Microlise Group (LSE:SAAS) delivered a resilient first-half performance for fiscal 2026, with growth in high-quality recurring revenue helping to offset weaker demand from original equipment manufacturers (OEMs) and lower hardware sales. Although total revenue declined during the period, the company significantly improved profitability and strengthened its cash position, leaving management confident of achieving its full-year earnings expectations.
Recurring Revenue Continues to Grow
Direct customer annual recurring revenue increased 12% year on year to £47.1 million, with recurring income now representing 76% of total group revenue. Overall revenue fell 10% to £39.5 million, reflecting softer OEM activity and continued pressure on hardware volumes.
Despite the decline in sales, adjusted EBITDA margin improved to 13.2% following restructuring measures and tighter cost controls. Net cash also increased to £13.8 million, demonstrating the company’s strong cash generation and disciplined financial management despite ongoing supply chain challenges.
Strategic Investment Targets Future Growth
Microlise continues to invest in initiatives designed to support long-term expansion, including the rollout of its Microlise One platform, the development of new artificial intelligence capabilities and the expansion of its sales organisation.
Management believes these investments, combined with robust demand from direct customers, a healthy sales pipeline and projects delayed by hardware shortages, will help accelerate revenue growth and improve profitability from FY2027 onwards.
Strong Balance Sheet Supports Long-Term Outlook
The company’s outlook continues to benefit from a healthy balance sheet and positive free cash flow generation. However, recent operating performance remains affected by a sharp reduction in reported revenue and continued losses, while ongoing component shortages and subdued OEM demand continue to create near-term challenges.
Technical indicators remain weak, with the share price trading well below its major moving averages and momentum remaining negative. Although the dividend yield offers some support to investors, the company’s loss-making position continues to weigh on its overall valuation.
About Microlise Group plc
Microlise Group plc is a UK-based provider of fleet management and transport technology solutions for logistics operators. Its software and hardware products help customers improve operational efficiency, enhance driver safety, reduce emissions and optimise fleet performance.
Founded in 1982, the company serves more than 2,500 customers worldwide and operates from its headquarters in Nottingham, with additional offices in France, Australia and India. Microlise is also recognised with the London Stock Exchange’s Green Economy Mark for its contribution to sustainable transport technologies.
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