Made Tech Group (MTEC) H2 2024 earnings summary

Executive summary

• FY24 revenue fell 4% to £38.6m amid constrained public-sector budgets; improved margins and cost actions lifted adjusted EBITDA 56% to £2.4m.

• Strong client retention, a £65.6m contracted backlog and more than £27m in early FY25 bookings supported growth prospects, though near-term revenue guidance remained cautious.

Financial highlights

• FY24 revenue was £38.6m, down 4% YoY; sales bookings fell to £36m from £69.9m, and contracted backlog declined 3% to £65.6m.

• Gross profit was £14.0m, down 3%; gross margin rose 50bps to 36.3%.

• Adjusted EBITDA increased 56% to £2.4m; adjusted EBITDA margin rose to 6.2% from 3.8%.

• Statutory operating loss widened to £3.2m from £1.5m, primarily due to intangible asset impairments; cash generated by operations was £0.4m versus an outflow of £0.7m.

• Net cash was £7.6m at 31 May 2024, versus £8.5m a year earlier; cash reached £8.6m by end-August, with no debt.

Outlook and guidance

• FY25 guidance indicated a small revenue decline with higher profitability and improving margins; management awaited the autumn budget and further bid activity.

• More than £27m of bookings in the first four months of FY25 included Met Office (£7.6m) and DfE (£13.2m) contracts; robust booking performance was expected to continue.

• FY25 priorities include productivity, commercial investment and lower capitalised development spend; positive free cash flow was expected.

• Awards may remain lumpy due to deal size and government timing, although management expected positive booking momentum over a 12-month period.