Karnetic Limited

The directors present their strategic report for the year ended 30th June 2025. Fair review of the business Karnetic’s management team continues to monitor, explore trends and uncertainties surrounding the diagnostic transition to more complex vehicles and security barriers to accessing these systems. Karnetic’s strategic outlook is of course governed by developments within Autel’s product line, but Karnetic continues to give valuable insight to help guide product development. Autel actively consults its channel to assist with assessment of scenarios to explore the implications of differing product developments and deliverable. Ultimately both Karnetic and Autel are governed by the vehicles and systems development by manufacturers, but making correct a judgment and assumption when reviewing product development is essential to ensure the most commercial viable product plus solutions sit within the Autel offerings. This ensures Autel product stay at the front of market and offer more compelling solutions than its competitors. We see three scenarios play out together. Firstly, Autel products are now integrating AI components and a deep data platform is being designed to enable costed cloud API access. As vehicle complexity for vehicles increases, the tools themselves are being designed to allow the technician to carry out with many tasks simply by voice command. Secondly for more complex tasks that require manual/physical intervention, then there is a drive towards pictorial guidance and vectoring, and away from text driven instructions that are harder to understand with complex systems. Thirdly, these developments have to be framed within an array of propulsions technologies, from ICE, the 3 variants of Hybrid power trains, EV and finally the emergence of hydrogen. Autel and Karnetic is positioned for the move, and Karnetic’s investment in its new technical support team, together with in-house training and new online resource strongly underpins this direction on travel. The directors regularly review and discuss key performance indicators summarised below and when required take the necessary corrective actions. The company's key financial and other performance indicators during the year were as follows: 2025 2024 Turnover £14,278,569 £11,782,100 Turnover growth 21% 8% Gross margin 42% 44% Operating profit £4,178,214 £3,800,699 EBITDA £4,215,685 £3,829,066 Closing cash position £1,495,611 £1,920,290 Principal risks and uncertainties We use these three scenario’s to help inform our strategy, manage our investment decision making and manage risk (such as the internal team training). Whilst these developments are responses to manufacture development and policy, Autel’s migration to a global diagnostic leader is now closely tied with solid manufacturer interaction. The use of these scenarios, and those we observe from other organisations aids our understanding of the diagnostic transition and helps us consider the outcome of these strategies. The purposes is of course for the management team to create a robust and resilient business, in a time where we face uncertainty, and where vehicle manufacturers are currently showing market distress. We will continue to position the business, with the aim of taking advantage of this uncertainty.