Maintel suffers 'hugely frustrating' H1 amid supply chain shortages

Ioan MacRae says anticipated challenges 'exceeded our initial expectations'

Maintel's CEO has said the first half of 2022 has proved to be "hugely frustrating" with its revenues impacted by global supply chain issues.

Ioan MacRae said supply challenges were much worse than it first anticipated during the six months to 30 June 2022, with shortages leading to delayed project implementations.

This in turn adversely impacted revenue. Maintel's sales fell by 12.7 per cent year on year to £46.7m during the half-year period.

Adjusted EBITDA also reduced to £3.6m (H1 2021: £4.3m), reflecting the revenue dynamic.

"The first half of FY22 has proved hugely frustrating with anticipated challenges exceeding our initial expectations," MacRae said.

"The global hardware supply chain crisis, and in particular the shortage of semiconductors, deterred Maintel from delivering timely projects ordered by customers in the latter part of 2021 and early 2022.

"The acute delays in global logistics translated into significantly delayed revenue recognition for Maintel.

"Whilst supply chains are set to improve, normalisation is not anticipated until the second quarter of 2023."

Despite this, total recurring revenue continues to grow and now represents 73.7 per cent of Maintel's revenue for the period - up from 68.9 per cent.

Cloud transition also grew, with associated cloud and software revenues amounting to £19.8m, up 24.5 per cent compared to £15.9m in H1 2021.

"Our transformation to a cloud and managed services business continues," MacRae said.

"It was pleasing to see a mix of public and private cloud solutions being sold during the period, proving our updated cloud portfolio is resonating across our UCaaS and CCaas offerings."

Maintel says its sales team performed to target in H1, despite the slowdown in the public sector tenders and customer concerns over hardware supply delivery.

And it's sales order book reached an all time high with multi-year contract values totalling over £45m.

"Our sales team continue to build the sales order book with a strong order intake for the first 6 months and in line with expectations," MacRae said.

"The sales team have won some significant customer contracts, albeit the associated revenues are unlikely to significantly benefit financial performance until 2023.

He added: "The group remains focused on managing the cost base, while not compromising future growth, despite the impact of inflation and the associated price increases from suppliers, as well as the salary increases to retain and support staff with the rise in the cost of living."