Maintel : AGM and General Meetings Document

"In common with companies across the globe, 2020 presented a challenge like no other to our customers, our staff and our company. So many organisations in both the public and private sectors depended on Maintel to keep their mission critical operations functioning. In the public sector that includes front line hospital trusts, police control rooms, fire services, care home operators, local authorities, government agencies and social housing providers - and in the private sector financial services organisations, high street household name retailers and utility organisations, providing critical national infrastructure services.

I am immensely proud of the role that Maintel has played in supporting our customers during the pandemic, and of the fantastic response from our colleagues who made the transition to remote working while continuing to work incredibly hard to ensure that our customers could do the same. Worthy of special recognition is our field-based engineering team who continued to provide onsite technical support, in particular to NHS Trusts, throughout the pandemic.

As a result of the pandemic we have understandably seen certain customers delay new orders to preserve cash flows whilst uncertainty around the macroeconomic outlook remained. Furthermore, certain project work was delayed due to difficulties with site access during the lockdowns. Inevitably this had a significant impact on both revenue and EBITDA in the period. Revenue was also affected by the full year impact of the loss of several

legacy contracts in 2019 within our channel partner network, as previously announced.

Notwithstanding these challenges, the business achieved a huge amount during the period, with the meeting of KPIs such as reaching over 100,000 cloud seats, showing a positive momentum in line with our new strategy. We continued to invest in the Group's transformation to a cloud first business, launching four significant new product sets and undertaking a significant restructure from the Board down.

As a result of the restructure, a process which commenced prior to the pandemic but which we accelerated as

a consequence of it, we have achieved a significant, underlying annualised reduction in OPEX of £3m and a business which is leaner, stronger, more efficient and better positioned to take advantage of the opportunities available and changing customer requirements.

This year has started promisingly and in line with management's expectations; we enter the second half of the year with a healthy orderbook. We have continued to simplify the business and focus on our cloud offering, announcing the sale of the Managed Print Service business in March, the proceeds of which have been used to reduce net debt.

I firmly believe that the business is in a strong position to deliver organic growth on a like for like basis in both revenue and EBITDA in FY 2021."

The combined impact of the pandemic and the lower managed services support base entering the year resulted in a 13% reduction in Group revenue to £106.4m and a consequent 20% reduction in adjusted EBITDA. The lower EBITDA margin was driven by the significant reduction in higher margin technology revenue in the period as project work was delayed as customers sought to preserve cash. Adjusted earnings per share decreased 39% to 31.9p with a basic loss per share of 12.1p. The period-end net debt position showed a significant reduction to £22.3m.

Our managed support base saw a reduction in revenue of 17% to £35.6m, predominantly due to contract losses already announced in 2019 but only fully realised in 2020. There was in addition some price erosion and substitution as customers migrated to cloud. Our technology division revenues were the hardest hit by the pandemic with a reduction of 23% to £29m.

The number of subscribers on our ICON and public cloud platforms increased by 31% to a record 102,000 (2019: 78,000) with revenue from cloud and software customers now totalling £27.2m, accounting for 26% of Group revenue. The revenue benefit from the additional contracted seats will be realised in 2021 and beyond as these roll out.

Our new CEO, who joined us in October 2019, has delivered a significant restructuring of the Group including the senior executive team. This has reduced headcount by 6%, removing £3m of annualised costs. The new structure is more efficient, aligned to our key verticals and well positioned to capitalise on the investments which we have continued to make in our product portfolio and intellectual property.

We were grateful for the support of the Government through the difficult stages of the pandemic, using the furlough scheme to retain key staff for whom on-⁜premise project work was simply not available for periods of the year. We also deferred the payment of VAT in Q2 2020 (due to be paid in full by February 2022) and took advantage of the CLBILS scheme as part of the refinancing agreement we concluded in May 2020.

I am pleased to be able to report that our rejuvenated sales team reached its sales target in the fourth quarter for the first time in several quarters, and that order intake post period end in 2021 has been strong. Given the continuing economic uncertainty, the Board is not recommending a dividend at this stage and will review this decision later in the year.

Following the announcement that Annette Nabavi has decided to retire as a non-executive director following this year's Annual General Meeting, I would like to thank Annette for her significant contribution to Maintel over the past 7 years. We wish her all the very best in her future ventures.

Maintel is proud of its engagement in the front line of pandemic response, and the Board is immensely grateful to our staff who have worked so tirelessly in difficult and unusual circumstances this year. We remain confident in the new leadership team's plan to re-engineer and build the Group for a cloud-first world and in our return to organic growth.

John Booth

Chairman

1 June 2021