TIDMTPX
RNS Number : 1487Q
TPXimpact Holdings PLC
16 October 2023
16 October 2023
TPXimpact Holdings PLC
("TPX", "TPXimpact", or the "Company")
First Half Trading Update & Disposal of TPXimpact Norway
Strong first half trading in line with expectations; full year
targets reiterated
TPXimpact Holdings PLC (AIM: TPX), the technology-enabled
services company focused on people-powered digital transformation,
is pleased to provide an update on its first half trading for the
period ended 30 September 2023 ("H124") and announce the disposal
of TPXimpact Norway AS.
First Half Trading
The Group's strong trading performance in H124 has been
encouraging and in line with management expectations. The Board
expects to report first-half revenues of GBP41-42 million which
would equate to like-for-like(1) revenue growth of around 20% for
H124. Like-for-like(1) Adjusted EBITDA margins are expected to
increase to 4-5% in H124 from less than 3% in H123.
New business wins in H124 amounted to GBP105 million and the
pipeline for new business remains robust. Net debt (excluding lease
liabilities) was c. GBP13 million at 30 September 2023 (compared
with GBP17.9 million at 30 June 2023) and the Company has
comfortably satisfied its H124 banking covenants.
The Board expects to release the Group's interim results for
H124 in early December 2023 and will provide more detail in due
course.
Outlook
The Board reaffirms its FY24 targets of 15-20% like-for-like(1)
revenue growth and Adjusted EBITDA margins of 5-6%. These targets
would equate to FY24 revenue in the range of GBP80-85 million and
Adjusted EBITDA in the range of GBP4-5 million. Management are
targeting net debt (excluding lease liabilities) to be in the range
of GBP11-12 million at 31 March 2024 and, therefore, a net debt to
Adjusted EBITDA ratio of <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.
(1) Like-for-like performance excludes the Questers business
(sold on 15 September 2023) and TPXimpact Norway (sold on 13
October 2023) from H124 results and FY24 targets and comparative
figures.
Disposal of TPXimpact Norway AS
The Board has assessed the prospects of the TPXimpact Norway
business and concluded it is unlikely to contribute to the Group's
targets for revenue growth and margin improvement, in part due to a
lack of scale that introduces elevated risk in the event key
clients or staff are lost. The Group has therefore disposed of its
equity interests in TPXimpact Norway AS to companies controlled by
the following managing partners of TPXimpact Norway AS: Anders Rygh
(ARygh Holding AS), Geir Ødegård (Produco Invest 1 AS ) and Lars
Christian Torhaug (T5 Invest AS) for a nominal consideration of
GBP1.00. This disposal is considered a related party transaction
and the directors consider, having consulted with its nominated
adviser, that the terms of the transaction are fair and reasonable
insofar as its shareholders are concerned.
The disposal further reinforces the Board's strategy to simplify
the business and focus the Company on its core strengths of Digital
Transformation and Digital Experience in the UK, whilst de-risking
the Group's future performance.
TPXimpact Norway has 12 employees who provide strategic
consulting services to local clients in Norway. For the year ended
31 March 2023, TPXimpact Norway generated GBP2.0m of revenue,
GBP0.2m of Adjusted EBITDA and GBP0.2m of profit after tax. Gross
assets as at 31 March 2023 were GBP2.7m (including GBP1.9m of
goodwill and intangible assets).
Björn Conway, Chief Executive Officer at TPXimpact, said:
"I am pleased by the progress we have made in the first half of
the financial year in executing our strategy and three-year plan.
Trading has improved and we are beginning to achieve efficiencies
across the Group and capitalise on the sizeable market opportunity
available to the Group.
The disposal of TPXimpact Norway, as well as the recent sale of
Questers for GBP7.5 million, is firmly aligned with our 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."
- Ends -
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018.
The person responsible for this announcement is Steve Winters,
Group CFO.
Enquiries:
TPXimpact Holdings PLC Via Alma PR
Bjorn Conway, Group CEO
Steve Winters, Group CFO
Stifel Nicolaus Europe Limited +44 (0) 207 710 7600
(Nomad and Joint Broker)
Fred Walsh
Ben Burnett
Dowgate Capital Limited
(Joint Broker)
James Serjeant
Russell Cook +44 (0) 203 903 7715
Alma PR +44 (0) 203 405 0209
(Financial PR) tpx@almapr.co.uk
Josh Royston
Kieran Breheny
Matthew Young
About TPXimpact
TPXimpact exists to transform the organisations, services and
systems that underpin society and that drive business success. It
applies strategic and creative thinking, technology, innovative
design and user-centred approaches to bring about numerous
improvements which together multiply the impact of change.
The Company works closely with its clients in agile,
multidisciplinary teams that span organisational design,
technology, and digital experiences. It shares a deep understanding
of people and behaviours and a philosophy of putting people and
communities at the heart of every transformation.
The business is being increasingly recognised as a leading
alternative digital transformation provider to the UK public
services sector, with 72% of its client base representing the
public sector and 28% representing the commercial sector in the
year ended 31 March 2023.
More information is available at www.tpximpact.com .
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END
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