REG - dotDigital Group plc - Interim Results
07/03/2023 07:00
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RNS Number : 0746S dotDigital Group plc 07 March 2023
7 March 2023
Dotdigital Group plc
("Dotdigital" or the "Group")
Interim results for the six months ended 31 December 2022
Dotdigital Group plc (AIM: DOTD), the leading SaaS provider of an omnichannel
marketing automation and customer engagement platform, announces its unaudited
interim results for the six months ended 31 December 2022 ("H1 2023").
Financial Highlights
· Group revenue increased 9% to £33.8m (H1 2022: £30.9m)
· Recurring revenue as a percentage of total revenue increased to 95% (H1 2022:
94%). Contracted recurring represents 79% of total revenue
· ARPC(1) up by 11% to £1,573 per month (H1 2022: £1,422 per month)
· Adjusted EBITDA(2) of £11.1m (H1 2022: £12.2m) and adjusted operating
profit(3) of £7.5m (H1 2022: £8.9m), in line with expectations and
reflecting planned investment in the team
· Strengthening cash position with net cash balance of £49.6m on 31 December
2022 (H1 2022: £40.0m)
Operational Highlights
· International revenue of £11.5m (H1 2022: £9.7m), representing 34% to total
revenue (H1 2022: 31%)
· R&D continues to unlock incremental growth opportunities, with recurring
revenues from enhanced product functionality increasing 13% to £12.2m (H1
2022: £10.8m)
· Ongoing product innovation to enhance the Group's Customer Experience &
Data Platform (CXDP), with a focus on predictive analytics and real time
automation functionality
· Email marketing remains core alongside omnichannel uptake, with email volume
growth of 13% and SMS volume growth of 18% in the period
· Strengthening of strategic partnerships in both ecommerce and CRM, with sales
through connectors increasing by 17% to £16.3m (H1 2022: £13.9m)
· Ongoing planned investment in personnel and business infrastructure to support
continued growth
· Growing new business pipeline, including higher value deals, with trading at
the start of H2 tracking in line with expectations
Milan Patel, CEO of Dotdigital, commented:
"We are pleased to report another period of profitable growth and execution in
line with our strategy, as we begin to realise the benefits of our
strengthened operations functions following investment in the prior period.
"Organisations across industries are depending, more than ever, on driving
higher engagement across their customer bases to support growth and loyalty.
Our technology sits at the heart of this, with digital engagement tools
underpinned by rich data that provide insights into the value and impact of
marketing spend throughout the customer journey.
"We enter the second half of the year with a stronger pipeline of
opportunities, supported by a profitable, cash generative business model and
increasing recurring revenues. Whilst we remain mindful of macroeconomic
uncertainty, the strength of our value proposition, expertise across sectors
and expanding addressable market give us confidence in meeting market
expectations."
Live presentation to investors: Management will host a live presentation to
investors via the Investor Meet Company platform on Thursday, 9 March at 10.00
a.m. UK time. Investors who already follow Dotdigital on the platform will
automatically be invited, others are invited to register in advance via the
following link:
https://www.investormeetcompany.com/dotdigital-group-plc/register-investor
(https://www.investormeetcompany.com/dotdigital-group-plc/register-investor) .
Notes
1. ARPC means Average Revenue Per Customer (including new customers added
in period and existing customers)
2. Adjusted EBITDA is earnings before interest, tax, depreciation and
amortization adjusted for acquisition costs and share-based payments
3. Adjusted operating profit is operating profit adjusted for acquisition
costs and share-based payments
For further information please contact:
Dotdigital Group Plc Tel: 020 3953 3072
Milan Patel, CEO
Alistair Gurney, CFO investorrelations@dotdigital.com
Alma PR (Financial PR) Tel: 020 3405 0210
Hilary Buchanan dotdigital@almapr.co.uk
David Ison
Kieran Breheny
Canaccord Genuity (Nominated Advisor and Joint Broker) Tel: 020 7523 8000
Bobbie Hilliam, Corporate Finance
Jonathan Barr, Sales
finnCap (Joint Broker) Tel: 020 7220 0500
Jonny Franklin Adams, Corporate Finance
Alice Lane, ECM
Singer Capital Markets (Joint Broker) Tel: 020 7496 3000
Shaun Dobson, Corporate Finance
Alex Bond, Corporate Finance
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.
