Pinewood Technologies Group PLC

Good morning, everyone, and welcome to our H1FY25 results presentation. I'm Bill Berman, CEO, and I'm joined today by my partner and CFO, Ali Mann. This has been another half of great progress for Pinewood AI, delivering on the strategic objectives and positioning the business for accelerated growth. Ali will take you through the headline financial shortly. But before that, I'm going to take you through an overview of the strategic and financial progress delivered in the period. We have grown our revenue by over 20%, driven by strong growth among our customers and successful upselling in our existing customer base. Our new user experience has played a significant role with positive feedback to date. On top of this, our product suite has been significantly enhanced, and a number of new products, such as our new data and analytics offering, Automotive Business Intelligence, has been launched. A key milestone in the period was the acquisition of SEAS. The automotive AI company, in March of this year, In the six months since then, we have made great progress bringing Seas into the Pinewood Group and integrating the two tech stacks to significantly enhance our AI capabilities. In addition, Seas has grown to standalone business by over 500 rooftops since it became part of Pinewood AI, with new entries in North America as well as the UK. Those stores will be fully implemented by year's end. The North American market is a core pillar of our strategy and ambitions. Buying Lithia's share of the North American JV in July represented a fundamental step in establishing a platform to maximize our impact in the market. We are on track to pilot the Pinewood platform in Q4 of this year in two Lithia stores before commencing the full rollout in the first half of 2026. I'd now like to hand it over to Ali to take you through the financial review.

Thanks Bill. Good morning everyone. We delivered strong revenue growth of over 20% to £19.6 million. This was driven by a number of factors, including revenue from the UK Lithia dealerships, for whom we implemented the Pinewood AI platform during the second half of 2024. In addition, we have successfully implemented the system for new customers in a number of geographies in the first half of 2025, as well as increasing vertical sales into our existing customers. Gross profit of £17 million was 17.2% up on last year. The slight gross margin dilution was expected. and reflects SEAS gross margins being slightly lower than the legacy Pinewood AI business. The key profit metric that we use both internally and externally is underlying EBITDA. In the first half of 2025, this was £7.9 million, up 14.5% on the first half of 2024. Our recurring revenue of 85.7% underpins the financial result. The slight drop from last year reflects the mix, with revenue from SEAS now included. Finally, our net customer churn of 0.3% highlights how much customers value the Pinewood AI platform and how integral it is to their businesses. Moving on to slide 7 where I'll talk through the key movements in our cash flow during a period. During the first half of FY25 we generated £8.5 million of cash from operations. Other key movements in cash included £0.5 million of bank interest received in the period and £10 million received from Lithia for the settlement of a tax debtor. Our total development spend in the first half of the year was £6.7 million of which we capitalised £5.2 million. There was also an additional £0.1 million of PPE capex. We expect development spend for the whole of 2025 to be just under £14 million and for there to be a gradual increase in this over the next few years. The consideration for the SEAS acquisition was £32.9 million, of which £25.7 million was cash and £7.2 million was consideration shares. Alongside the SEAS acquisition was the equity raise that we undertook in March 2025, where we raised £34.1 million of cash. All of these movements led to an end of June 2025 cash position of £30.3 million. On to slide 8 and the end of June 2025 balance sheet. The key balances on this are closing shareholders funds of £80.1 million with the main driver being the March 2025 equity raise. We now have £31 million of goodwill on our balance sheet with the increase in goodwill reflecting the SEAS acquisition in March 2025. Some of this goodwill may be reclassified to separate intangible assets following a purchase price allocation exercise. Other intangible assets of £22.7 million cover the capitalised software asset, which has grown as we have increased resource levels and development work in the period and incorporated the SEAS development team into the group. Finally, we have £30.3 million in cash. In addition to this cash, we also have a £10 million RCF facility, which remains undrawn. On slide 9 you can see the non-underlying items. Firstly, we had £1 million of transaction costs relating to the equity raise and the SEAS acquisition. We also had £0.7 million of restructuring and transition costs in the period. Our share-based payment charge was £1.4 million in the first half of FY25. And finally, our share of the JV result was a £1.3 million charge in the period. Moving on to slide 10 and our updated guidance. As a result of buying Lithia out of the North American JV, we expect a short-term accounting impact in the second half of 2025. Prior to the JV buyout, Pinewood AI recognised 51% of software development for North America as revenue and profit. This no longer applies after the buyout. As a result of this, we expect to have 1.3 million less revenue than previously forecast this year. In addition to this, Marshals have asked us to move the start of their implementation back to Q1 2026 from Q4 2025 to align with other projects they are undertaking. We still expect to complete the majority of the Marshals' implementations during 2026. As a result of these two items, we expect our FY25 underlying EBITDA to be 15.5 to 16 million pounds. Neither of these two items have any impact on our medium or long-term profitability. Looking ahead, our previous guidance for underlying EBITDA in FY27 was a range in the mid to high 30 millions. We are updating this with guidance for underlying EBITDA in FY28, which we expect to be in the range of 58 million to 62 million pounds. This is underpinned by strong visibility from existing contracts and a significant pipeline of opportunities, including our five-year contract with Lithia to roll out the Pinewood AI platform across North America. As a reminder, this contract is expected to generate an estimated $60 million of revenue per year by the end of 2028. I'll now hand back to Bill to run through the operating highlights and strategy.

