Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation. With the publication of this announcement, this information is now considered to be in the public domain.

23 July 2025

Software Circle plc

("Software Circle", "the Company" or "the Group")

Preliminary Results for the year ended 31 March 2025

Software Circle plc (AIM: SFT) announces its full year audited results for the year ended 31 March 2025.

Financial highlights

	2025	2024
Revenue	£18.3m	£16.2m
Operating EBITDA (oEBITDA)*	£4.8m	£2.8m
Adjusted EBITDA (aEBITDA)*	£3.2m	£1.7m
Total comprehensive loss	£(0.4)m	£(2.4)m
Operating cash flow per share (OCFPS)*	0.5p	0.6p
Cash generated from operating activities	£2.9m	£2.3m
Cash and cash equivalents	£8.6m	£15.4m
Earnings Per Share (EPS)	(0.1)p	(0.9)p
Net debt / (cash)	£2.2m	£(6.9)m

*Alternative performance measures defined in note 9

 

●      Combined organic revenue growth in acquired companies of 5%

●      £3.7m of revenue growth added through acquisition

●      Organic growth in oEBITDA of 22%

●      Increased Recurring Revenues from 57% to 70% of total revenue

●      Annualised Revenue Run Rate of ~£20m

●      Increased aEBITDA margin from 10% to 17%

 

Strategic and Operational highlights

●      £6.7m settlement of Bond Facility, unlocking future funding opportunities

●      £16.7m Debt facility secured to extend deployable capital

●      Acquisitions of Be The Brand Experience Ltd, Link Maker Systems Ltd and Total Drive Ltd

●      Completion of sale of the printing.com domain

●      Our first ever Software Circle Summit - delivered in March 2025

 

For further information:

Software Circle plc
Gavin Cockerill (CEO)	via investors@softwarecircle.com
Allenby Capital Limited (Nominated Adviser and broker)	0203 328 5656
David Hart / Piers Shimwell (Corporate Finance) Joscelin Pinnington (Sales and Corporate Broking)

 

Notes to editors:

Software Circle plc (AIM: SFT) has a mission: to be a leading serial acquirer and operator of Vertical Market Software businesses in the UK and Ireland - a permanent home for software leaders, teams, and customers. These are mission-critical systems, deeply embedded in the day-to-day workflows of users.

 

We help founders find the right exit strategy, acquiring businesses at appropriate valuations, supporting their organic growth over time, and reinvesting the free cash flow they generate into further value-accretive opportunities. We are building a group that gives shareholders diversified exposure to these software businesses, with discipline, alignment, and operational know-how.

 

Software Circle continues operations in an independent, decentralised way, and maintains the entrepreneurial spirit and culture that exists in the businesses acquired, enabling organic growth to be driven. Our goal is to create an environment where motivated teams can do their best work for the benefit of the most important stakeholder: the end customer.

 

 

Chair's Statement

This is my first statement as Chair, and I'm proud to help shape a company with the potential to become a powerful long-term compounder.

 

The Company has completed a fundamental transformation-and done so with remarkable smoothness. That's rare. It has evolved from a capital-intensive print operation into a focused, decentralised group of vertical market software businesses. This shift has not only reshaped our revenue profile and operating model but also positioned Software Circle as a long-term, value-driven acquirer.

 

Credit goes first to Gavin Cockerill, Iain Brown and Richard Lightfoot. Recognising the shifting dynamics of the printing industry, they took inspiration from Buffett's advice-they chose to change the boat rather than spend energy patching a chronically leaking one. With Roman Rothenberg joining and now leading our M&A, the current executive team took shape. Under Jan Mohr's leadership, the Board also played a key role - providing stability and guiding the transformation in its infancy with clear direction.