OPERATIONAL REVIEW
The Group made good progress over the first half of the year, in line with
management expectations. The operational building blocks put in place in the
second half of the prior year have started to yield results with evidence of
increasing commercial momentum across the Group.
The Group delivered revenue growth of 9% to £33.8m (H1 2022: £30.9m) driven
by improved customer retention and increasing revenue per customer, together
with new customer wins and favourable FX movements. As expected, adjusted
EBITDA was £11.1m (H1 2022: £12.2m), reflecting planned headcount growth of
c. 45 people through the period and wage increases which were weighted to the
start of the financial year, compared to a more gradual distribution of cost
growth through the prior year. Cash generation continues to be strong, and the
Group ended the period with a net cash balance of £49.6m.
The investments made to solidify the Group's global operations, from Sales to
Customer Success and Partner Management teams, along with continued positive
trading, have enabled the leadership team to renew their focus on the Group's
growth opportunities. Overall, the Group has seen an improving environment to
attract and retain talent as competitors pause to reflect on previous hiring
initiatives. There is a refreshed sense of optimism and momentum internally
with our teams energised around our growth plans.
Within the current economic climate, we are seeing organisations across
industries assessing how to attract and retain customers whilst optimising
their technology stacks to drive efficiency and cost savings. Dotdigital's
platform, which offers clear, demonstrable ROI coupled with easy-to-use
functionality and straightforward onboarding processes, is a compelling
proposition. The Group continues to grow market share and cement its
reputation across territories, evidenced by a growing pipeline, particularly
within larger enterprises.
Marketeers at some of the world's biggest international brands rely on
Dotdigital to power their campaigns. Along with continued strength in the
ecommerce space, the Group has seen growing interest in sectors such as not
for profit, utilities, financial services, construction, media and
healthcare. New customers won during the period include Chartered Institute
for the Management of Sport and Physical Activity, Shell Energy UK, Leeds
Building Society, Galliford Try and CBRE.
Looking ahead, the Group is well positioned to capitalise on the market
opportunity, with strengthened foundations across its three operating regions
underpinned by a resilient, profitable SaaS business model. With high levels
of recurring revenue and strong cash generation, the Board has the flexibility
to continue investing in the organic and inorganic growth opportunity.
Market
Digital marketing continues to be the priority for organisations. According to
the 2022 CMO Survey, digital marketing spending has accelerated since it was
first measured in February 2021 (+11.5%) to a high in February 2022 (+20.2%),
resulting in digital marketing investments accounting for 57.9% of marketing
budgets.
According to the survey, 59% of Marketeers listed martech as one of their top
digital marketing investments. A 2022 study by Gartner reported Marketeers
planned to spend 25.4% of their marketing budget on martech in 2022, while the
2023 Deloitte Global Marketing Trends executive survey found 'Accelerating the
move to new digital technologies/platforms' to be the number one priority for
Chief Marketing Officers.
Within this, there is a growing expectation and requirement for increasingly
sophisticated tools that allow for more personalised and targeted campaigns
based on rich customer data. This holistic view of the full customer journey
is what drives the Group's technology roadmap for Customer Experience &
Data Platform (CXDP). In an October 2022 survey of B2B marketers carried out
by Chief Marketer/OneTrust, the top three martech investment targets were
content creation, analytics and automation, validating our direction of
travel. With a wider backdrop characterised by economic uncertainty, we are
seeing a heightened focus on optimisation and cost effectiveness as well as
customer loyalty. Within this framework, email marketing remains the primary
channel for customer engagement, still providing the highest return on
investment. During the period, we saw email marketing volumes increase 13%.
