Tialis Essential IT (LON: TIA), the AIM-listed IT managed services provider, reported a sharp fall in first-half revenue and profit earlier today, as delayed customer orders and the early insourcing of two contracts hit the top line.
Shares in the Edinburgh-based company closed at 48p yesterday, the last recorded price ahead of the results, against a 52-week range of roughly 28p to 113p. No post-results trade had yet been captured in the market at the time of writing.
Revenue for the six months to 30 June fell to £7.6m from £8.8m a year earlier, while adjusted EBITDA, profit before interest, tax, depreciation and one-off items, roughly halved to £0.6m from £1.0m. The company said the decline stemmed from delayed customer orders and two contracts being insourced, brought back in-house by the customer, earlier than expected.
Despite the profit drop, gross margin held at 29%, unchanged from H1 2025. The group repaid £0.65m of bank borrowings, cutting net bank borrowings to £2.36m from £3.5m, and grew operating cash generation 76% to £0.5m from £0.3m, while the loss per share narrowed to 1.01p from 3.63p. Tialis breached its leverage covenant at 30 September and 31 December 2025 before an amended covenant took effect from 31 March 2026; the group says it was fully compliant at 30 June 2026. The 50%-owned MXLG joint venture returned to profit, contributing £807k of EBITDA. Tialis is also pushing ahead with a capital restructuring to cancel its share premium account and extinguish deferred shares, creating distributable reserves.
“Whilst first half revenues were impacted by delayed customer orders and the earlier than expected insourcing of two customer contracts, the Group continued to generate positive operating cash flow and further reduced its debt position. We enter the second half of the year with a strong sales pipeline and remain confident in the Group’s prospects,” said Peter Hallett, interim non-executive chairman of Tialis Essential IT.
The company said its sales pipeline stands at around £8m in annual contract value, with new business wins for the year in line with budget. The shares have fallen from a September 2025 high of around 113p, a level reached only briefly in an isolated spike, to 48p, a decline this update has not yet reversed, leaving H2 pipeline conversion as the key test of whether the stabilisation in cash flow and debt translates into a turnaround in trading.