FY23 Trading Update

Made Tech has announced that it now expects FY23 revenue and EBITDA to be lower than previously expected, at c.£40m (vs. £43mE) on sales and "at least £1.5m" (vs. £3.9mE) on EBITDA. As despite a strong Q3 (and March), several of the Group's clients have since delayed the start date of projects into FY24 in response to tightening budgets, thus impacting revenue and profitability in these closing months. So for factors outside of MTEC's control, this year’s trading will be materially impacted and

Sentiment is changing

Interims show continued progress, as Made Tech has built on its FY22 break-out performance (sales: +120%) by growing sales a further 75% in 1H23. An exceptional feat, achieved through a strong b/f backlog (+133% y/y) and excellent sales execution in 1H23. This second point is pertinent, as it highlights how (notwithstanding macro headwinds) Made Tech has been able to land nine new customers in H1 (and more in Q3) such achieving >£60m bookings YTD. This achievement materially de-risks FY23&24 exp

Strong H1 update and contract wins

Made Tech has announced a very strong update: H1 sales +76% y/y and alongside this, also several wins/expansions worth £27m. As a result, Made Tech has now delivered 48%/FY23e sales and as well, has a very strong backlog: £48m (+53% y/y) so is very well positioned to drive continued growth, both this year and next. Margins meanwhile leave room for improvement, as having generated £0.5m EBITDA in H1, this leaves work to do, but with contractors now materially lower (at c.10% vs. c.20% in the PY)

A breakout year

Results are consistent with August’s update and confirm a breakout FY22, as Made Tech materially scaled its business – growing revenue 120% y/y (organic) to £29.3m, an exceptional result, which in turn drove a return to profitability, AOP: £2.3m (PY:£-0.8m). This was achieved by Made Tech more than doubling its headcount and alongside this, also delivered sales bookings of £51.1m (+115% y/y) which includes Made Tech’s largest ever win. Made Tech’s y/e backlog is also up sharply at £38.2m (+133%

FY22: A year of outstanding progress

Made Tech has produced outstanding FY22 headline results, with all key top-line metrics more than doubling (head of our expectations). Market uncertainty surrounding the ability to recruit and retain in a tight labour market has been dispelled with y/e employees of 478 up from last year’s 235. Importantly this has been achieved without undue impact on profitability, with GM flat yoy at 38% and EBITDA margin rising to 9% from the prior year’s loss. We continue to believe we are seeing the emergen

£7m Met Office contract win

Made Tech has today announced a contract win with the Met Office (a new customer) where the Group has been appointed its Digital Services Partner. This represents another highly impressive win in our view, as it provides further evidence for how key Public Sector organisations are entrusting Made Tech to help support and drive their digital objectives. Won via the Met’s own framework, this contract is worth circa £7m over a two year period and therefore represents the second largest award in the

Exceptional bookings, resourcing holding back

H1 results are exceptional, as MTEC has achieved sector leading organic sales growth of 131% y/y to £11.7m, in line with a previous update, while booking are stronger still at £26.5m +148% y/y, driven by a combination of new wins and material expansions. Furthermore this strong progress has continued into H2 following a record c.£19m win with NHS Digital (also announced today). Consequently MTEC’s current backlog is likely even stronger than reported (£31.3m ~+170% y/y) thus providing strong vis

Initiation: Making a difference

The Government’s Digital Transformation (DX) programme has created powerful market tailwinds for a new breed of IT services partner. Made Tech is one of a select few cutting edge Public Sector DX experts finding strong endorsement amongst prestigious UK Public Sector bodies with this reaching an inflection point in FY21 when sales grew 144% to £13.3m. This trend has continued into FY22 and hence we model similar rapid growth looking ahead and in turn significant operating leverage. Senior civil

CMD - Broadening & deepening client relationships

A dose of morosity

No change in the narrative. Aviva’s ship sails on as usual. The PRT business is still going well, inflation remains an impediment to a strong P&C improvement, retail customers seem more interested in the rising cost of living than savings’ products and Aviva investors see no real signs of an improvement. This is the same story as in recent quarters and, in that context, our thesis remains the same.

'Airlines will be shocked when Covid leases run out and rates go up’

Morning Note – 24 May 2023

The Opportunity in Short-Termism

Fears vs Fundamentals (again) For 2 years, European banks have enjoyed potent earnings upgrades. For 2 years, valuations have been trapped between ''unease'' and ''outright panic'' multiples. This note looks at the latest fears and fundamentals behind this ongoing struggle. We extract lasting lessons from Q1, a record profit quarter, and extend our work on the fears of the moment: ''peak NIM'', CRE and credit contraction. Peak NIM - no, not yet We refresh our top-down margin work for the late

NAHL Group plc: AGM update: Continued progress in scaling the business for future growth

NAHL’s AGM statement released today, is encouraging as management continues to scale the businesses for further growth. As a result, the Board’s expectations for the full year remain unchanged and we make no alterations to our forecasts. As a reminder, these still call for a c.13% increase in adjusted PBT in 2023, c.170% in FY24 and a further c.70% in FY25. Our current fair value remains at 65p but this is likely to rise as the Group delivers on its significant potential.

WH Ireland: Avation - Market tailwinds highlighted in Bloomberg Intelligence event

Avation is a lessor of 35 commercial aircraft to a diversified client base of 17 airlines. Yesterday's Bloomberg Intelligence webinar event entitled ‘Aircraft Lessor Recovery and Innovation' reaffirmed a number of positive market trends for aircraft lessors at the present time. Key points included: i) structural deficits in the supply of turboprop aircraft in the coming years, with aircraft retirements expected to outpace limited production of new aircraft; ii) the strong recovery in air travel

This Week's AIM Highlights 19th May

Early Mover in UK Lab-grown Meat

BSF Enterprise Plc (BSF) is a biotechnology company focused on acquiring, combining, and building businesses in the lab-grown tissue space. It aims to achieve this through an acquisition-led growth strategy and has already acquired the tissue engineering and cellular agriculture company, 3D Bio Tissues.

Morning Note – 30 May 2023

An Asian exploration

We spent last week with HSBC and STAN in Hong Kong and Singapore, delving into the detail of structural drivers for Asia. Both banks have a good story to tell, with business models that are well positioned and being enhanced further. In isolation we did not learn enough to warrant a change in recommendation but tailwinds from the region are not to be overlooked. A deep dive into a core part of the investment case Asia sits at the core of the investment case for both HSBC and STAN given its share

c.60% discount to NAV... Can deep value prevail?

Petershill (PHP) reported a Q1-23 double digit % headline miss on FRE/DE mostly driven by cyclical factors. However, fundraising was resilient including more closings after quarter end and PHP reiterated FY2023 guidance ($220-250m FRE). We remain outperform, 250p target price. Weakness on headline earnings amid a muted industry backdrop Private markets are being tested in 2023 with private equity deal activity down c.50-80% y/y. In this context, the headline Q1 miss was mostly driven by cyclica

Trading update indicates strong FY23 performance

Very strong CY22 - CY23 upgraded 10%

XPS CMD articulates growth potential