Alongside this, demand for omnichannel continues to grow, as organisations
aspire to increase the number of touchpoints with customers all from one
platform. For instance, according to Airship's Push notification Benchmark
report, 51% of iOS users and 81% of Android users are opted-in to receive
'push' notifications, offering a potentially valuable complementary engagement
channel for organisations.
Strategy
The Group is guided by a consistent and focused growth strategy, centred on
three strategic pillars: international diversification, product innovation,
and building on our strategic partnership relationships.
Geographic expansion
Regional breakdown reported in local currency
The Group's largest and most established market, EMEA, grew 7% to £25.3m (H1
2022: £23.6m) following continued strong underlying demand. The pipeline of
higher value deals continues to trend upward as enterprises focus on
technology rationalisation towards best-in-breed solutions with comprehensive
functionality. The Group's growth in the region was somewhat tempered by a
lower level of one-off professional services fees as the organisations'
decision making on new projects was slower to navigate the uncertain
macroeconomic backdrop.
Revenues from North America were flat at $6.5m (H1 2022: $6.5m). This is
against a strong comparative H1 and a lower entry run rate into the current
financial year as a result of previously communicated employee and customer
churn during H2 of the prior year. These challenges have been addressed and
the trend has reversed with an improvement in customer retention and an
in-region sales team now embedded and starting to convert a building pipeline.
The Board expects the region to show positive underlying growth at the full
year as this momentum continues.
APAC continued to post strong double-digit growth with revenue from the region
increasing 17% to AUS$5.2m (H1 2022: AUS$4.4m). This follows continued
investment in the region, including further expansion of localised
go-to-market teams and, in Japan, the appointment of an experienced country
lead.
Organic international revenue increased by 19% to £11.5m (H1 2022: £9.7m)
in the period, with international sales contributing 34% to total revenue (H1
2022: 31%).
Product innovation
The Group's product roadmap continues to unlock growth opportunities with
functionality recurring revenue (licence, data charges and additional
functionality) growing 13% to £12.2m in the period (H1 2022: £10.8m).
Our Research and development focus is guided by the Group's Customer
Experience Data Platform (CXDP) vision and how to bring this powerful
functionality to the mid-market.
The innovations surrounding analytics have helped us attract larger and
mid-market customers, some of which are finding that Dotdigital can meet their
data capability needs and so replace point solutions. Cross-account analytics
and account tagging are just some of the ways in which large businesses with
multiple accounts can streamline how they analyse their data across
departments and business divisions. We also see organisations review their
larger cloud solutions and look to Dotdigital as a viable alternative that
offers equivalent power at an attractive price-point. Our appeal to these
businesses is further strengthened by the launch of back-in-stock
notifications which is essential for brands who want to reduce their
opportunity cost. Multi-touch revenue attribution is also key to demonstrating
value and businesses are happy to invest in marketing despite external
pressures if success can be measured.
Our product roadmap will continue to focus on self-service integrations,
predictive analytics, and predictive subject line content creation as we enter
H2.
Strategic partnerships
The Group looks to complement its direct sales channel by building brand
awareness through strategic partnerships, with a core focus on forging
connectors into both ecommerce and CRM platforms, complemented by a broader
general partner referral network which includes over 200 active global
partners.
During the half, revenue through strategic partners grew 17% to £16.3m (H1
2022: £13.9m). The Group's ecommerce partners, which include Magento and
Shopify among others, grew a healthy 10%. Pleasingly, the Group saw
significant growth through its CRM partners, including Microsoft Dynamics and
Salesforce, which together grew 32% in the period following more investment
into this channel. The CRM channel partnership growth was particularly strong
in EMEA due to increasing brand awareness through the channel, providing
increasing confidence of building on this momentum in the future.
M&A
Now that the planned organic investment has been made and is showing returns,
the Board is focusing on acquisition opportunities to supplement organic
growth. Our acquisition strategy is focused on the following key categories:
adjacent CXDP-related technologies that will drive ARPC expansion and open up
new markets; consolidation in the market for talent and brand to expand
geographical coverage; and specialist functionality for target verticals.
