Pinewood Technologies Group (PINE) H1 2024 earnings summary

Executive summary

• Achieved double-digit growth in both revenue (up 11%) and gross profit (up 12.4%) year-over-year for H1 FY 2024, driven by SaaS transition, user growth, and successful Lithia UK rollout.

• 85% of revenues are recurring, with a strong international presence in 21 countries and deep partnerships with 50 OEM brands.

• Strategic partnership and joint venture with Lithia Motors for North American market entry; US rollout in planning stages.

• £4.2m investment in Seez, an automotive AI company, securing exclusive U.S. distribution rights and enhancing product offering.

• Restructured U.K. sales team to maximize market penetration, with expected impact in FY 2025.

Financial highlights

• Revenue increased by 11% to £16.1m; gross profit up 12.4% to £14.5m, with gross margin rising to 90.1%.

• Underlying profit before tax decreased from £4.6m to £4.0m due to increased investment in growth and resources.

• Underlying EBITDA at £6.9m (down 1.4% year-over-year); EBITDA margin 42.9% (down from 48.3%).

• 85% of revenue is recurring; user base grew 3.6% to 34,300.

• £1m in one-off transaction costs related to the Lithia deal; £4.3m non-underlying interest income from cash held for a £358.4m dividend.

Outlook and guidance

• Underlying profit before tax for FY 2024 expected to be in line with current market expectations (£7.8m).

• Lithia UK rollout on track for completion by December 2024; US rollout in planning, with pilot and full rollout scheduled for FY25-FY26.

• Anticipates continued user and revenue growth as Lithia rollout progresses and new products are introduced.

• Well-progressed discussions with potential new customers in the U.K. and internationally.

• Confident in growth prospects despite macroeconomic uncertainties and no material impact expected from broader economic challenges.