Pinewood Technologies Group H1 2026 Earnings Call Transcript

Quartr
Provided by Quartr
September 30, 2026

Key Takeaways

  • Positive Sentiment: H1 revenue rose 18.4% to £23.2 million, while underlying EBITDA increased 11.4% to £8.8 million, supported by new customers, upselling and a full-period contribution from Seez.
  • Positive Sentiment: Net customer churn was negative, indicating increased usage among existing customers, while recurring revenue remained approximately 85% of total revenue.
  • Positive Sentiment: The company remains on track to begin rolling out its platform to Lithia’s first U.S. dealerships in Q4 2026, marking a key entry point into the large North American market.
  • Negative Sentiment: Cash from operations fell to £1.9 million from £8.5 million, while £8.0 million of capital expenditure—mostly development spending—contributed to a £10.4 million decline in cash to £23.9 million.
  • Positive Sentiment: Shareholders approved Ridgeview Partners’ £4.48-per-share acquisition offer, which is expected to complete between October 9 and 23 and is intended to provide additional technology expertise and capital to accelerate growth, particularly in North America.
AI Generated. May Contain Errors.
Earnings Conference Call
Pinewood Technologies Group H1 2026
00:00 / 00:00

Transcript Sections

Skip to Participants
Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

Good morning everyone, and welcome to our H1 FY 2026 results presentation. I am Bill Berman, the CEO, and I am joined today by our CFO, Ollie Mann. The first half of 2026 saw strong strategic and operational progress alongside continued growth. Our teams continue to deliver and drive the company forward, including in North America, where the rollout of Pinewood.AI platform is gathering momentum. in August, we announced a recommended acquisition by Ridgeview Partners.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

The acquisition was approved by shareholders last week, and is expected to complete within the next month. I will expand on that shortly. Ollie will then take you through the headline financials in a few minutes. Before that, I am going to touch on the strategic and operational progress from the first half of 2026. In the first half of 2026, our key priorities have been, first, progressing on our North American product and development work.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

Secondly, continuing our system implementation with Lookers, as well as various other customers throughout the U.K. and Europe, as well as Porsche Japan. Thirdly, working closely with Marshall Motor Group as we move near to starting the rollout with them in 2026. Lastly, in addition to selling the core system, selling our expanding suite of products to both existing and new customers. Our North American development work has continued at pace throughout 2026, both on the all-important OEM integrations, but also to ensure that the system being rolled out is the best-in-class offering in the U.S. and Canada. We have been working closely with Lithia's team to ensure we hit our target rollout start in Q4 of 2026. We are on track to do this, and this is a testament to the hard work by both the Pinewood and Lithia teams.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

In the U.K., we have continued the system implementation with the Lookers dealers and expect this to conclude in the first half of 2027. We have also been laying the groundwork with Marshall Motor Group to ensure that their system implementation gets off to a smooth start, with that work well underway. Our product and development teams have developed some excellent new products in the last few years, alongside the AI products we acquired with the Seez transaction last year. We are now seeing the benefits of that work as we increase our sales across existing customer base, as well as new customers. One of the strongest proof points of the value that customers place in the solution is churn. In fact, we actually had negative churn through the first half of 2026, with increased system usage from our existing customer base.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

In mid-August, we announced a recommended offer from Ridgeview Partners to acquire the group. The cash offer of GBP 4.48 represented attractive premium and provide Pinewood.AI with access to deep technology expertise, long-term capital, and partner with a strong track record of helping software businesses scale. Given how supportive our shareholder base have been over the last few years, with a firm belief in the growth opportunity for Pinewood, particularly in North America, we felt it was important that we had a chance to continue to be involved in our journey. With that in mind, shareholders also had the opportunity to roll some of their stake over into the post-transaction business. We are delighted that so many shareholders took up that option and will continue to be part of the next chapter of our journey with us.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

Following the successful shareholder vote last Friday on the 25th of September, the deal is now expected to complete between the 9th and the 23rd of October. I will now hand it over to Ollie to take us through the financial review.

Ollie Mann
Ollie Mann
CFO at Pinewood Technologies Group

Thanks, Bill. Morning, everyone. In the first half of FY 2026, our underlying revenue grew by 18.4% to GBP 23.2 million. This increase was driven by a number of factors, including the positive impact from new customers, upsells to our existing customer base, and having a full six months of contribution from Seez. Whereas in the first half of FY 2025, we only had four months worth of Seez revenue following the acquisition of that business at the start of March 2025.

Ollie Mann
Ollie Mann
CFO at Pinewood Technologies Group

Underlying gross profit of GBP 19.8 million was 16.5% up on last year. The gross margin rate of 85.3% fell slightly as expected, and reflects Seez's gross margins being lower than the wider Pinewood business. Underlying EBITDA, which is our key profit metric, was up by 11.4% to GBP 8.8 million in H1 FY 2026. We have maintained our recurring revenue at around the 85% mark, with a marginal drop from last year.