Current Trading and Outlook
We are encouraged by the progress achieved in the period and enter the second
half with strengthened operations and good trading momentum. In the current
climate we are seeing a renewed focus on rationalising technology stacks to
drive value and ROI, which is uncovering new opportunities particularly
amongst larger enterprises leading to higher value deals.
As we look ahead, our focus is on building our CXDP, supporting our
opportunity in North America through new hires, as well as additional
headcount across the business to match demand and to drive more lead
generation through partners and direct channels. Whilst other suppliers take
stock of previous investment rounds, we see this as an opportunity to further
entrench our position in the market, supported by a growing pipeline and
resilient underlying business.
We believe the potential is substantial. We understand where our opportunities
lie and how we can capture them. While remaining cognisant of the challenging
macroeconomic backdrop, our growing global reputation, talented and committed
teams, and good visibility over the second half, provides the Group with
confidence in continued success.
FINANCIAL REVIEW
Revenue
Revenue during the period grew 9% to £33.8m from £30.9m in H1 2022. This
performance was driven primarily by net revenue expansion but also growth in
SMS volumes.
Recurring revenue represents c.95% of revenues, improving visibility on future
revenues. Enhanced functionality revenue (which includes licence fees and
bolt-on functionality) grew 13% to £12.2m from £10.8m in H1 2022.
International revenue was 34% of total sales in the period, from 31% in H1
2022. Of that, revenues were flat in the US at $6.5m (H1 2022: $6.5m)
following stabilisation of sales and customer success teams in the region, and
up 17% in APAC to AUS$5.2m (H1 2022: AUS$4.4m). EMEA revenues grew 7% in the
period to £25.3m (H1 2022: £23.6m). The Group also benefitted from the
strengthening of the US dollar.
During the period ARPC, measures at the end of period increased by 11% to
£1,573 per month (H1 2022: £1,422 per month).
Gross Margin
Product gross margins remain consistent with the prior period. Total Gross
margin % reduced slightly to 79.1% (H1 2022: 82.1%) reflecting fluctuations of
revenue mix.
EBITDA
We achieved an adjusted EBITDA margin of 33% and an adjusted operating profit
margin of 22% in the first half, which was in line with management
expectations. The Group has absorbed significant cost inflation both relating
to planned increased headcount and also third-party suppliers. It continues to
invest in go-to-market activity and product development to deliver our product
roadmap. The adjustments include a share-based payment charge of £0.26m and
exceptional costs of £0.06m.
Balance Sheet & Cash Position
Dotdigital continues to generate strong cash flow from operations with an
interim period end net cash balance of £49.6m. Strong cash generation has
given us strategic options, particularly involving opportunities to explore
potential acquisitions of relevant adjacent technologies.
The Group continues to prioritise product development and during the period
spent c.£4.0m on development (compared to c.£3.4m in H1 2022).
Dividend Policy
A dividend of 0.98p per ordinary share (2022: 0.86p) was proposed by the
Company at the time of its Final Results in November last year, demonstrating
a commitment from the Board to deliver value by focusing on total shareholder
return. This dividend was approved by shareholders at the Annual General
Meeting on 21 December 2022 and paid on 31 January 2023.
The Group will review the dividend at year end; therefore, in line with
previous years the Board is not proposing an interim dividend. This represents
the 10(th) year of paying dividends which have increased with a CAGR of 29%
during that period since our inaugural dividend in 2013.