 

My involvement with the Company began simply as a curious and engaged shareholder. As an investor, I was familiar with successful serial acquisition models across many sectors. We've used this knowledge to help shape our thinking and our process during our transformation. Since those early days, and after joining the Board in September 2022, we have achieved a significant amount in a relatively short period of time. In September 2024, the Board asked me to take over the Chair role from Jan Mohr.

Now, I take on this responsibility at a time when the foundation is in place, and the strategy is clear.

Let me give you a high-level view of our strategic direction:

Our mission is to be a leading serial acquirer and operator of vertical market software (VMS) businesses - a permanent home for software leaders, teams, and customers. Achieving our mission relies on two pillars: disciplined M&A and operational excellence. We aim to deploy capital thoughtfully, acquiring businesses that fit our quality requirements and exceed our return thresholds.

Equally important is what happens after the acquisition: our focus on driving organic growth through a decentralised organisation, where leaders remain close to their businesses and retain the freedom and accountability. At the same time, we support them with operational tools and methods, and a network of peers who share best practices. Our goal is to create an environment where motivated teams can do their best work for the benefit of the most important stakeholder: the end customer.

 

The clearest proof that we deserve to be in business-and that we're creating value-is our ability to consistently earn returns above our cost of capital. More specifically, Operating Cash Flow Per Share shows how much of that value is true earnings power-and how effectively we are compounding it over time. That's why we view this metric as the ultimate benchmark by which we hold ourselves accountable, and as the foundation of long-term shareholder value creation.

 

I've observed that successful companies are built on two essential qualities: clarity and alignment. Clarity means we all understand what we're trying to achieve, how we'll get there, and the values that guide us. Alignment means there's no ambiguity-everyone is on the same page and moving in the same direction. But to build a truly strong culture-one that encourages constructive challenge-there's one more essential ingredient: trust. Trust creates the space to be honest and open, to speak up without hiding behind popular opinion or consensus. As Chair, my goal is to help shape such a culture within our Board.

 

The Board's Role

 

Following recent governance changes, we have a Board with deep expertise in software operations, finance, and capital allocation. In September 2024, we were pleased to welcome Marc Maurer-with experience at Constellation Software and, more recently, at Chapter's Group AG-and Brad Ormsby, who has served as CFO of Judges Scientific plc for over a decade. Both bring invaluable insight from their time at serial acquirers that achieved 100-bagger status, compounding shareholder value over many years. These are exceptional companies we greatly admire and I'm glad to have Marc and Brad on our Board.

For our M&A engine, the Board has set clear guardrails to ensure every potential acquisition meets strict criteria. Each transaction is reviewed by the Investment Committee, which consists of Marc and myself. Any opportunity outside these parameters requires formal approval from the full Board. Roman Rothenberg and the M&A team have done an outstanding job, completing three acquisitions in the year ended 31 March 2025 ("FY25").

The Board carefully oversees capital allocation, guided by what maximises long-term value per share. We ensure that the company selects the right mix of internal cash flows, equity, and debt, and that capital is deployed into acquisitions that meet clearly defined standards. Importantly, we remain vigilant against the temptation to pursue growth for its own sake. We prioritise quality over quantity, knowing that true value for shareholders lies in sustainable, per-share growth-not just deal volume.

To support that discipline, the Board has designed a remuneration structure that encourages dealmaking only when the price and quality is right (see the Remuneration report for details). Going forward the Remuneration Committee will monitor and review whether our compensation plan works as intended.

For our organic growth engine, first defining the right metrics to assess the operational health of our companies was paramount. How do we measure the success of what we're doing? What does "good" look like? (See the Key Financial Performance Indicators and the CFO's Report) The Board also provides strategic support to drive systematic improvement-whether through expansion, volume growth, or cost reduction. Looking ahead, we must continue to develop the methods, practices, and the right culture that enable our managers to apply these principles systematically. (You can read more about this in the CEO's Report, including insights from our first Software Circle Summit).

 

So, how has last year been?

