 31,555 29,089
Income tax 68 92
Cash and cash equivalents 2,826 3,090
37,572 33,863
------------ ------------
Total assets 92,033 93,150
Current liabilities
Trade and other payables 48,066 43,087
Lease liabilities 843 840
Borrowings 8 2,257 2,400
Total current liabilities 51,166 46,327
Non-current liabilities
Other payables 326 482
Lease liabilities 1,219 1,853
Deferred tax liability 778 1,224
Borrowings 8 21,800 19,887
Total non-current liabilities 24,123 23,449
Total liabilities 75,289 69,773
------------ ------------
Total net assets 16,744 23,377
============ ============
Equity
Issued share capital 144 144
Share premium 24,588 24,588
Other reserves 60 70
Retained earnings (8,048) (1,425)
Total equity 16,744 23,377
============ ============
Maintel Holdings Plc
Consolidated statement of changes in equity (unaudited)
for the 6 months ended 30 June 2023
Share Other Retained
capital Share reserves earnings Total
premium
Note GBP000 GBP000 GBP000 GBP000 GBP000
At 31 December 2021 144 24,588 61 (1,244) 23,549
Loss for the period - - - (252) (252)
Other comprehensive
income:
Foreign currency
translation differences - - 9 - 9
--------------------------------- ---------- ---------- ----------- ----------- --------
Total comprehensive
(loss) for the period - - 9 (252) (243)
Share based payments - - - 71 71
At 30 June 2022 144 24,588 70 (1,425) 23,377
(Loss) for the period - - - (4,109) (4,109)
Other comprehensive -
income: - - - -
Foreign currency
Translation differences - - 10 - 10
--------------------------------- ---------- ---------- ----------- ----------- --------
Total comprehensive
loss for the period - - 10 10
Share based payments - - - 110 110
---------------------------------
At 31 December 2022 144 24,588 80 (5,424) 19,388
--------------------------------- ---------- ---------- ----------- ----------- --------
Loss for the period - - - (2,748) (2,748)
Other comprehensive - - - - -
income:
Foreign currency
translation differences - - (20) - (20)
--------------------------------- ---------- ---------- ----------- ----------- --------
Total comprehensive
income for the period - - (20) - (2,768)
Share based payments - - - 124 124
--------------------------------- ---------- ---------- -----------
At 30 June 2023 144 24,588 60 (8,048) 16,744
================================= ========== ========== =========== =========== ========
Maintel Holdings Plc
Consolidated statement of cash flows (unaudited)
for the 6 months ended 30 June 2023
6 months 6 months
to 30 June to 30 June
2023 2022
GBP000 GBP000
Operating activities
(Loss)before taxation (2,928) (575)
Adjustments for:
Intangibles amortisation 2,842 2,651
Share based payment charge 124 71
Depreciation of plant and equipment 314 330
Depreciation of right of use asset 443 478
Interest expense (net) 974 398
Operating cash flows before changes in working
capital 1,769 3,353
Increase in inventories (529) (583)
(Increase) / decrease in trade and other receivables (4,045) 1,410
Increase / (decrease) in trade and other payables 907 (226)
------------ ------------
Cash generated from operating activities (1,898) 3,954
Tax paid - (370)
------------ ------------
Net cash flows (used in) / generated from operating
activities (1,898) 3,584
------------ ------------
Investing activities
Purchase of plant and equipment (75) (667)
Purchase of software (1,120) (1,420)
Purchase price in respect of prior period business
combinations - (311)
Net cash flows used in investing activities (1,195) (2,398)
------------ ------------
Maintel Holdings Plc
Consolidated statement of cash flows (continued) (unaudited)
for the 6 months ended 30 June 2023
6 months 6 months
to 30 to 30
June 2023 June 2022
GBP000 GBP000
Financing activities
Proceeds from borrowings 2,500 22,500
Repayment of borrowings (1,200) (15,500)
Lease liability repayments (644) (517)
Interest paid (849) (471)
Issue costs of debt - (234)
Net cash flows generated from financing
activities (193) 5,778
----------- -----------
Net (decrease) / increase in cash
and cash equivalents (3,286) 6,964
Cash and cash equivalents at start
of period 6,136 (3,869)
Exchange differences (24) (5)
Cash and cash equivalents at end of
period 2,826 3,090
=========== ===========
Maintel Holdings Plc
Notes to the interim financial information
1. Basis of preparation
The financial information in these unaudited interim results is
that of the holding company and all its subsidiaries (the Group).