Dotdigital Group Plc
Consolidated Income Statement
For the six months ended 31 December 2022
6 months 6 months 12 months
to 31 Dec 2022 to 31 Dec 2021 to 30 June 2022
Unaudited Unaudited Audited
Note £'000s £'000s £'000s
Revenue from contracts with customers 4 33,822 30,911 62,832
Cost of sales (7,053) (5,541) (11,570)
Gross profit 4 26,769 25,370 51,262
Administrative expenses (19,222) (16,470) (36,726)
Share based payments (262) (222) (456)
Exceptional costs* (60) (60) (475)
Operating profit 7,225 8,618 13,605
Finance income 214 16 57
Finance costs (23) (30) (57)
Profit before income tax 7,416 8,604 13,605
Income tax expense (936) (1,825) (1,774)
Profit for the period attributable to the owners of the Company 6,480 6,779 11,831
Earnings per share (pence per share)
Basic 6 2.17 2.27 3.96
Diluted 6 2.13 2.23 3.88
Adjusted basic 6 2.27 2.36 4.27
Adjusted diluted 6 2.23 2.32 4.18
* Exceptional costs relate to the amortisation of acquired
intangibles. Senior Management settlement costs of £355,000 were also
included within exceptional costs in the 12 months to 30 June 2022.
Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2022
6 months 6 months 12 months
to 31 Dec 2022 to 31 Dec 2021 to 30 June 2021
Unaudited Unaudited Audited
note £'000s £'000s £'000s
Profit for the period 6,480 6,779 11,831
Other comprehensive income/(expense)
Items that may be subsequently reclassified to
profit and loss:
Exchange differences on translating foreign operations (43) 29 333
Total comprehensive income attributable to:
Owners of the parent 4 6,437 6,808 12,164
Consolidated Statement of Financial Position
As at 31 December 2022
Note As at As at As at
31 Dec 2022 31 Dec 30 June
2021 2022
Unaudited Unaudited Audited
£'000s £'000s £'000s
Assets
Non-current assets
Goodwill 9,680 9,680 9,680
Intangible assets 18,631 16,749 17,698
Property, plant and equipment 2,905 3,622 3,285
31,216 30,051 30,663
Current assets
Trade and other receivables 12,970 12,838 13,211
Cash and cash equivalents 49,574 40,035 43,919
62,544 52,873 57,130
Total assets 4 93,760 82,924 87,793
Equity attributable to the owners of the parent
Called up share capital 8 1,496 1,494 1,496
Share premium 7,124 7,124 7,124
Reverse acquisition reserve (4,695) (4,695) (4,695)
Other reserves 2,063 3,829 2,005
Retranslation reserve 253 (8) 296
Retained earnings 70,345 60,863 63,582
Total equity 76,586 68,607 69,808
Consolidated Statement of Financial Position
As at 31 December 2022
As at As at As at
31 Dec 2022 31 Dec 2021 30 June 2022
Unaudited Unaudited Audited
£'000s £'000s £'000s
Liabilities
Non-current liabilities
Lease liabilities 1,426 2,174 1,758
Deferred tax 2,853 1,451 2,755
4,279 3,625 4,513
Current liabilities
Trade and other payables 11,931 9,739 12,654
Lease liabilities 832 902 818
Current tax payable 132 51 -
12,895 10,692 13,472
Total liabilities 17,174 14,317 17,985
Total equity and liabilities 93,760 82,924 87,793
Consolidated Statement of Changes in Equity
For the six months ended 31 December 2022
Share Share Reverse Other Re-translation Retained Total
capital premium acquisition reserves Reserve Earnings
reserve
£'000s £'000s £'000s £'000s £'000s £'000s £'000s
As at 1 July 2021 1,494 7,124 (4,695) 3,066 (37) 54,081 61,033
Profit for the period - - - - - 6,779 6,779
Retranslation reserve - - - - 29 - 29
Reserve Transfer - - - (3) - 3 -
Deferred tax on share options - - - 544 - 544
-
Share based payments - - - 222 - - 222
As at 31 December 2021 1,494 7,124 (4,695) 3,829 (8) 60,863 68,607
As at 1 January 2022 1,494 7,124 (4,695) 3,829 (8) 60,863 68,607
Profit for the period - - - - - 5,052 5,052
Dividends - - - - - (2,564) (2,564)
Retranslation reserve - - - - 304 - 304
Issue of share capital 2 - - - - - 2
Reserve Transfer - - - (231) - 231 -
Deferred tax on share options - - - (1,827) - - (1,827)
Share based payments - - - 234 - - 234
As at 30 June 2022 1,496 7,124 (4,695) 2,005 296 63,582 69,808
As at 1 July 2022 1,496 7,124 (4,695) 2,005 296 63,582 69,808
Profit for the period - - - - - 6,480 6,480
Retranslation reserve - - - - (43) - (43)
Reserve transfer - - - (283) - 283 -
Deferred tax on share options - - - 79 - - 79
Share based payments - - - 262 - - 262
As at 31 December 2022 1,496 7,124 (4,695) 2,063 253 70,345 76,586
- Share capital is the amount subscribed for shares at nominal value.
