REG - Fadel Partners Inc. - Half Year Trading Update

Fadel PartnersAnnouncement

25/07/2023 07:00

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RNS Number : 0328H  Fadel Partners Inc.  25 July 2023

25 July 2023

Fadel Partners, Inc.

('FADEL', the 'Company' or, together with its subsidiaries, the 'Group')

Half Year Trading Update

Fadel Partners, Inc. (AIM: FADL), a brand compliance and rights and royalty
management software provider, is pleased to provide a trading update for the
six months ended 30 June 2023, based on unaudited management accounts.
Following the Company's successful IPO in April 2023, FADEL has demonstrated
strong operational progress, underpinned by a solid financial performance. The
management team has made good progress in investing for growth, in line with
its stated strategy.

Focus on growing recurring revenue continues to be at the forefront of the
Group's strategy. The Board expects revenue for the financial year ending 31
December 2023 (FY23) to be in line with market expectations*, however 2H23
will show a significant increase in revenue relative to 1H23 due to the timing
of annual contract renewals for certain enterprise licenses which are now
heavily weighted towards the Company's year-end. Recurring revenue is expected
to increase to c.80% of total revenue for FY23 (FY22 65%), reflecting positive
growth expected from license and support renewals and net new sales. Services
revenue is expected to reduce relative to the prior year, due to the
successful completion of a number of service contracts associated with the
conclusion of the implementation phase for certain IPM customers and phased
regional go-lives.

 

1H23 Financial Highlights

 ·         Revenue growth in line with the Board's expectations.
 ·         Recurring revenue growth of 3% to $4.3m 1H23 (1H22: $4.2m).
 ·         Service revenue of $1.0m 1H23 (1H22 of $2.5m) reflects the successful
           completion of a number of implementations and regional roll-outs for existing
           clients.
 ·         Cash and cash equivalents of $8.2m at 30 June 2023 (net cash $7.3m).

 

Operational Highlights

 ·         Since the IPO, FADEL has invested in the further development of its sales team
           including hiring Frank Matticola as Chief Revenue Officer and five further new
           salesperson / lead generation hires complemented by product management, sales
           support and administration hires to build out phase I of the sales team
           expansion, greatly expanding our go to market capacity and capabilities.
 ·         Our Brand Vision offering is attracting a great deal of interest amongst
           enterprise clients.  The latest Content Tracking product release in 2Q23
           introduced AI based image and video matching and crawling, now capable of
           searching for brand marketing content in image and video form across the web
           and social media. Video Tracking is proving to be a much-needed solution to a
           challenging problem many multi-national brands have been unable to solve to
           stay compliant with their marketing content and its digital distribution.
 ·         It has become increasingly clear that many of our existing and prospective
           customers have needs for the solutions provided by both of our product
           families, namely IPM Suite and Brand Vision, presenting a number of
           cross-selling and up-selling opportunities. We are actively engaged with many
           companies discussing what combinations of our offerings may best suit their
           needs.
 ·         We continue to invest in our product offerings with new features and
           functionality being rolled out in our quarterly releases for both IPM Suite
           and Brand Vision.

 

Post Period Highlights

 ·         Good progress post IPO in building and converting our pipeline of
           opportunities with signatures for several deals in the Life Sciences,
           Publishing and Tobacco industries now concluded bringing recurring revenue
           total contract value (TCV) of >$700k in aggregate and associated services
           of $30k.
 ·         In addition, we have signed a number of new contracts and renewals with a TCV
           of >$800k for Support, further contributing to our recurring revenue in
           2H23 and beyond.

 

Notice of Interims

The Group expects to announce its full interim results in the third week of
September.

* FY23 consensus revenue estimate: $14.6m.

Tarek Fadel, Chief Executive Officer of FADEL, commented:

"The first half of 2023 was another milestone period for FADEL. We delivered a
successful IPO and then began, in earnest, the process of building the
business for the next phase of its growth journey.

"It has become increasingly clear that many of our existing and prospective
customers have needs for the solutions provided by both of our product
families and we are delighted about the future prospects for the Company.

"The successes in the year have further consolidated our position as a leader
in the digital content and intellectual property market and provide a strong
platform to take advantage of significant market opportunities available to
us.

"I am pleased to report that trading for FY23 continues to be in line with
expectations and the services revenue decline shows two clear and positive
trends: we are concluding a phase of bringing a number of world-scale
enterprise customers onboard which provides capacity for the next phases of
growth, and we are increasing a recurring revenue bias to our income with some
80% of revenue now being recurring."

This announcement contains inside information for the purposes of the retained
UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").

For further information please contact:

 Tarek Fadel, Chief Executive Officer                                          Via Alma PR

 Vicary Gibbs, Chief Financial Officer

 finnCap Limited (Nomad & Broker)                                              020 7220 0500
 Jonny-Franklin Adams, Emily Watts, Abigail Kelly, Milesh Hindocha (Corporate
 Finance)
 Tim Redfern, Sunila De Silva (ECM)

 Alma PR                                                                       Tel: +44(0)20 3405 0205
 Josh Royston                                                                  fadel@almapr.co.uk
 Matthew Young
 Andy Bryant

 

About FADEL Partners Inc.

FADEL is a developer of cloud based brand compliance and rights and royalty
management software, working with some of the world's leading licensors and
licensees across media, entertainment, publishing, consumer brands and
hi-tech/gaming companies. The Group combines the power of rights management
and content compliance with sophisticated content services, AI-powered visual
search and image and video recognition.

FADEL has two solutions, being IPM Suite (rights and royalty management for
publishers and licensing) and Brand Vision (an integrated platform for Brand
Compliance & Monitoring that includes Content Services, Digital Rights
Management, AI-Powered Content Tracking, a Brand Monitor, and 100 million
Ready-to-License Images).

The Group's main country of operation is the United States, where it is
headquartered in New York, with further operations in the UK, Lebanon, France,
Canada and India. Founded in 2003 by Tarek Fadel (Chief Executive Officer),
FADEL has since grown to a team of 116 full time employees, plus an additional
pool of c.50-60 contractors.

For more information, please visit the Group's website at: www.fadel.com
(http://www.fadel.com) .

 

 

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