Made Tech (MTEC ), a provider of data and technology services to the UK public sector, released an interim trading update for the 6 months ended 30 November 2022 (H1 23).
Made Tech reported revenue growth of 76% to £20.6m in the period, compared to £11.7m in the previous year. Sales bookings rose 23% to £32.6m, compared to £26.5m a year ago, and its contracted backlog was up 53% to £47.8m, compared to £31.8m in the first half of 2022.
The company reported adjusted EBITDA of £0.5m, in line with management expectations at £0.5m but down from £1.2m in H1 22. Net cash at the period end stood at £9m, again down from last year's £11.1m.
Rory MacDonald, CEO, commented: "We are delighted to have delivered another period of strong growth. It is pleasing to note that our contract sizes continue to grow as we become more established in the market. These wins, together with the new Home Office contract announced in November 2022, demonstrate Made Tech's ability to deliver digital technology successfully, and highlight the strength of our reputation in this growing market. As a result, the Group remains on track to meet market expectations for the full year and deliver value to shareholders over the long term."
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Made Tech's strong performance in the first half of 2023, including year-on-year revenue growth of 76%, prompted a positive reaction from markets, driving MTEC shares up 23%. The company's record contracted backlog, worth £47.8m on 30 November 2022, positions it for continued growth throughout the remainder of the year and into 2024
Post-period, Made Tech won 3 new contracts, collectively worth £27m. The three new clients are DVLA (worth £14m over 2 years), Department for Levelling Up, Housing and Communities (worth £8m over 4 years), and the Cabinet Office (£5m over 2 years).
The company secured the contracts despite government and market turmoil in the second quarter. Still, the slowdown resulted in reduced gross margins in the half, partly due to delays to bid submissions - a common risk among those companies dependent on govenment contracts. Made Tech says it has managed costs to accommodate the disruption and expects margins to "materially improve" in the second half.
Despite a reduction in net cash, Made Tech remains well-funded with £9m in the bank and no debt, and is on track to meet full-year market expectations.
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