- Share premium represents the excess of the amount subscribed for Share Capital
over the nominal value net of the share issue expenses.
- Retained earnings represents the cumulative earnings of the Group
attributable to equity shareholders.
- The reverse acquisition reserve relates to the adjustment required to account
the reverse acquisition in accordance with International Financial Reporting
Standards.
- Other reserves relate to the charge for the share-based payments in accordance
with International Financial Reporting Standard 2. The reserve transfer in the
period relates to lapsed share options.
- Retranslation reserve relates to the retranslation of a foreign subsidiary
into the functional currency of the Group.
Consolidated Statement of Cash Flows
For the six months ended 31 December 2022
6 months 6 months 12 months
to 31 Dec 2022 to 31 Dec 2021 to 30 June 2022
Unaudited Unaudited Audited
note £'000s £'000s £'000s
Cash flow from operating activities 7 10,546 13,258 25,162
Tax paid (440) (1,075) (1,761)
Net cash generated from operating activities 10,106 12,183 23,401
Cash flow from investing activities
Purchase of intangible fixed assets (3,989) (3,439) (7,686)
Purchase of property, plant and equipment (178) (162) (465)
Proceeds from sale of property, plant and equipment - - -
Interest received 214 16 57
Net cash used in investing activities (3,953) (3,585) (8,094)
Cash flows from financing activities
Equity dividends paid - - (2,564)
Payment of leasing liabilities (455) (543) (1,110)
Proceeds from share issues - - 2
Net cash used in financing activities (455) (543) (3,672)
Increase in cash and cash equivalents 5,698 8,055 11,635
Cash and cash equivalents at beginning of period 43,919 31,951 31,951
Effect of foreign exchange rate changes (43) 29 333
Cash and cash equivalents at end of period 49,574 40,035 43,919
Notes to interim financial statements
For the six months ended 31 December 2022
1. GENERAL INFORMATION
Dotdigital Group Plc is a company incorporated in England and Wales and quoted
on the AIM market.
2. BASIS OF INFORMATION
These consolidated interim financial statements have been prepared in
accordance with UK-adopted International Accounting Standards ('IAS') and on a
historical basis, using the accounting policies which are consistent with
those set out in the Group's annual report and accounts for the year ended 30
June 2022. The interim financial information for the six months to 31 December
2022, which complies with IAS 34 'Interim Financial Reporting' has been
approved by the Board of Directors on 6 March 2023.
The unaudited interim financial information for the period ended 31 December
2022 does not constitute statutory accounts within the meaning of Section 435
of the Companies Act 2006. The comparative figures for the year ended 30 June
2022 are extracted from the statutory financial statements which have been
filed with the Registrar of Companies and contain an unqualified audit report
and did not contain statements under Section 498 to 502 of the Companies Act
2006.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 30 June 2022, as described in those
financial statements.
