Maintel Holdings – this £32.3m cloud communications group boasts 75% recurring revenues, its ability to cope with extra costs this year will show through, shares now 225p while brokers TP is 400p

06.05.2025

This morning’s reported 2024 results statement shows that the year to end-December 2024 reduced group revenues by 3.4% to £97.9m (£101.3m), while adjusted pre-tax profits came in 32.7% ahead at £7.3m (£5.5m), with a 19.5% improvement in earnings to 28.2p (23.6p) per share.

The group has reported that in 2024 it had an annually recurring revenue of some 75% (74%), while its net debt was substantially decreased to £16.6m (£18.1m) due to higher cashflow generated from operations of £8.5m (£5.0m) supported by improved profitability and well-managed working capital.

Management Comment

CEO Dan Davies stated that:

"It is an exciting time for Maintel as we progress our business transformation plan, pivoting the Group from a generalist to a highly skilled specialist operating across three high-growth technology segments and we are pleased to report significantly improved profitability and underlying organic growth in 2024, delivered through continued transformation progress and execution of our strategy.

While, like many, Maintel faces widely publicised macroeconomic headwinds in the coming year, we continue to show resilience in a difficult market due to the mission critical nature of the communications services we provide, alongside our high levels of customer loyalty and contracted recurring revenue.

The Board remains confident that it can build on the encouraging progress made across all aspects of the business during 2024 and meet market expectations for 2025 but is again expecting the performance to be weighted towards the second half of the year.

The journey from a generalist Managed Service Provider to a highly skilled specialist continues to well-position Maintel for the future."

The Business

The company was founded in 1991 and was listed on AIM in 2004.

With offices in both London and Blackburn and with some 450 employees, this £32.3m-capitalised business is a leading provider of cloud communications, security and connectivity managed communications services to the UK public and private sectors.

Its services aim to help its clients create customer experiences, services and workplaces that inspire and empower people, with a focus across three strategic pillars of technology:

Unified Communications and Collaboration - Making customers' people more effective, efficient, and collaborative with UC&C technology. The core focus of this pillar is the high growth Unified Communications as a Service (UCaaS) market segment.

Customer Experience - Helping customers to acquire, delight and retain their customers using customer experience technology. The core focus of this pillar is the high growth Contact Centre as a Service (CCaaS) market segment.

Security & Connectivity - Securely connecting customers' people, partners and guests to their cloud platforms, applications, and data with secure connectivity, and protecting their business from cyber threat. The core focus of this pillar is the high growth Software Defined Wide Area Networking (SD-WAN) and Security Service Edge (SSE) segments.

Maintel combines technology from its strategic, global technology vendor and carrier partners, with its own Intellectual Property, deployed from and managed by its own platforms, to provide seamless solutions that its customers can consume without the need for the internal skillset required to design, deploy and manage the technology themselves.

Maintel serves the whole market, with a particular focus on key verticals of Financial Services, Retail, Public Healthcare, Local Government, Higher Education, Social Housing and Utilities.

Clients include Admiral, Biffa, Christian Aid, Knight Frank, BNP Paribas Personal Finance, Andrew Sykes, Kobalt Music, Alliance Medical, NHS Highland, West Lothian Council, Rapid Response, Lowell, Liverpool City Council, Avon, University College London Hospital Trust, Landsec, and Vanquis Bank amongst hundreds of others.

Its core market constitutes organisations with between 250 and 10,000 employees in the private, public and not-for-profit sectors with headquarters in the UK.

Last year the group won multi-year, multi-million-pound contracts with a leading housing and care provider, one of Europe's leading credit management companies, one of the UK's largest insurance companies, one of the UK's leading providers of affordable dental care, a global IT and business consulting services company, and the Leeds Teaching Hospital NHS Trust, one of the largest and busiest acute hospital trusts.

The Equity

There are 14,361,492 shares in issue.

Director Angus McCaffery holds 11.97% of the equity, while other large holders include John Booth (24.37%), Harwood Capital (18.49%), John Spens (16.2%), Herald Investment Trust (5.60%), Elite Bidco (5.00%), Hargreaves Lansdown Asset Management (3.22%), and Barclays Wealth (3.08%).

Broker’s Views

Analysts Andrew Darley and Kimberley Carstens at Cavendish Capital Markets consider the group’s shares at 225p offer a 78% upside to their 400p Target Price.

For the current year their estimates allow for a slight reduction in profitability as a result of NIC, salary rises, and final board positions, based on a realistic revenue growth expectation of 3%.

They see £101.0m (£97.9m) of revenues for the year to end December 2025, while adjusted pre-tax profits could ease to £3.8m (£4.9m), reducing earnings to 17.0p (27.8p) per share.

However, for the coming 2026 year the analysts see the group’s ability to cover its additional cost rises, with revenues of £104.0m, £4.7m of profits, with earnings recovering to 24.2p per share.

My View

Despite higher costs expected this year, the group will still be able to produce good revenues and profits, before rising again next year.

So where will the group’s shares go from here?

It is more than possible that some investors will take the view that the group’s shares will ease back to trade around the 170p to 200p price range, so step back an wait for any price drops as opportune timing for medium-term investors to add to holdings.

(Profile 03.06.20 @ 173p set a Target Price of 250p*)

(Profile 01.05.25 @ 220p set a Target Price of 275p)

(Asterisk * denotes that Target Price have been achieved since Profile publication)