Ollie Mann
Ollie Mann
CFO at Pinewood Technologies Group

The majority of our non-recurring revenue is from new customer system implementations. Our net customer churn was negative in the first half of the year, meaning usage from our existing customer base on a like-for-like basis actually increased in the period, which demonstrates the importance of the Pinewood system to our customers. On slide eight, you can see the movements in our cash flow during the first half of 2026. During H1 FY 2026, we generated GBP 1.9 million of cash from operations. The reduction from GBP 8.5 million in the first half of FY 2025 was due to the increased investment in our North American operation, which is shortly due to become revenue generating once the first Lithia U.S. dealers go live in quarter 4 2026. The capital expenditure figure of GBP 8 million in H1 FY 2026 includes GBP 6.4 million of capitalized development spend.

Ollie Mann
Ollie Mann
CFO at Pinewood Technologies Group

In the first half of 2026, we completed the buyout of our final reseller, which was based in the Netherlands, for GBP 3.3 million. We have now bought out all of the resellers that we had. These movements were the primary drivers of the net decrease in cash of GBP 10.4 million, leading to an end of June 2026 cash position of GBP 23.9 million. On slide nine is the end of June 2026 balance sheet. There were closing shareholders' funds of GBP 198.9 million, with the main driver of the increase from the end of June 2025 being the July 2025 North American JV buyout. We now have goodwill of GBP 54.9 million on our balance sheet due to the buyout of Lithia's share of the North American JV, the Seez acquisition, and the South Africa and Netherlands reseller buyouts.

Ollie Mann
Ollie Mann
CFO at Pinewood Technologies Group

Our intangible assets balance of GBP 166.2 million primarily arose through the North America JV buyout and Seez transactions, with the majority of the balance relating to the North America customer contract. Most of the tax liability we have relates to the U.S. JV buyout and will unwind as the intangible assets are amortized. Finally, we have GBP 23.9 million in cash. In addition to this cash, we also have a GBP 10 million RCF facility which remains undrawn.

Ollie Mann
Ollie Mann
CFO at Pinewood Technologies Group

On to slide 10, where we have the non-underlying items for the first half of FY 2026. There was a GBP 0.3 million debit to revenue relating to the amortization of the Global Auto Holdings warrants. We had GBP 9.1 million of administrative expenses in our North American operation in the first half of the year. As guided previously, these costs will be treated as non-underlying until the Pinewood system is installed in 20 North American dealerships.

Ollie Mann
Ollie Mann
CFO at Pinewood Technologies Group

As we start our system implementations for Lithia's North America dealers in quarter four 2026, we will start to offset these costs as our North American revenue grows. There was a GBP 2.8 million credit relating to net fair value gain on the Lookers' warrants. Our share-based payment charge was GBP 2.2 million in H1 FY 2026, and there was the GBP 4 million amortization charge relating to intangibles arising on acquisition. I will now hand back to Bill to run through the operating highlights and strategy.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

Thanks, Ollie. Most of you will be familiar with this slide, which sets out Pinewood's key strengths and what sets us apart from our competition. As I mentioned earlier when talking about the first half of 2026, our customer churn is extremely low, with customers generally only leaving us if their organization is bought out by a larger group using a competing system, or if a customer goes out of business, with both of these happening rarely. I have spoken previously about the importance of being 100% cloud-based with one code base, which is still unusual in our industry. Our customers all being of the same version of the system whenever they are in the world is a big advantage for us. From a security point of view, it is much more secure being a cloud-based platform than being hosted or using on-prem servers.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

Additionally, we are able to release software updates in a controlled manner, keeping our customers fully informed about any updates in the system functionality. The majority of our revenue is recurring and generally covers around 85%. Our customers pay quarterly in advance for the majority of their products. The main part of our revenue that is not recurring is the implementation income, which we charge to new customers and some existing customers for one-off pieces of work. Having a fully embedded AI offering with multiple AI products sets us apart from the majority of our competitors. In addition to our AI products being fully embedded, they are also available to new customers on a standalone business without the main platform. While we continue to innovate and recruit new talent, our expert experienced workforce underpin what we offer.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

We have 40 years’ experience in the automotive industry, a large portion of which has been part of an automotive retail group. We have a unique team, many of whom worked with us both in the software and auto retail industries. Finally, our partnerships with the OEM partners are central to our success. We have excellent relationships with our OEMs all around the world, and our market-leading technology means that our integrations with them are seamless and the benefit of all of our customers. I'll now take you through the progress we made against our strategy during H1 2026. We have made good progress on the Lookers implementation in the first half, with a number of important brands for Lookers now operating on the Pinewood system. The combined Pinewood and Lookers team worked together really well on that rollout.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

