TIDMTPX
RNS Number : 6810M
TPXimpact Holdings PLC
18 September 2023
18 September 2023
TPXimpact Holdings PLC
("TPXimpact", "TPX" or the "Company")
Sale of Questers for GBP7.5m
Reinforces strategic focus on core businesses
FY24 and FY25 forecasts unchanged for revenue growth and EBITDA
margins
TPXimpact Holdings PLC (AIM: TPX), the technology-enabled
services company focused on people-powered transformation,
announces that it has completed the sale of Questers Resourcing
Limited and Questers Bulgaria EOOD ("Questers") to pwrteams OÜ, the
outsourcing and team augmentation business owned by Nortal AS
("Nortal"), for cash consideration of GBP7.5m.
Questers is based in Sofia, Bulgaria and has around 300
employees who provide cross-border IT support and related services
to the commercial sector. For the year ended 31 March 2023,
Questers generated GBP13.1m of revenue and GBP1.3m of Adjusted
EBITDA. Gross assets as at 31 March were GBP7.6m.
Strategic rationale
The Board has a clear strategy to focus the Company on its core
strengths of Digital Transformation and Digital Experience and has
concluded that Questers' offering is no longer core to this
strategy. The Board also believes that fresh ownership, under
Nortal, will be better placed to take Questers to the next level of
its development.
Proceeds and debt covenants
TPXimpact has disposed of the entirety of its equity interests
in Questers for cash consideration of GBP7.5m. Of this amount, up
to GBP5.0m will be used to repay borrowings, with the remainder
used to fund investment and growth in our core capabilities.
Management are therefore targeting net debt (excluding lease
liabilities) to be in the range of GBP11m to GBP12m at 31 March
2024, compared with GBP17.9m at 30 June 2023.
The Group's banking covenants require minimum cash liquidity
levels on a monthly basis and minimum Adjusted EBITDA performance
levels on a quarterly basis. The Group's bankers have agreed to
revise the Adjusted EBITDA levels in these requirements, to allow
for the deconsolidation of Questers from the Group's results.
Current trading and forward guidance
Current trading (excluding Questers) remains in line with budget
and management expectations. The Board reiterates the FY24 targets
of 15-20% like-for-like revenue growth and Adjusted EBITDA margins
of 5-6%. These targets would equate to FY24 revenue in the range of
GBP81m to GBP85m and Adjusted EBITDA in the range of GBP4m to
GBP5m. Management therefore expect the net debt to Adjusted EBITDA
ratio to return to < 2.5x by the end of the financial year, or
shortly thereafter.
The outlook for FY25 is also maintained with like-for-like
revenue growth of 10-15% and further margin improvement of 2-3% on
top of that achieved in FY24.
Björn Conway, Chief Executive Officer at TPXimpact, said:
"At our preliminary results in July 2023, we set out a three
year plan to ensure we continue to drive efficiencies across the
Group and capitalise on the sizeable market opportunity ahead.
Today's announcement firmly aligns with this strategic vision for
TPXimpact by enabling us to concentrate our resources and energies
around those prospects within the UK public sector and broader
digital transformation market where there is considerable scope for
further growth.
I would like to thank all our colleagues at Questers for the
important work they have contributed to the Group over the past
five years, and I am confident Nortal represents an excellent fit
for the business going forward."
Priit Almae, Chief Executive Officer at Nortal AS said:
" The Questers acquisition strengthens our pwrteams business
that is focused on building dedicated cross-border teams for our
customers. The acquisition will add market presence in the US and
UK and complement our strong organic double-digit growth over the
last 5 years. I am glad to welcome the 300+ new colleagues into our
team . "
Enquiries:
TPXimpact Holdings Via Alma PR
Björn Conway, CEO
Steve Winters, CFO
Stifel Nicolaus Europe Limited
(Nomad and Joint Broker)
Fred Walsh
Ben Burnett +44 (0) 207 710 7600
Dowgate Capital Limited
(Joint Broker)
James Serjeant
David Poutney +44 (0) 203 903 7715
Alma PR tpx@almapr.co.uk
(Financial PR) +44 (0) 203 405 0209
Josh Royston
Kieran Breheny
Matthew Young
About TPXimpact
We believe in a world enriched by people-powered digital
transformation. Working together in close collaboration, we want to
help our clients reimagine their organisations, services and
experiences to accelerate positive change and build a future where
people, places and the planet are supported to thrive.
Led by passionate people, we care deeply about the work we do
and the impact we have in the world. Working alongside our clients
teams, we work to understand their unique challenges and find new
ways forward together; challenging assumptions, testing new
approaches and building capabilities, leaving them with the tools,
the insight and the confidence to continue iterating and
innovating.
Combining rich heritage and expertise in human-centred design,
data, experience and technology, we bring over 15 years experience
across the public, private and third sectors, creating sustainable
solutions with the flexibility to learn, evolve and change.
The business is being increasingly recognised as a leading
alternative digital transformation provider to the UK public
services sector, with c.72% of its client base representing the
public sector and c.28% representing the commercial sector.
More information is available at www.tpximpact.com .
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END
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