REG - dotDigital Group plc - Trading Update and Notice of Half Year Results

dotDigitalAnnouncement

27/01/2022 07:00

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RNS Number : 8262Z  dotDigital Group plc  27 January 2022

27 January 2022

Dotdigital Group plc

("Dotdigital", the "Group" or the "Company")

Trading Update and Notice of Half Year Results

Continued organic growth underpinned by recurring SaaS business model

 

Dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of an
omnichannel marketing automation and customer engagement platform, announces a
trading update for the six months ended 31 December 2021 ("H1 2022"). The
trading performance reported in this statement is based on unaudited
management accounts.

The Board is pleased to report that it expects to report a first half
performance in line with market expectations for the full year.

Highlights

 ·         Group revenue increased c.10% to £30.9m (H1 2021: £28.2m) driven by
           growth in sales from both new and existing customers
           o  Against a strong prior year comparator, revenue from SMS sends is now at
           more normalised levels, post immediate pandemic related activity
 ·         R&D continues to underpin Dotdigital's growth strategy, with recurring
           revenues from enhanced product functionality growing by 22% to £10.8m (H1
           2021: £8.9m)
 ·         ARPC(1) up by 19% to £1422 per month (H1 2021: £1196 per month), driven
           by a continued increase in new and existing client spend
 ·         Revenue, adjusted EBITDA(2) and adjusted profit before tax expected to be in
           line with market expectations(3)
 ·         Cash balance at 31 December 2021 of £40.0m (30 June 2021: £32.0m)

 

Overview

The Group's organic growth strategy, namely ongoing product innovation,
geographic expansion and growth through strategic partnerships, delivered
solid growth in the first half of the year against a strong comparative
period.

The Group secured new sales with both new and existing customers. New wins
include Warner Bros, Sunderland Football Club and the British Dental
Association.

Underpinning both the Group's consistent double digit revenue growth and over
20% operating margin, is the Group's predictable SaaS business model.

Product innovation

The Group's growth is supported by a focussed R&D investment programme
which continues to drive value for both our new and existing customers.
Recurring revenue from enhanced product functionality and upgrades increased
22% to £10.8m. The key areas of investment for the Group remain: enhancing
our customer data and experience platform capabilities; data visualisations
through reporting and analytics; deeper integrations with new and existing
technology partners; and our user experience of the platform.

Geographic expansion

Organic international revenue increased by 4% to £9.7m (H1 2021: £9.3m)
in the period, with international sales contributing 31% to total revenue (H1
2021: 33%).

EMEA showed solid revenue growth of c.10% in the period to £23.6m (H1 2021:
£21.5m). The Group continues to see growing demand in the region for its
omnichannel capability, as marketeers increase their focus on relevancy and
personalisation to provide the best possible customer experience.

Revenues from the Americas grew organically by c.3% to $6.5m (H1
2021: $6.3m). In a challenging labour market with high levels of wage
inflation, the Directors continue to focus on strengthening the management
team in the region, most recently with the addition of a new VP of Growth. The
recruitment of talent and expanding the employee base is key to improving
growth rates within the region.

APAC revenue grew organically by c.27% to AUS$4.4m (H1 2021: AUS$3.5m). The
Group's Japan office is now operational and uptake of the Engagement Cloud in
Singapore has been encouraging. The Group has continued to develop its
presence in Australia despite the challenges posed by lockdowns.

The Group continues to navigate various cost pressures, particularly regarding
hiring, across all regions but is confident of actions being taken by
management to support the Group's geographic expansion strategy in the second
half and beyond.

Strategic partnerships

Sales through connectors into our strategic partners increased by 9%
to £13.9m (H1 2021: £12.8m).

Magento connector revenue grew 6%, Shopify connector revenue grew by 47% and
MS Dynamics connector revenue grew by 3% compared to the same period in the
previous year.

Whilst the Group works through pressures in the US, it continues to build on
its work with its strategic partners, both in the ecommerce and CRM platform
space, to drive brand awareness across their customer bases through joint go
to market plans. In H1, the Group increased its investment in adding new
channel managers into its international operations, building on the strong
relationships it has with its agency and technology partners that operate
within the ecosystem.

The pipeline continues to build with strong momentum as the Group moves into
H2.

Notice of H1 2022 Half Year results

Dotdigital Group plc will announce its Half Year results for the period ended
31 December 2021 on 3 March 2022.

 

Milan Patel, CEO of Dotdigital, commented: "The Group delivered another half
year period of double-digit growth, with continued sales momentum across
channels from new and existing customers. These results demonstrate a growing
interest in our core offering and continued execution of the growth strategy
in a structurally growing market.

Our Engagement Cloud platform is one of the most technically advanced yet
user-friendly offerings in the market, and the investment we continue to make
in our omnichannel capabilities stands us in good stead to capture the full
spectrum of opportunities presented by the ongoing shift to digital marketing.

The Group's continued growth is supported by a strong balance sheet, a
recurring SaaS business model and healthy sales pipeline, putting us in a
strong position as we enter the second half of the year. Whilst cognisant of
the fluid global economic environment, the Board is confident in the continued
positive performance of the business."

 

(1) ARPC means average revenue per customer.

(2) EBITDA means earnings before interest, tax, depreciation, amortisation,
and before restructuring, other non-recurring costs and certain non-cash
items.

(3) Consensus revenue for continuing operations as at 24 January 2022, for the
year ending 30 June 2022, is approx. £65.6 million. Consensus adjusted
EBITDA for continuing operations as at 24 January 2022, for the year ending 30
June 2022, is approx. £20.9 million. Consensus adjusted profit before tax as
at 24 January 2022, for the year ending 30 June 2022, is approx. £14.5
million.

 

For further information please contact:

 Dotdigital Group Plc                                    Tel: 020 3953 3072

Milan Patel, CEO

Paraag Amin, CFO                                       InvestorRelations@dotdigital.com

 Alma PR (Financial PR)                                  Tel: 020 3405 0210

 Hilary Buchanan                                         dotdigital@almapr.co.uk

 David Ison

 Josh Royston

 Canaccord Genuity (Nominated Adviser and Joint Broker)  Tel: 020 7523 8000

Bobbie Hilliam

 Georgina McCooke

 Jonathan Barr, Sales

 finnCap (Joint Broker)                                  Tel: 020 7220 0500

 Stuart Andrews, Corporate Finance

 Alice Lane, ECM

 Rhys Williams, Sales

 Singer Capital Markets (Joint Broker)                   Tel: 020 7496 3000

Shaun Dobson, Head of Corporate Finance

 Alex Bond, Corporate Finance

 

Prior to this announcement's release, the statement contained inside
information for the purposes of Article 7 of Regulation (EU) 596/2014 (MAR)
(Market Abuse Regulation).

 

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