TIDMGHT
RNS Number : 2531M
Gresham Technologies PLC
04 January 2019
RNS
4 January 2019
Gresham Technologies plc
Clareti contract signed and trading update
Gresham Technologies plc (LSE: "GHT", "Gresham" or the "Group"),
the leading software and services company that specialises in
providing real-time transaction control and enterprise data
integrity solutions, provides the following trading update for the
year ended 31 December 2018 ("FY 2018").
As noted at the time of the interim results and the trading
updates in October and December 2018, the Group's ability to win
and recognise revenue from a small number of competitive Clareti
opportunities, each carrying significant, immediately recognisable
license fees, before the end of the 2018 year-end was key to
achieving full year forecasts.
Of the significant deals within its pipeline, the Group is
pleased to confirm it has been selected for two strategic
high-value projects for its Clareti platform, further illustrating
the Board's view that there is a significant market opportunity for
the Clareti platform to replace legacy vendor solutions and become
the new industry standard for enterprise reconciliations in capital
markets.
In late 2018, following a competitive process, a leading global
investment bank selected the Clareti platform, together with one of
Gresham's strategic alliance partners, to deliver a reconciliations
managed service to replace legacy vendor technology and also
address new data integrity and control requirements across the
bank. The licence contract, the single largest in Gresham's
history, was signed on 31 December 2018 and becomes unconditional
on the signing of the partner's related services agreement now
expected to be executed in early 2019.
Also in December 2018, contract terms were finalised with
another global investment bank to migrate a legacy vendor
implementation to the Clareti platform, with the agreement now
expected to be executed in early 2019.
In light of these developments, the Company now expects to start
recognising revenue from both projects in early 2019 and
consequently has taken the opportunity to re-profile both
agreements on an annuity subscription basis in order to provide
higher levels of revenue visibility and earnings quality for future
years. The total software value of both agreements over a five-year
period is expected to be in excess of GBP7 million, of which GBP1.8
million is expected to be recognised in early 2019. Further details
on these projects will be provided in due course.
The delay in recognising revenue from these projects, and
specifically the lower than expected initial license fees secured
in the year, has negatively impacted FY 2018 results. The Group now
expects to report:
-- Group revenues for the year down 8% to GBP20.0 million*
-- Total Clareti revenues up 8% to GBP11.9 million*
-- Clareti Annualised Recurring Revenue** up 30% to GBP7.4 million
-- Other (non-Clareti) revenues down 24% to GBP8.1 million
-- Group adjusted EBITDA* down 83% to GBP0.8 million
-- The Group closed the year with cash at GBP5.3 million and remains debt free
*Includes a contribution of GBP0.7 million from the B2 Group
acquired on 4 July 2018.
**The Group's closing contracted annualised run-rate of
recurring Clareti revenues at 31 December 2018 is GBP7.4 million up
30% from GBP5.7 million at the end of the previous period. This
includes GBP1.1 million from B2 Group.
***Earnings Before Interest, Taxation, Depreciation and
Amortisation adjusted to add back share-based payment charges and
exceptional items.
The Group's financial position is expected to remain strong
throughout 2019 and beyond. The Board retains its confidence in the
market opportunity for its Clareti platform and once revenue from
the two deals expected imminently becomes recognisable, the Group's
annual recurring revenue run-rate ("ARR") is anticipated to improve
significantly to GBP8.8 million, from a 2018 closing ARR positon of
GBP7.4 million. Gresham's sub-contracting business exited 2018 with
a strong order book and is expected to grow positively in 2019,
whilst the Group's residual legacy software business continues to
steadily decline, as expected.
The Group anticipates that the results for FY 2018 will be
announced on 12 March 2019.
Ian Manocha, CEO, commented:
"We are delighted to have won major competitive bids with two of
the world's largest banks right at the end of the year, one of
which will become the Group's largest Clareti win in its history,
although we are naturally disappointed that timing issues have
negatively impacted our full year results.
We enter 2019 with a stronger Clareti recurring revenue base and
a focussed plan to build more predictable subscription-based
business. The investments that we made during 2018 have positioned
us well to capitalise on the opportunity in the market and we
remain confident in the profitable growth prospects of the
Group."
Enquiries
+44 (0) 207 653
Gresham Technologies plc 0200
Ian Manocha
Tom Mullan
+44 (0) 207 496
N+1 Singer (Joint Broker) 3000
Shaun Dobson / Lauren Kettle (Corporate Finance)
Tom Salvesen (Corporate Broking)
+44 (0) 207 894
Cantor Fitzgerald Europe (Joint Broker) 7000
Philip Davies
Catherine Leftley
Inside information
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
Note to editors
Gresham Technologies plc is a leading software and services
company that specialises in providing real-time data integrity and
control solutions. Listed on the main market of the London Stock
Exchange (GHT.L) and headquartered in the City of London, its
customers include some of the world's largest financial
institutions, all of whom are served locally from offices located
in Europe, North America and Asia Pacific.
Gresham's award-winning Clareti software platform has been
designed to provide financial institutions with complete certainty
in their data processing. Clareti is a highly flexible and fully
scalable platform for ensuring the integrity of data across an
enterprise. It is designed to address today's most challenging
financial control, risk management, data governance and regulatory
compliance problems.
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
TSTCKQDNDBKDADK
(END) Dow Jones Newswires
January 04, 2019 07:00 ET (12:00 GMT)
Gresham Technologies (LSE:GHT)
Historical Stock Chart
From Apr 2024 to May 2024
Gresham Technologies (LSE:GHT)
Historical Stock Chart
From May 2023 to May 2024