 

During the last financial year, our total revenues grew 13% to £18.3m (2024: £16.2m). Operating EBITDA increased to £4.8m (2024: £2.8m), representing a growth rate of 71%. This growth can be attributed to acquisitions (£1.3m) and organic growth (£0.7m), demonstrating that both of our growth engines are performing well. The current level of Operating EBITDA has been created by deploying the total capital invested since we began our acquisition strategy, which now stands at £24.7m (2024: £15.5m). This results in an operating Return on Capital Deployed (oROCD) of 24% (2024: 21%). While this figure excludes central costs, it serves as a useful indicator of operational efficiency and capital allocation discipline.

 

As we scale, the all-in ROCD - including central costs - along with our ultimate yardstick, operating cash flow per share, will provide a more comprehensive and meaningful view of our performance. During the last financial year, we have deployed £9.2m in M&A, and we expect this investment to further increase returns in the year ahead.

 

We ended the financial year with cash of £8.6m (2024: £15.4m) and net debt of £2.2m (2024: net cash of £6.9m). In addition, we secured an extra debt facility, giving us greater flexibility and more dry powder to pursue future acquisitions. You'll find more detail on the Group's underlying revenues and profits in the CEO's Report and CFO's Report.

 

I want to express heartfelt thanks to our teams across the Group-their hard work, commitment, and belief in what we're building has been instrumental in driving our progress.

 

Lastly, I want to thank our shareholders. Many of you are familiar with the serial acquisition model. We're fortunate to have your full alignment with our long-term vision. Your capital has made this journey possible-and we continue to benefit from your thoughtful questions and valuable insights.

 

I look forward to seeing many of you at our AGM in September in Manchester.

 

 

Matthias Riechert

Chair

 

 

 

Chief Executive's Statement

 

Dear Shareholders

It has, once again, been a year of meaningful progress for the Group. We continue to execute our disciplined and long-term strategy: to acquire Vertical Market Software ("VMS") businesses that meet our criteria at appropriate valuations. Supporting their organic growth over time, and reinvesting the free cash flow they generate into further value-accretive opportunities. We've delivered strong financial performance and have started implementing what is required for continued growth in future years.

The road to now

Last year, we outlined the clear roadmap we've been working toward-what we call our strategic gates-to track our transformation from legacy operations to a high-performing group of Vertical Market Software ("VMS") companies.

●    Gate 1 (FY22):

Pivot the business by exiting print manufacturing, defining our guardrails, and assembling the right team.

●    Gate 2 (FY23):

Build a disciplined acquisition engine, completing four acquisitions funded through a bond raise.

●    Gate 3 (FY24):

Prove our model by delivering organic growth and achieving 10% aEBITDA, while raising equity to scale.

●    Gate 4 (FY25+):

Deploy that equity to reach ~£25m revenue run-rate, exceed 15% aEBITDA margin, and unlock access to debt facilities to fund future growth.

At each stage, we've focused on compounding cash returns, not just completing transactions. Today, with nine operating units, ~£20m annualised revenue, employing 160 talented people across five operating segments, 17% aEBITDA margin, and a scalable debt facility in place, we've passed through Gate 3 and have Gate 4 unlocked and firmly in our sights.

During the year, we welcomed three new acquisitions, deploying £8.7m of the capital raised through equity in September 2023, plus £0.5m in acquisition costs. We would like to extend a heartfelt welcome to all of our recently acquired teams and our sincere thanks to all our team members for their continued dedication, hard work, and engagement over the past year. Their commitment has been instrumental in helping the Group make meaningful progress once again, and we're proud of what we've achieved together so far.

Initially, our strategy was funded through a bond facility established in 2020.

In September 2023, having proven our ability to acquire and grow our first four VMS businesses, we raised £23.1m of new equity, an important step providing a strong foundation to continue the execution of our strategy during its infancy. We have since begun deploying this capital into a carefully selected pipeline of opportunities, acquiring businesses at disciplined entry multiples to secure attractive initial cash yields and Return on Capital Deployed ("ROCD").

