Pinewood Technologies Group H1 Earnings Call Highlights

Key Points

• First-half performance improved: Underlying revenue rose 18.4% year over year to £23.2 million, while EBITDA increased 11.4% to £8.8 million. Recurring revenue remained approximately 85% of total revenue, and customer churn was negative.
• North American expansion remains on track: Pinewood expects to begin rolling out its platform with Lithia dealerships in the fourth quarter of 2026, although North American operations incurred £9.1 million of administrative costs during the half.
• Ridgeview acquisition approved: Shareholders approved Ridgeview Partners’ £4.48-per-share cash offer on September 25, with completion expected between October 9 and October 23. Cash from operations fell to £1.9 million as Pinewood invested heavily in North American development and implementation activities.

Pinewood Technologies Group LON: PINE reported higher first-half revenue and EBITDA as the automotive retail software provider advanced customer implementations in the U.K., Europe and Japan while preparing to begin its North American rollout in the fourth quarter of 2026.

Chief Executive Officer Bill Berman said the company made “strong strategic and operational progress” during the first half, with development work for the Pinewood.AI platform in North America continuing alongside deployments for Lookers, preparations for Marshall Motor Group, and sales of additional products to existing and new customers.

The company also said its recommended acquisition by Ridgeview Partners received shareholder approval on September 25. Pinewood expects the transaction to complete between October 9 and October 23. The cash offer of £4.48 per share provided shareholders with an option to roll part of their holdings into the post-transaction business, an option Berman said many investors accepted.

Revenue and EBITDA Rise

Chief Financial Officer Ollie Mann said underlying revenue increased 18.4% year over year to £23.2 million in the first half of fiscal 2026. Growth reflected new customers, upselling to existing customers and a full six-month contribution from Seez, compared with four months of Seez revenue in the prior-year period after its acquisition in March 2025.

Underlying gross profit rose 16.5% to £19.8 million. The company’s gross margin was 85.3%, declining slightly as expected because Seez carries lower gross margins than the wider Pinewood business.

Underlying EBITDA, Pinewood’s primary profit metric, rose 11.4% to £8.8 million. Recurring revenue remained at about 85% of total revenue, Mann said, with most non-recurring revenue derived from system implementations for new customers.

The company reported negative net customer churn during the half, meaning that, on a like-for-like basis, usage by its existing customer base increased. Berman said customers generally leave only when they are acquired by a larger group that uses a competing platform or when a customer ceases operations.

North American Rollout Remains on Track

Pinewood said it remains on track to begin rolling out its platform with Lithia dealerships in the U.S. during the fourth quarter of 2026. Berman said the company has been working with Lithia on original equipment manufacturer integrations and product development intended to support a best-in-class offering for the U.S. and Canadian markets.

Mann said North American operations generated £9.1 million of administrative expenses in the first half. Those costs will continue to be treated as non-underlying until the Pinewood system is installed in 20 North American dealerships. As implementations begin in the fourth quarter, Pinewood expects North American revenue to begin offsetting the costs.

During the question-and-answer session, Berman said Pinewood had held discussions with large and medium-sized dealer groups in the U.S. and Canada. He said dealer interest was strong following the company’s attendance at the National Automobile Dealers Association event, and that Lithia’s U.S. team had been impressed by testing conducted in sandbox and live dealership environments.

“We have hugely ambitious plans to firstly implement the system with Lithia Motors and Global Auto Holdings North America,” Berman said, adding that the company also intends to grow market share in the region.

U.K., Europe and Asia Deployments Continue

In the U.K., Pinewood continued its implementation for Lookers dealerships and expects that rollout to conclude in the first half of 2027. Berman said several important Lookers brands are now operating on the Pinewood system.

Lookers has responded positively to the rollout and is considering adding Pinewood’s AI products later in 2026 and into 2027, according to Berman. He also noted that Lookers’ parent-level stakeholders rolled their warrants into equity in the continuing company rather than cashing out as part of the Ridgeview transaction.

The company said preparations for a Marshall Motor Group rollout are well underway and that it is positioned to start work immediately. Internationally, Pinewood signed its first German dealer group and expects additional agreements in the coming months. The Porsche Japan rollout is progressing, while implementation for Volkswagen in Japan is expected to begin in the second half of 2027.

Pinewood completed the £3.3 million acquisition of its final reseller, located in the Netherlands, during the first half. The company now owns all of its former reseller operations.

Cash Flow and Balance Sheet

Pinewood generated £1.9 million of cash from operations during the first half, down from £8.5 million a year earlier, primarily because of investment in its North American operations. Capital expenditure totaled £8 million, including £6.4 million of capitalized development spending.

The company’s cash balance stood at £23.9 million at the end of June 2026, following a net cash decrease of £10.4 million during the period. Pinewood also has a £10 million revolving credit facility that remains undrawn.

Shareholders’ funds were £198.9 million at the end of June. Goodwill totaled £54.9 million, reflecting the acquisition of Lithia’s stake in the North American joint venture, the Seez acquisition, and the South African and Netherlands reseller buyouts. Intangible assets totaled £166.2 million, with most of that balance related to the North American customer contract.

Berman said Ridgeview’s acquisition would support Pinewood’s growth plans across its markets, particularly North America, where the company sees a significant addressable market.

About Pinewood Technologies Group (LON:PINE)

1981 – Origins Pinewood was founded in 1981 after a Renault dealer in London grew frustrated with the lack of suitable systems to run his business. He assembled a small team of developers to build a better solution, marking the birth of Pinewood as a classic early-1980s tech startup. 1980s–1990s – Early Innovation The team created one of the UK's first Sales and Dealer Management Systems (DMS), soon partnering with brands like Saab, Lloyds Bowmaker, and a growing dealer group that became Pendragon PLC. As Pendragon expanded, it acquired Pinewood to develop a multi-brand DMS capable of supporting large-scale dealership operations.

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