Digital services provider to the public sector Made Tech (LON:MTEC) posted a strong FY trading update and raised guidance again. The AIM-listed firm said activity had exceeded its expectations and its results would exceed its previously upgraded forecasts.
Raising guidance again
For the year to May, the group expects revenue of £58.9 million, up 27% and ahead of market expectations. The company-compiled consensus is £57.5 million, up from £55 million at the 1H stage when the firm raised its outlook.
Adjusted EBITDA is expected to rise 69% to £5.9 million compared with the latest consensus of £5.6 million. At the 1H stage, the firm said it would ‘materially’ beat the then-consensus of £4.8 million. It attributed its improved performance to improving contractor mix, utilisation and operational leverage.
Since H1, the firm has received several new contracts including a £19 million, three-year deal with the Government Digital Service. The GDS has been a client since 2018, and the new contract ‘further strengthens Made Tech’s position at the heart of central government technology delivery’.
The firm said its bookings momentum and healthy contracted backlog provided it with good revenue coverage into FY27 and beyond. Meanwhile, AI is ‘creating new product and growth opportunities’ as the UK public sector embraces the technology.
CEO Rory MacDonald commented: ‘FY26 has been a transformational year for Made Tech. We have delivered strong revenue growth, materially improved profitability and cash generation, and enter FY27 with significant positive momentum.’
As we said at the interims, we like companies which serve the public sector. As well as tending to get paid on time, they get paid in full. The government’s Spending Review, which became operative this April, offers plenty of opportunities for the firm to win more work.
The CEO touched on materially improved profitability, and we note the EBITDA margin is ahead of target. He also flagged the firm’s net cash status, with £14.5 million in the kitty.
That’s over 25% of the company’s market cap, so the underlying business is valued around 13 times consensus FY26 earnings. Given earnings are set to exceed forecasts, that multiple could be nearer 10 times and might be below that for FY27.
