Blancco Technology Group PLC Trading Update and Notice of Results (3298C)
January 19 2018 - 1:00AM
UK Regulatory
TIDMBLTG
RNS Number : 3298C
Blancco Technology Group PLC
19 January 2018
Friday 19 January 2018
BLANCCO TECHNOLOGY GROUP PLC
("Blancco" the "Company" or the "Group")
TRADING UPDATE AND NOTICE OF RESULTS
Blancco Technology Group PLC (AIM: BLTG, "Blancco"), a leading
global provider of mobile device diagnostics and secure data
erasure solutions, today issues this trading update for the six
months to 31 December 2017, in advance of its half yearly results
which will be announced on 20 March 2018.
During the six months to the end of December 2017 significant
management time and effort was focused on the immediate priorities
required to place Blancco on the best operational and financial
footing following the resignation of the CEO and the review of the
accounting for contracts and financial controls.
Revenue in the first half of the current financial year was
marginally behind that of the same period last year, but we expect
trading to grow during the second half leading to positive full
year revenue growth. The impact of currency has been slightly
adverse following the strengthening of Sterling.
Results for the six months to 31 December 2016 included a number
of non-repeating volume sales deals, where revenue was recognised
up front on the sale of software covering multiple future years.
Several of these replaced deals previously contracted and
recognised over time on a monthly basis. These were not due for
renewal during December 2017 impacting Blancco's comparative year
on year revenue and the contract renewal rate. New client contracts
won during the current period did not fully mitigate the impact of
last year's non-repeating deals.
Overall the Group's Erasure division saw a decline in year on
year sales due to the non-renewal of multiyear End of Life Erasure
contracts as mentioned above. Mobile Erasure saw a substantial
growth rate as we secured numerous new clients.
The Group's Mobile Diagnostics division, remained flat, in line
with management's expectations for the first half.
As we expected, Adjusted Operating Profit (AOP) was lower than
in the prior year, due to the lower revenue and the significant
SG&A costs taken on during Q2 and Q3 of the prior year flowing
through the first half this year. Adjusted Operating Profit margin
percentage was lower than full year guidance, but was better than
our first half expectations, following the reorganisation and cost
savings made between September and December 2017.
We now expect full year revenues to be towards the lower end of
our guidance range while AOP and cashflow remain in line.
During the period we also negotiated the sale of our Mexican
legal entity, which will become a distributor of Blancco products
in the LATAM region, consequently we have reclassified the results
of the Mexican business as discontinued and treated them
appropriately in the current and prior financial periods. We
believe that this structure will benefit both parties to the
transaction and promote the growth of Blancco services in the
region.
Payments related to the restructuring of the management team and
a legacy payment relating to prior year M&A have reduced cash
balances since the financial year end, however, the Group's
operating cash flow before interest and tax remains positive.
The CEO recruitment process is progressing well and we will
update the market at the appropriate time.
The Board is confident that we have considerably improved the
functioning of the business, which stands Blancco in much better
stead for the new CEO to execute a sustainable growth strategy,
allowing the Group to leverage its market leading position and take
advantage of growing demand.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/ 2014.
Blancco Technology Group Plc +44 (0) 20 3657 7000
Simon Herrick, Interim Chief Executive Officer & Chief
Financial Officer
Peel Hunt LLP (Nominated Adviser and Broker) +44 (0) 20 7418 8900
Edward Knight
Nick Prowting
Panmure Gordon (UK) Limited (Joint Broker) +44 (0) 20 7886 2500
Dominic Morley, Corporate Finance
Charles Leigh Pemberton, Corporate Broking
Tulchan Communications +44 (0) 20 7353 4200
Tom Murray
Matt Low
About Blancco
Blancco Technology Group is a leading global provider of mobile
device diagnostics and secure data erasure solutions. For more
information, please visit www.blanccotechnologygroup.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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