Driving Organic Growth and Compounding Cash Returns

Post-acquisition, we focus on driving organic growth, margin expansion, and operational excellence within each of our business units. Two key measures of profitability for the Group are: Operating EBITDA ("oEBITDA"), a measure of the cash generative profitability of our portfolio and Adjusted EBITDA ("aEBITDA"), a measure of how efficiently the Group manages that portfolio to generate free cash flow that we can redeploy. As these measures grow, so does free cash flow - which we then deploy into the next opportunity, creating a flywheel of compounding returns. Each successful acquisition adds permanently to the Group's cash-generating base, reinforcing the strength and resilience of our growing, diverse portfolio.

A core pillar of our approach is our relentless focus on growing Operating Cash Flow Per Share ("OCFPS"). Of course, there are a number of day-to-day measures, many we discuss later, that we focus on delivering that ultimately impact OCFPS. We believe this to be the single most important lag measure of long-term shareholder value creation. While accounting earnings can be influenced by non-cash items or acquisition timing, OCFPS reflects what truly matters, the cash available to reinvest or reduce debt - on a per-share basis. It gives us a clear and consistent lens through which to assess performance, guide capital allocation, and ensure we are compounding value for our shareholders year after year.

We believe our approach rewards patience and operational focus. It allows us to build long-term partnerships with management teams, make investment decisions without artificial timelines, and allocate capital with discipline and purpose. Over time, consistent growth in OCFPS translates into growing intrinsic value per share - and ultimately, long-term shareholder returns.

This is not a strategy that chases short-term gains. It is built to endure. In a world of increasing complexity and volatility, we believe this long-term, cash-focused approach offers the right combination of resilience, predictability, and value creation.

To accelerate the compounding effect of this strategy, we entered into loan facilities of up to £16.7m in November 2024. This enabled the full repayment of the bond facility that started our journey and provided a £10.0m committed acquisition facility, unlocking the Group's ability to fund M&A in the future. We will selectively use this financial leverage to increase our deployable capital - enabling us to execute on more opportunities without unnecessarily diluting shareholders. We do this conservatively, maintaining a group-wide leverage ratio below 3x aEBITDA. This strikes the right balance between enhancing returns and preserving financial resilience.

Why founders choose Software Circle

As a group, we've built software our entire life. Software is in our DNA. That DNA is rooted in the hard-earned lessons of building, scaling and transitioning our business over the last two decades. Alongside this is a background in franchising, which means developing operational playbooks and scalable business systems has always been part of our modus operandi. A unique blend that gives us perspective on what it takes to grow a collective of independently run operating units, in a sustainable way.

We understand the opportunities and challenges faced by founders because we have walked in their shoes. We understand firsthand the blood, sweat and tears that go into building a software business.

Through that experience, we bring empathy, operational experience, and a balanced decentralised approach to ownership-supporting growth without disrupting what makes each business special, which is why founders choose us.

As a permanent owner we also do not rely on exits to crystallise returns - we are builders and stewards, not sellers. That distinction shapes everything we do and every decision we make. For founders, knowing that our view is long term and that their customers and teams have a stable and permanent home is often a key determining factor in choosing us as a new permanent owner. All of which translates into three key pillars:

No Drama: We operate with simplicity, clarity and pace. Executing deals without unnecessary fuss or drama. We bring certainty to the process and flexibility to the outcome. Whether a founder wants to fully exit, remain actively involved, or take on a transitional consultative role, we adapt to the situation and respect what makes each business work.

No Meddling: Our model is decentralised by design. We believe those closest to the customer should make the day-to-day decisions. Our job is not to interfere, but to empower. We provide capital, support, and a long-term perspective-allowing each business to retain its identity and build upon its momentum.

No Bullsh*t: We're open and transparent in everything we do, from the way we arrive at our valuations, drive the acquisition process and operate our businesses.