Thanks, Holly. I'll now take you through the progress we've made against the strategy we set out at the Capital Markets Day last year. On the UK and Ireland front, we started the Looker's implementation in July and August of 2025 and will continue in October once we get through the key plate change month of September. The combined teams have done a great job in the initial stages of the rollout and we are confident they will continue to do so when we start work next month. We continue to extend our network of Porsche dealers globally with a successful installation in Canada during May. enabled by development of new internationally deployable manufacturer interfaces. We are pleased to announce agreement with Porsche Japan to commence implementation of the Pinewood system in all their Porsche centers in the country of Japan. This builds upon significant product development attuned to retail operations in Japan and the establishment of a nationally focused installation and support team. We look forward to the Porsche Japan rollout starting at half one 2026. With the acquisition of SEAS has transformed our vertical sales channels and allowed us to approach a much broader customer base, as well as enabling us to generate additional revenue with short lead times. We also continue to expand our range of products that we can sell to both existing and new customers. Moving on to slide 13. Bringing the SEAS team into the group in March of 2025 following the acquisition was a key moment for us. We have continued to run SEAS on a standalone basis in many of their markets to maximize the impact of the great brand recognition they have built up over a number of areas. At the same time, we have started to integrate the cutting-edge AI technology of SEAS with the Pinewood data stack. Only six months in, we have made some significant progress with a number of fully integrated tools now operational as part of the Pinewood AI platform. This is just the beginning and we're hugely excited about the roadmap of integration work and new AI products that will cement Pinewood's position at the forefront of auto AI providers. Moving on to slide 14 and the update to our recent system implementations. As mentioned at the beginning of this section, our team has done a great job so far in the Looker's implementations, working inside the Looker's team to ensure the Pinewood AI platform rollout goes as smoothly as possible. This started in 2025 and will continue for the rest of 2025 and into 2026. We are pleased that the Lithia UK team are seeing the benefits of having Pinewood AI in all of their dealerships. This follows a successful implementation in the XJardine Motor Group in 2024, where they have seen improved productivity and increased efficiencies. We are looking forward to starting the Marshalls implementation with them in Q1 of 2026. Slide 15 sets out the strong foothold we have in North America and the scale of the opportunity in front of us. Having now bought Lithia out of their share of the North American joint venture and signed a contract with them to implement the platform in their North American dealers. We're now well placed to sign further customers in the U.S. and Canada. The rollout of SEAS chatbots into the Lithia North American dealer started in September and will finish in Q1 of 2026. With 20,000 franchise dealers in North America, the size of the opportunity is huge, with a total addressable market over $9 billion. We think that Pinewood AI is in a prime position to start to grow their share of the North American market. On to slide 16 and the progress we're making towards our North American pilot. We have now engaged with the majority of the OEMs that Lithia represent, as well as third-party layered app providers that will need to integrate with us, and the integration work is progressing well. We'll be piling Pinewood AI in two of Lithium North American stores in Q4 this year, ahead of the full rollout starting in H1 of 2026. Finally, we're making great progress recruiting our North America team with a number of key roles already filled. Moving on to slide 17 and the progress in our key growth markets. We are primarily targeting the geography set out in our strategy at the Capital Markets Day last year, Japan, Southeast Asia, Central Europe, and South Africa. Last week, we signed a contract with Porsche Japan to roll out the Pinewood platform across all of the Porsche dealers in Japan. The full rollout is expected to start in the first half of 2026. We have ongoing discussions with a number of European customers, most of which are based in Central Europe. We have fully integrated our South African business into the group, following the buyout of our South African reseller, and are looking at routes to grow the business through both new and existing customers. Finally, we are also engaging with a number of potential customers in the Middle East, capitalizing on C-Strong regional presence there. This follows us buying out our Middle East reseller in August. Finally, on to slide 19. As we have set out, we have made significant progress with our strategy. Our priorities in the UK are the Lookers and Marshalls implementation, as well as adding further customers from the UK top 100 dealer groups. Our international expansion will be focused on the key geographies that we have identified, North and South America, Central Europe, Japan, Southeast Asia, and South Africa. Finally, our FY28 guidance of underlying EBITDA between 58 to 62 million pounds is underpinned by strong visibility from existing contracts. This includes a $60 million contract with Lithium North America, as well as significant pipeline of opportunities. Lastly, I'd like to thank both the Pinewood AI and C's teams for their hard work and dedication. Thank you for joining us today. We welcome any questions.