The financial information for the half-years ended 30 June 2023 and
30 June 2022 does not comprise statutory financial information
within the meaning of s434 of the Companies Act 2006 and is
unaudited. It has been prepared in accordance with the recognition
and measurement requirements of UK adopted International Accounting
Standards (IAS) but does not include all the disclosures that would
be required under IAS. The accounting policies adopted in the
interim financial statements are consistent with those adopted in
the last annual report for financial year 2022 and those applicable
for the year ended 31 December 2023.
2. Segmental information
For management reporting purposes and operationally, the Group
consists of three business segments: (i) telecommunications managed
service and technology sales, (ii) telecommunications network
services, and (iii) mobile services. Each segment applies its
respective resources across inter-related revenue streams which are
reviewed by management collectively under these headings. The
businesses of each segment and a further analysis of revenue are
described under their respective headings in the business
review.
The chief operating decision maker has been identified as the
board, which assesses the performance of the operating segments
based on revenue and gross profit.
Six months to 30 June 2023 (unaudited)
Managed
service Network
and technology services Mobile Total
GBP000 GBP000 GBP000 GBP000
Revenue 24,475 20,892 2,094 47,461
================ =========== ========= =========
Gross profit 6,525 8,437 1,002 15,964
---------------- ----------- ---------
Other operating income 339
Other administrative
expenses (13,345)
Share based payments (124)
Intangibles amortisation (2,842)
Exceptional items (1,946)
---------
Operating (loss) (1,954)
Interest (net) (974)
---------
(Loss) before taxation (2,928)
Income tax credit 180
(Loss) after taxation (2,748)
=========
Further analysis of revenue streams is shown in the business
review.
The board does not regularly review the aggregate assets and
liabilities of its segments and accordingly, an analysis of these
is not provided.
Managed Central/
service Network inter-
and technology services Mobile company Total
GBP000 GBP000 GBP000 GBP000 GBP000
Intangibles amortisation - - - 2,842 2,842
Exceptional items - - - 1,946 1,946
================= =========== ========== ========= =======
Six months to 30 June 2022 (unaudited)
Managed
service Network
and technology services Mobile Total
GBP000 GBP000 GBP000 GBP000
Revenue 25,009 19,504 2,233 46,746
================ =========== ========= =========
Gross profit 6,610 7,918 823 15,351
---------------- ----------- ---------
Other operating income 455
Other administrative
expenses (13,000)
Share based payments (71)
Intangibles amortisation (2,651)
Exceptional items (261)
---------
Operating (loss) (177)
Interest (net) (398)
---------
(Loss) before taxation (575)
Income tax credit 323
(Loss) after taxation (252)
=========
Further analysis of revenue streams is shown in the business
review.
The board does not regularly review the aggregate assets and
liabilities of its segments and accordingly, an analysis of these
is not provided.
Managed Central/
service Network inter-
and technology services Mobile company Total
GBP000 GBP000 GBP000 GBP000 GBP000
Intangibles amortisation - - - 2,651 2,651
Exceptional items 107 - - 154 261
================ ========== ========= ========= =======
3. Other operating income
6 months 6 months to
to 30 June 30 June 2022
2023
GBP000 GBP000
(unaudited) (unaudited)
Other operating income 339 455
============ ==============
Other operating income of GBP0.3m in the period relates to
monies associated with the recovery of research and development
expenditure credits (H1 2022: GBP0.5m).
4. Earnings per share
Earnings per share and adjusted earnings per share is calculated
by dividing the (loss) / profit after tax for the period by the
weighted average number of shares in issue for the period. These
figures being prepared as follows:
6 months 6 months
to 30 June to 30 June
2023 2022
GBP000 GBP000
(unaudited) (unaudited)
Earnings used in basic and diluted EPS,
being (loss) after tax (2,748) (252)
Adjustments: Amortisation of intangibles
on business combinations 1,893 2,099
Exceptional items (note 7) 1,946 261
Tax relating to above adjustments (842) (607)
Share based payments 124 71
Interest charge on deferred consideration - 18
Adjusted earnings used in adjusted EPS 373 1,590
============ ============
The adjustments above have been made to provide a clearer
picture of the trading performance of the Group.
