Revenue is expected to come in below expectations at Microlise Group, the Nottingham-headquartered provider of transport management software to fleet operators, according to a new trading update for the year ending 31 December 2025 (FY25).
In Interim Results for the period ended 30 June 2025, Microlise noted market challenges, including a slower recovery in the automotive sector. Trading in the period since has been mixed, the business says. As a result, based on trading results for the year to date and Microlise’s pipeline for the remainder of FY25, it now expects to deliver FY25 revenues below market expectations, down from £91.3m to no less than £84m (up 4% versus FY24).
The reduction in expected revenue for FY25 is in part a result of lower order volumes from global OEM customers in the automotive and construction sectors, predominantly due to trading disruption caused by the impact of tariffs and general weakness in the wider macro environment.
Direct customer sales in the UK have also been softer, impacted by delays in some customer projects, in particular a large project relating to a British multinational retailer which was hit by a cyber-attack earlier this year.
Direct customer sales in Asia-Pacific (APAC), however, have performed strongly with the full deployment of a £10.6m, five-year, contract with WooliesX in Australia. Meanwhile, FY25 annual recurring revenue run rate is anticipated to be up 4.5% to £59.1m.
Microlise is set to implement cost saving and efficiency measures across parts of the Group, which are expected to generate annualised cost savings of at least £4m. This action is expected to be materially complete before the year end with an exceptional charge of £1.5m, largely relating to severance costs, with an expected reduction in headcount of approximately 10%.
As a result of the underperformance in sales, Microlise expects adjusted FY25 EBITDA to be below current market expectations (£12.7m), and not less than £8.3m.
Nadeem Raza, CEO of Microlise, said: “Notwithstanding this short-term impact, our view on the Company is unchanged and the business fundamentals remain strong. Microlise is robustly profitable, cash generative and has a strong balance sheet.
“For FY26 we have a healthy direct sales pipeline and we anticipate overall revenues to increase over FY25. We expect improving recurring revenue growth, supported by the eventual unwind of disruption with OEM customers, and materially increased EBITDA and cash generation following the conclusion of the margin initiatives, but FY26 adjusted EBITDA is expected to be below current market expectations.
“We have a strong base of annual recurring revenues, and the actions we are announcing today are expected to enhance our profitability. Together with a refreshed go-to-market strategy, healthy order book and expanding product suite, we are well positioned to deliver sustainable, profitable growth.”
