Microlise Group plc, a provider of transport management software to fleet operators, it to make redundancies after its global sales were hit.
The firm, based in Nottingham and listed on the junior AIM market, said EBITDA for 2025 will not be less than £8.3 million – well below previously reported market expectations of £12.7m.
Based on trading results for the year to date and its pipeline for the remainder of FY25, it now expects to deliver revenues of not less than £84m, compared with market expectations of £91.3m.
However this is up 4% compared to FY24 adjusted revenues of £81m.
The board has decided to implement cost saving and efficiency measures, which are expected to generate annualised cost savings of at least £4m. There will be an expected reduction in headcount of approximately 10%, while the change is likely to cost around £1.5m – largely relating to severance costs.
The firm also said it has hired Dean Garvey-North as its new CTO, succeeding Duncan McCreadie, who will retire after a decade of service.
Microlise blamed lower order volumes from its global OEM customers in the automotive and construction sectors, predominantly due to trading disruption caused by the impact of tariffs together with general weakness in the wider macro environment.
It now expects revenue from global OEM customers to represent approximately 27% of FY25 total revenue, down from 33% in FY24 – with a further reduction to come in FY26.
It said that direct customer sales in the UK have also been softer, partly due to a delay in “one large project relating to a British multinational retailer which was hit by a cyber-attack earlier this year”.
“We anticipate this will result in revenue relating to the deployment of Microlise’s software and hardware products for these customer projects being recognised in FY26,” it added.
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.”