Building a culture of collaboration

The previous financial year has marked our first full year operating as Software Circle plc. A newly assembled Board and a change in identity that signifies the direction of and clarity in our Group strategy.

The 'new suit' fits rather well.

This year also saw our first ever Software Circle plc Summit. It was an opportunity for our business leaders not just to step back from the day-to-day, but to step closer to one another. For many, it was the first time meeting in person, despite having collaborated virtually. Ultimately, we hold events like these to learn from each other, build relationships and give our teams the belief and know-how to achieve their breakthrough objectives for the year.

While each business operates in a different vertical, with its own systems, customers and nuance, a palpable shared DNA was evident. Common challenges were voiced-scaling teams, evolving systems, navigating customer demands-and more importantly, shared solutions were offered. Best practices flowed freely, experiences were openly exchanged, and a real sense of mutual respect and camaraderie emerged.

It was great fun with smart, talented and thoroughly decent people from across the Group. 'SFT Top Trumps' also made its debut appearance, crowning its first champion!

Autonomy is core to our model but autonomy must be underpinned by a strong cultural foundation-one that values openness, collaboration and a shared ambition to grow sustainably and intelligently. The Summit was a timely reminder that culture doesn't need to be uniform to be aligned. It reaffirmed our belief that while we may operate independently, we can and must, thrive collectively.

Meaningful Progress Delivered

We've grown revenue by 13% overall, an increase of £2.1m, ending the full year with revenue of £18.3m (2024: £16.2m). We added £3.7m through acquisition and we have achieved a collective topline organic growth of 5% across our acquired business units. However, the decline in non-recurring product revenue in the Nettl Systems business, part of our Graphics & Ecommerce revenue segment where product and service revenue fell to £5.2m (2024: £6.8m), meant an overall organic decline in revenue of 9%.

Sometimes simplifying and becoming smaller is necessary to create a stronger foundation for future growth - and that's exactly the strategy for Nettl. While the decline in lower-margin, non-recurring revenue is clear, we expect Nettl's overall revenue to stabilise at around this year's level going forward. Importantly, a shift in revenue mix and a sharp focus on profitability have led to strong oEBITDA growth during the period.

The Group's recurring revenues for the year increased to £12.7m (2024: £9.2m), with 70% of total Group revenue now recurring compared to 57% in the prior year. This reflects the nature of the businesses we are bringing into the Group, which typically operate with a higher proportion of recurring revenues and at stronger Gross Margins. The impact of this evolving mix is evident in the improvement in Group Gross Margin to 72% (2024: 63%).

Whilst the Group experienced a decline in organic Group revenue as highlighted above, all of our business units grew profitably, meaning we have delivered 22% organic growth in oEBITDA. In addition, we added £1.3m of oEBITDA through our acquisitions. Therefore, our total oEBITDA increased by 71% to £4.8m (2024: £2.8m).

Our oEBITDA margin improved to 26% (2024: 17%). This has been driven by the profile of our newly acquired businesses and improvements in operational efficiency and cost control across the portfolio, which in turn means more of the organic revenue growth for each business unit drops to the bottom line.

aEBITDA increased by 88% to £3.2m (2024: £1.7m) after central administration costs of £1.6m (2024: £1.1m), resulting in an improved aEBITDA margin of 17% (2024: 10%) meeting our previously stated aim to exceed 15%.

We use several metrics to help improve and measure success within our portfolio. Our live dashboards operate like an 'engine diagnostic' system, focussing on three key areas, growth, profitability and efficiency. They help our teams identify areas requiring specific attention. Alongside financial metrics, we measure operational KPIs that allow our teams to spot and correct. KPIs such as - Churn rates, sales conversions, response times, NPS scores, Return on SaaS Employees ("ROSE") metrics and cost to serve ratios. Acting on them strengthens the customer journey at every stage-improving retention, conversion, and efficiency-all of which contribute to sustainable, organic revenue growth. These real-time indicators help our operating leaders stay close to the detail, driving continuous improvement without losing sight of the bigger picture.

