Made Tech has released an update covering 1HNov23, which shows good EBITDA progress: this increasing from £0.5m to £1.4m (~7% margin), driven by better utilisation and lower contractor numbers both benefitting GM%. In addition, MTEC also achieved targeted opex costs savings. This progress was notwithstanding a lower top-line, where sales fell from £20.6m to £19.1m, due to (well flagged) more cautionary customer spending. This theme is also reflected by H1 bookings - down sharply - from £32.6m to £12.6m (notwithstanding three larger deals). Further - and given 2024 is an election year - MTEC note near-term demand could remain subdued and echoing this caution, no explicit full-year guidance is given. This said, we think H1 shows sufficient progress to maintain current forecasts, as these continue to look feasible, particularly from an EBITDA perspective. Period-end net cash now £7.9m, so still comfortable and points to just £0.6m H1 burn i.e. MTEC still has plenty of cash runway, such to withstand a potentially subdued cal-24, before bookings potentially recover thereafter. MTEC trades on 0.5x sales, reflecting (potentially); current revenue uncertainty and also; lack of profitability/FCF to date. However, it would at least appear that MTEC is making good progress on the latter, such that any perceived funding risk appears overblow. We view the next catalyst as improved bookings, such to drive positive (and profitable) revenue growth.
