TIDMDOTD
RNS Number : 6955N
dotDigital Group plc
22 January 2019
dotdigital Group plc
("dotdigital" or the "Company")
Trading Update and Notice of Half Year Results
Organic growth underpinned by strategy
dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of
an omnichannel marketing automation platform, announces a trading
update ahead of the Company's half year results for the six months
ended 31 December 2018 ("H1 2019").
The trading performance reported in this statement is based on
unaudited management accounts.
Financial highlights
-- Group revenue up by 33% to GBP24.9m (H1 2018: GBP18.8m)
-- Organic revenue up by 15% to GBP20.1m (H1 2018: GBP17.5m)
-- Adjusted EBITDA(1) in line with market expectations: the core
business has outperformed although tempered by a shortfall in
Comapi's(2) revenues, which is a lower margin business, primarily
driven by challenging retail market conditions
-- Cash balance at 31 December 2018 of GBP16.6m up 58% (H1 2018: GBP10.5m)
-- ARPU(3) up by 16% to GBP876 per month (H1 2018: GBP757 per
month) driven by an increase in existing client spend and new
customers
-- Following approval at the AGM on 18 December 2018, a final
dividend of 0.64 pence per ordinary share (up by 16%) for the year
ended 30 June 2018 will be paid on 31 January 2019 to those
shareholders on the register on 11 January 2019 (FY17 final
dividend: 0.55 pence per ordinary share)
Operational highlights
Product innovation
-- Further integration of functionality into the Engagement
Cloud platform, significantly advancing progress toward offering a
fully integrated omni-channel customer engagement platform
-- Launched new artificial intelligence and machine learning
features for ecommerce merchants enabling customers to drive
additional ROI from their marketing
-- Introduced customer-led, GDPR marketing functionality driving
enhanced, end-customer engagement
-- New real time reporting for our Communication Platform as a
Service (CPaaS) customers and the ability to integrate to Twitter's
direct messaging platform
-- R&D continues to underpin dotdigital's growth strategy
with functionality recurring revenues growing by 50% to GBP5.7m
from GBP3.8m in the period
-- Core business SMS volume was up over 100% in the period
Geographic expansion
-- International sales represented 30% of total sales (excluding
Comapi), up from 25% in the comparative period
-- Organic international revenue up by 37% to GBP6.0m (H1 2018: GBP4.4m)
-- Core EMEA business continued to grow double digit at
approximately 10% despite the introduction of GDPR in May, Brexit
uncertainties and reduced retail consumer spend
-- Revenue from the US region grew organically by approximately
30% to $4.3m, (H1 2018: $3.3m) driven by Channel partners and
system integrators for Magento and Shopify
-- APAC sales, Channel team expansion and Channel partners drove
revenue from the region, which grew organically by approximately
80% to AUS$1.6m, (H1 2018: AUS$0.9m)
Strategic partnerships
-- Deeper integration into the Magento commerce platform
provides further scalability, and includes support for split
databases, a key requirement for Adobe customers
-- Strengthened our joint proposition with Shopify:
o providing a seamless approach to merchants' process automation
across commerce and marketing platforms
o improved personalisation of automated push notifications
-- Revenue from the new connectors (Shopify, Big Commerce and
Shopware) grew 372% albeit from a small base to GBP1m in the 6
months. The company is seeing a strong pipeline building on these
connectors.
-- Sales through strategic partners increased by 43% to GBP10.3m (H1 2018: GBP7.2m);
-- dotdigital named as Big Commerce's first Global Elite partner in Europe.
Notice of 2019 half year results
dotdigital Group plc will announce its Half Year results for the
period ending 31 December 2018 on 19 February 2019.
Milan Patel, CEO of dotdigital, commented:
"Last week we rebranded dotmailer to the dotdigital Engagement
Cloud, which reflects the integrated global company that we are
today. We see customer engagement as the future of marketing
automation and an omnichannel offering as the conduit.
"I am pleased to report strong growth in our core business as we
continue to win market share, despite a challenging retail backdrop
in H1 2019. However, revenues from our Comapi operations were
impacted by external factors, primarily due to a few of our large
household name, retail customers going into administration and some
minor slippage in volumes, as a consequence of retail sector
weakness. Despite this, Group profits remain in line with market
expectations, as Comapi is a c.10% operating margin business.
"Notwithstanding short-term headwinds, the rationale for the
acquisition of Comapi was to provide an industry leading solution
offering fully integrated omni-channel and conversational commerce
support to marketers and we are pleased to report that Comapi has
been fully integrated into dotdigital's Engagement Cloud. As a
result, we are beginning to see a good pipeline of growth and sales
building from additional channels.
"Elsewhere during the period our strategic partnerships have
moved forward as we have strengthened our relationships with
Magento, Shopify and Microsoft. These partnerships continue to
increase our addressable market in all our regions and it is
pleasing to see new connectors were added, building strong
recurring revenues.
"Alongside our organic growth strategy, we will continue to look
for acquisitions that are either earnings enhancing or strategic in
nature which can add to platform capabilities or assist us with
market share and people in geographic territories that are
strategic to us.
"I look forward to providing more detail of our results and
plans at our half year results for the six months to 31 December
2018, which will be announced on 19 February 2019."
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO
CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE
MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.
(1) Consensus adjusted EBITDA as at 21 January 2019, for the
year ending 30 June 2019, is approx. GBP16.2 million. EBITDA means
earnings before interest, tax, depreciation, amortisation, and
before restructuring, other non-recurring costs and certain
non-cash items.
(2) Comapi was acquired in November 2017
(3) ARPU means average revenue per user/customer
For further information please contact:
dotdigital Group Plc Tel: 020 3770 1502
Milan Patel, CEO
Paraag Amin, CFO
FTI Consulting (Financial PR and Investor Tel: 020 3727 1000
Relations)
Matt Dixon
Adam Davidson
N+1 Singer (Nominated Adviser and Joint Tel: 020 7496 3000
Broker)
Shaun Dobson, Head of Corporate Finance
Alex Bond, Corporate Finance
finnCap (Joint Broker) Tel: 020 7220 0500
Stuart Andrews, Corporate Finance
Rhys Williams, Sales
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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