Ultimately, the barometer of health is the measurement of year-on-year Recurring Revenue Growth % + oEBITDA %. Our Quality Score. By that measure, our portfolio of acquired business units are collectively at 41%. A slight improvement from last year's score of 40%. This shift, albeit a small one, demonstrates that our portfolio companies are maintaining strong profitability alongside their ability to grow sustainably. An improving Quality Score reinforces the strength of our operating model-focused on disciplined cost control, scalable platforms, and long-term value creation across the estate.

Our disciplined approach to acquisition, combined with strong underlying organic growth in oEBITDA, has driven meaningful improvements in our Operating ROCD, which rose to 24% (2024: 21%) and our overall ROCD, which rose to 16% (2024: 13%). These improvements have been underpinned by several factors including: high-margin recurring revenue growth from acquired VMS businesses; consistent cost discipline across the portfolio; and control of central costs as a proportion of our oEBITDA.

While OCFPS decreased to 0.5p (2024: 0.6p), this was due to the necessary and deliberate equity raise completed in September 2023 which had a full year effect on OCFPS for the first time in terms of the weighted average number of shares in FY25. The raise strengthened our balance sheet, increased our acquisition capacity, and positioned us to pursue opportunities that align with our disciplined investment criteria. The cash flow accretive nature of the businesses we acquire, coupled with continued operational improvements, will drive strong growth in OCFPS over the short term.

AI and the new landscape

Artificial Intelligence is rapidly reshaping the landscape for many businesses, bringing both significant opportunities and new challenges. It is changing at an extraordinary pace and no one yet has all the answers. What we do know from experience of dealing with fast past change is that you just have to start. Make decisions and try things, in full knowledge that you may have to adapt and adjust course. And so, we have started. Starting small and staying nimble. Implementing ways to harness the potential of AI across our Group, embedding intelligent automation and data-driven insights within our central functions, including M&A, finance, and reporting.

At the operating company level, integrating AI capabilities may not be appropriate for every platform, but for most it will. So where appropriate we're looking to enhance user experience, streamline customer support, and enable smarter, more predictive solutions for our customers in their respective verticals.

We plan to invest in upskilling our teams and to pilot targeted AI projects that can deliver meaningful improvements in operational efficiency, product innovation, and customer value. AI is not a silver bullet, and we will remain deliberate and pragmatic in its application-supporting our teams to use the technology confidently and responsibly, not as a replacement but as an enabler of better work.

In parallel, we factor AI maturity and risk exposure into our M&A processes. As we evaluate acquisition opportunities, it is becoming increasingly important to assess how target companies are positioned in relation to AI-whether they face disruption from emerging tools, whether their customer base may be eroded by automation, or conversely, whether they have AI-enhanced products that provide a competitive edge. As with all change, AI presents both risk and upside-and our goal is to ensure we are on the right side of that shift.

Current trading and outlook

 

Our new financial year began in April, and I'm pleased to report that trading continues to align with our internal forecasts. With the organic growth we've driven and the acquisitions we've added to the Group, on a run-rate basis, annualised revenue would be approximately £20m.

We have entered the new financial year with a strong pipeline of opportunities, meaningful financial headroom, and growing internal capability to execute transactions effectively and onboard them at pace. Alongside acquisitions, we remain committed to operational excellence within our existing businesses-driving organic growth, improving cash conversion, and supporting our teams to scale sustainably.

In closing, I would like to express my sincere thanks for your continued support and confidence in our Group's direction. I look forward to sharing further progress with you and to meeting you in person at our Annual General Meeting, which will be held a little earlier this year on Wednesday 3 September 2025. Thank you once again for being part of our journey.

 

 

Gavin Cockerill

Chief Executive Officer