4. SEGMENTAL REPORTING
The Group's single line of business is the provision of data-driven
omnichannel marketing automation. The chief operating decision maker considers
the Group's reportable segments to be by geographical location this being
EMEA, US and APAC operations as shown below:
Geographical revenue and results
6 months to 31 December 2022
EMEA US APAC
Operations Operations Operations Total
£'000s £'000s £'000s £'000s
Income statement
Revenue 25,342 5,520 2,960 33,822
Gross profit 19,205 4,942 2,622 26,769
Profit/(Loss) before income tax 7,147 603 (334) 7,416
Total comprehensive income attributable to the owners of the parent 6,217 608 (388) 6,437
Financial position
Total assets 86,146 4,849 2,765 93,760
Net current assets 44,251 3,944 1,454 49,649
6 months to 31 December 2021
EMEA US APAC
Operations Operations Operations Total
£'000s £'000s £'000s £'000s
Income statement
Revenue 23,644 4,885 2,382 30,911
Gross profit 18,927 4,367 2,076 25,370
Profit/(Loss) before income tax 8,774 96 (266) 8,604
Total comprehensive income attributable to the owners of the parent 7,046 13 (251) 6,808
Financial position
Total assets 75,743 4,670 2,511 82,924
Net current assets 36,957 3,727 1,497 42,181
12 months to 30 June 2022
EMEA US APAC
Operations Operations Operations Total
£'000s £'000s £'000s £'000s
Income statement
Revenue 48,191 9,688 4,953 62,832
Gross profit 38,374 8,537 4,351 51,262
Profit/(Loss) before income tax 12,444 972 189 13,605
Total comprehensive income
attributable to the owners of the parent 10,967 1,049 148 12,164
Financial position
Total assets 83,664 3,498 631 87,793
Net current assets/(liabilities) 42,270 2,204 (816) 43,658
5. DIVIDENDS
The proposed final dividend of £2,925,849 for the year ended 30 June 2022 of
0.98p per share was paid on the 31 January 2023.
6. EARNINGS PER SHARE
Earnings per share data is based on the consolidated profit using the weighted
average number of shares in issue of the parent Company. Basic earnings per
share are calculated by dividing the earnings attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding
during the period.
Diluted earnings per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares. Adjusted earnings per share is based on the consolidated profit
deducting the acquisition related exceptional costs and share-based payment.
A number of non-IFRS adjusted profit measures are used in the annual report
and financial statements and in these interim financial statements. Adjusting
items are excluded from our headline performance measures by virtue of their
size and nature, in order to reflect management's view of the performance of
the Group. Summarised below is a reconciliation between statutory results to
adjusted results. The Group believes that alternative performance measures
such as adjusted EBITDA are commonly reported by companies in the markets in
which it competes and are widely used by investors in comparing performance on
a consistent basis without regard to factors such as depreciation and
amortisation, which can vary significantly depending upon accounting methods
(particularly when acquisitions have occurred) or based on factors which do
not reflect the underlying performance of the business. The adjusted profit
after tax earnings measure is also used for the purpose of calculating
adjusted earnings per share.
Reconciliations to earnings figures used in arriving at adjusted earnings per
share are as follows:
6 months to 31 December 2022 6 months 12 months to 30 June 2022
to 31 December 2021
£'000s £'000s £'000s
Profit for the year attributable to the owners of the parent 6,480 6,779 11,831
Amortisation of acquisition-related intangible fixed asset 60 60 120
Other exceptional costs - - 355
Share-based payment 262 222 456
Adjusted profit for the year attributable to the owners of the parent 6,802 7,061 12,762
Management does not consider the above adjustments to reflect the underlying
business performance.