We continue to work closely with Marshall Motor Group on finalizing preparations for their rollout, and we're in good position to start that immediately. In our international markets, we have recently signed a contract with our first German group and have more expected to follow in the next several months. In Japan, the Porsche rollout is going well. We expect to begin the Japan Volkswagen implementation in the second half of 2027. We bought our Netherlands reseller out in March of 2026, which means that we have no longer any other resellers. Our product suite continues to develop at pace with a number of products that our teams have developed over the last two years, now available to sell to customers along with the market-leading AI offerings we now have following the Seez acquisition last year.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

The final pillar of our strategy, North America, is by some distance the largest automotive retail software market in the world. We are now on the verge of having the Pinewood system live in the U.S. by the end of 2026, which will be a huge achievement, but just the beginning of our story in North America. We have hugely ambitious plans to firstly implement the system with Lithia Motors and Global Auto Holdings North America, but alongside this, to grow our market share as quickly and as aggressively as possible. Finally, onto slide 15. In the U.K., we will continue to work alongside the Lookers team to continue the rollout in the first half of 2027. We look forward to starting the Marshall Motor Group rollout imminently. With the Pinewood platform about to go live in the U.S., we are entering an exciting period in the company's history.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

We could not have a better partner to launch there with the Lithia Motors team, and we look forward to growing our market share in the U.S. and Canada shortly thereafter. The acquisition by Ridgeview Partners will also accelerate our growth trajectory in all markets, but particularly North America, where there is a significant addressable market. Thank you to all the members of the Pinewood team for their continued hard work in driving us forward. We'd like to thank all of our shareholders for the support after the last two to three years, and we're delighted that many of them are rolling their stake to the continuing journey with us. Thank you for joining us today. We welcome any questions.

Operator

Thank you. Ladies and gentlemen, if you wish to ask a question over the phone, please signal by pressing star one on your telephone keypad. You may also submit your questions via the webcast. Again, it is star one to ask a question over the phone. The first question is from Andy Wade from Jefferies. Please go ahead, your line is open.

Andy Wade
Andy Wade
Analyst at Jefferies

Morning, team. A bittersweet moment, but I guess congratulations on a good job. Two questions from me. First one, in terms of Lookers, and also the U.S. pilot stores, any feedback you can give us? Interested across the board, whether it is from a dealer level or whether it is from further up the chain. I suppose, more interested on the Lookers side of things, how the dealers are viewing the implementation, how it is changing their lives and so on. Is it making things easier? Is it making cost savings possible? That is the first one. The second one, following the U.S. JV buyout, have you had much in the way of further conversations vis-a-vis future U.S. partners? Thanks very much.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

Hey, Andy. Yeah, bittersweet. I am sure somehow you and I and Philip and the whole team will still be engaged for the years to come, but I think it is a pretty exciting time for the company as a whole.

Andy Wade
Andy Wade
Analyst at Jefferies

I hope so.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

Yeah, absolutely. Especially with Philip spying. As we go forward, I can tell you, I'll start with your second question and tie it into your first one. We've had lots of conversations with lots of the large, medium-sized groups in North America. We did NADA this year. In addition to winning Best Booth and Best New Entrant, we had a tremendous amount of engagement with various dealers of various sizes out of Canada and the U.S., and they're very impressed with the product. I can tell you on a Lithia sense, as we get ready to roll out later this year, first stores with them in North America, we have done deep testing with them, both in sandbox but in live actuated stores, and let them see the product.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

The U.S. team has been really impressed, and they saw the same benefits that Lithia UK, and even the prior Jardine stores as they came out of the platform in 2024, saw as well. So, real positive things coming out of North America. Can't really speak for other customers. I can tell you the Lookers role has gone very well. They've been great partners. They're liking the different products that we bring into it. They're looking into putting the AI products in starting later this year and into next year. They have seen the same type of results that Lithia UK saw as well. I can't get much deeper into that. You'd have to ask them more specific-

Andy Wade
Andy Wade
Analyst at Jefferies

Yeah

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

because they've got other things on the docket on their end. But they've been great partners. I think the biggest thing I can say with Lookers, Andy, is their leadership and management teams in the U.K. have been incredibly supportive and helped roll things out. But even at the next level up, they took their warrants and rolled it into equity and are staying on as a shareholder in the new company.

Andy Wade
Andy Wade
Analyst at Jefferies

Yeah.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

I thought that was a great testament. They could've taken some money off the table, and they decided to put that back into the company and continue on the journey with Pinewood.

Andy Wade
Andy Wade
Analyst at Jefferies

Great stuff. Thanks very much. Well done.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

Thanks, Andy. Take care.

Ollie Mann
Ollie Mann
CFO at Pinewood Technologies Group

Thanks, Andy.

Operator

Thank you. We have no further questions. With that, we will close the call. Thank you for listening.

Bill Berman
Bill Berman
CEO at Pinewood Technologies Group

Thanks, everybody.

Ollie Mann
Ollie Mann
CFO at Pinewood Technologies Group

Thanks, everyone.

Executives
    • Bill Berman
      Bill Berman
      CEO
    • Ollie Mann
      Ollie Mann
      CFO
Analysts
Powered by Quartr