6 months 6 months
to 30 June to 30 June
2023 2022
Number GBP000 Number GBP000
Weighted average number of ordinary shares
of 1p each 14,362 14,362
Potentially dilutive shares - 19
-------------- --------------
14,362 14,362
============== ==============
(Loss) per share
Basic (19.1)p (1.8)p
Diluted (19.1)p (1.8p)
Adjusted - basic after the adjustments
in the table above 2.6p 11.1p
Adjusted - diluted after the adjustments
in the table above 2.6p 11.1p
======== =======
In calculating adjusted diluted earnings per share, the weighted
average number of ordinary shares in issue is adjusted to assume
conversion of all potentially dilutive ordinary shares. The Group
has one category of potentially dilutive ordinary share, being
those share options granted to employees where the exercise price
is less than the average price of the Company's ordinary shares
during the period.
5. Earnings before interest, tax, depreciation and amortisation (EBITDA)
The following table shows the calculation of EBITDA and adjusted
EBITDA:
6 months 6 months
to 30 June to 30 June
2023 2022
GBP000 GBP000
(unaudited) (unaudited)
(Loss) before tax (2,928) (575)
Net interest payable 974 398
Depreciation of property, plant and
equipment 314 330
Depreciation of right of use asset 443 478
Amortisation of intangibles 2,842 2,651
------------ ------------
EBITDA 1,645 3,282
Share based payments 124 71
Exceptional items (note 7) 1,946 261
Adjusted EBITDA 3,715 3,614
============ ============
6. Dividends
The directors have decided not to declare an interim dividend
for 2023 (2022: nil).
7. Exceptional items
6 months 6 months
to 30 June to 30 June
2023 2022
GBP000 GBP000
(unaudited) (unaudited)
Staff restructuring and other employee
related costs 965 153
Costs relating to business transformation 606 -
Fees relating to revised credit facilities
agreement 375 154
Gain on disposal of the managed print
services business - (16)
(Income) relating to onerous lease provision - (30)
1,946 261
============ ============
8. Borrowings
30 June 31 December
2023 2022
GBP000 GBP000
(unaudited) (audited)
Current bank loan - secured 2,257 5,226
Current RCF - secured 17,500
------------ ------------
2,257 22,726
Non- Current bank loan - secured 1,800 -
Non - Current RCF - secured 20,000 -
------------ ------------
21,800 -
24,057 22,726
============ ============
In the previous year, the Company signed a new agreement with
HSBC Bank plc ("HSBC") to replace the previous facility. The new
facility with HSBC consists of a revolving credit facility ("RCF")
of GBP20m with a GBP6m term loan on a reducing basis. The maturity
date of the agreement is 3 years from the signing date. The term
loan is being repaid in equal monthly instalments, starting in
October 2022. The principal balance of the term loan at 30 June
2023 was GBP4.2m and of the RCF was GBP20.0m.
Interest on the borrowings is the aggregate of the applicable
margin and SONIA for Pound Sterling / SOFR for US Dollar / EURIBOR
for Euros.
Covenants based on EBITDA to Net Finance Charges and Total Net
Debt to EBITDA are tested on a quarterly basis.
The current bank borrowings above are stated net of unamortised
issue costs of debt of GBP0.2m (31 December 2022: GBP0.1m).
The facilities are secured by a fixed and floating charge over
the assets of the Company and its subsidiaries. Interest is payable
on amounts drawn on the revolving credit facility and loan facility
at a covenant-depending tiered rate of 2.60 % to 3.25% per annum
over SONIA, with a reduced rate payable on the undrawn
facility.
The Directors consider that there is no material difference
between the book value and fair value of the loan.
9. Post balance sheet events
There have been no events subsequent to the reporting date which
would have a material impact on the interim financial result.
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END
IR KVLFFXKLBBBE
(END) Dow Jones Newswires
September 19, 2023 02:00 ET (06:00 GMT)
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