6 months 6 months 12 months
to 31 Dec 2022 to 31 Dec 2021 to 30 June 2022
Unaudited Unaudited Audited
Earnings per Ordinary share:
Basic (pence) 2.17 2.27 3.96
Diluted (pence) 2.13 2.23 3.88
Adjusted basic (pence) 2.27 2.36 4.27
Adjusted diluted (pence) 2.23 2.32 4.18
to 31 Dec 2021 to 30 June 2022
to 31 Dec 2022
Unaudited Unaudited Audited
£'000s £'000s £'000s
Profit for the period
for the purpose of earnings
per share: 6,480 6,779 11,831
Basic 6,802 7,061 12,762
Adjusted
Profit for the period
for the purpose of earnings
per share: 6,480 6,779 11,831
Basic 6,802 7,061 12,762
Adjusted
Weighted average number of shares in issue as
follows:
6 months 6 months 12 months
to 31 Dec to 31 Dec 2021 to 30 June 2022
2022
Unaudited Unaudited Audited
Weighted average number
Basic 299,216,130 298,778,630 298,995,582
Diluted 304,819,814 304,006,513 305,218,306
The adjusted profit for the period, adjusted basic earnings per ordinary share
and adjusted diluted earnings per ordinary share exclude exceptional costs
relating to share based payments £262,000 (2021: £222,000, 2022: £456,000),
amortisation of acquired intangibles £60,000 (2021: £60,000, 2022:
£120,000) and senior management costs of £nil (2021: £nil, 2022 £355,000).
7. RECONCILIATION OF PROFIT BEFORE INTEREST AND CORPORATION TAX TO NET CASH
GENERATED FROM OPERATIONS
6 months 6 months 12 months
to 31 Dec to 31 Dec 2021 to 30 June 2022
2022
Unaudited Unaudited Audited
£'000s £'000s £'000s
Profit before income tax from all operations 7,416 8,604 13,605
Adjustments for:
Depreciation 535 565 1,124
Amortisation 3,038 2,824 6,123
Loss on disposal of fixed assets 18 - -
Share-based payments 262 222 456
Finance lease non-cash movement (78) 96 152
Finance expense 23 30 57
Decrease in trade and other receivables 55 512 325
(Decrease)/increase in trade and other payables (723) 405 3,320
Net cash from operations 10,546 13,258 25,162
8. CALLED UP SHARE CAPITAL
During the period no shares were
issued.
9. RELATED PARTY NOTE
Transactions between the company and its subsidiaries, who are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
Key management remuneration:
Key management include Directors and non-executive Directors
The remuneration paid for key management for employee services are as follows:
12 months
6 months 6 months to 30 June 2022
to 31 Dec 2022
to 31 Dec 2021
Unaudited Unaudited Audited
£'000s £'000s £'000s
Aggregate emoluments 363 312 938
Ex-gratia payment - - 213
Share-based payments on the LTIP options granted 86 133 176
Company contributions to money purchase pension scheme 12 13 25
461 458 1,352
The share-based payment calculation is based on annual share option awards
granted to Milan Patel in 2020 and 2021 which are assessed for vesting in the
third year of the performance period. Paraag Amin had end to end awards,
granted in October 2018, which vested fully in 2021 and were subject to a
holding period. Under IFRS 2 Share based payments, the Group must provide an
estimate for the costs based on the valuation model called Monte Carlo each
year, as if they fully paid out at the end of the performance period in 2023
& 2024 respectively for Milan Patel. To be fully paid out, half the award
is based on the Group achieving an annual compounded TSR in the upper quartile
of AIM 100 and the other half is based on hitting an EPS target set by the
Remuneration Committee.
6 months 6 months 12 months
to 31 Dec 2022 to 31 Dec 2021 to 30 June 2021
Unaudited Unaudited Audited
£'000s £'000s £'000s
The following transactions were carried out with related parties
Sale of services
Entities controlled by non - executive director of the Group:
Ipswich Town Football Club - 5 5
Epwin Group Plc - Email marketing services - 3 4
- 8 9
At 31 December 2022 there were no balances outstanding for the above
transactions with related parties (2021: £nil, 2022: £nil).
10. SUBSEQUENT EVENTS TO 31 DECEMBER 2022
As at the date of these statements and the date they were approved by the
Board of Directors there were no such events to report.
Copies of this interim statement are available form the Company at its
registered office at, No 1 London Bridge London, SE1 9BG. The interim
financial information document will also be available on the Company's website
www.dotdigitalgroup.com.
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