Maintel revenues flat in H1

Maintel has indicated the first half of its fiscal year revenues have come in flat due to a number of churned contracts.

The managed services and cloud comms and connectivity player issued numbers covering the six months ended 30 June, with revenues of £46.5m, compared with £46.6m a year earlier.

The churn of contracts, which the firm had flagged in its previous trading update, offset a 20% growth in project revenue and the benefits of price increases that came in over the prior year.

Adjusted EBITDA was £3.4m (H1 2024: £4.8m), with that change being put down largely to increase employer costs. The firm also increased spend on IT systems and marketing to strengthen the position of the business.

The channel player has been transforming the business, moving to a strategy based around a select number of technologies and market opportunities over the past 18 months, and it indicated that effort is continuing in the update.

Efforts to control costs and eek out more operational efficiencies remain a focus, and some of the operational changes implemented in H1 are expected to deliver savings over the rest of the fiscal year.

“Maintel continues to make good progress in executing its new strategy as part of its organisational strategic transformation, which began in 2023,” the firm stated. “To date, the key leading indicators of the turnaround progress have all been positive.”

Over H1, Maintel established its customer acquisition team, which it indicated had already started to generate a decent pipeline. During the first half, the channel player closed over £20m in total contract value of new business sales bookings from both existing and new customers.

“In total, the sales pipeline is the largest it has been for many years, climbing to £75 first year value at the end of June,” the update added.

Since the firm went through a rebranding exercise last November, the pressure has been on to get the message about the shift to a specialised MSP out in the market. As a result, the first six months of the year have seen Maintel widen its routes to market, appearing at events and launching digital campaigns, as well as the traditional advertising and collaborating with vendors on leads.

Looking ahead, the update indicated the transformation efforts and the hunt for efficiencies would continue, and that the firm was already seeing evidence of the strategy working.

The ambition has been to land deals that can produce higher earnings from a range of verticals, including financial services, healthcare, retail and social housing.

“The board remains focused on Maintel’s long-term growth strategy and believes that, following the company’s transformation from a generalist managed service provider to a highly skilled specialist, the business is making good progress,” it stated. “Such turnaround programmes take time, however, the positive leading indicators outlined in this update demonstrate great progress, and the board is confident that these leading indicators will convert into improved financial results and increased shareholder value.”

The phrase “cautiously optimistic” was used to describe the feelings about the second half, with the business still on track to meet expectations for the full year.