REG - Gresham Technologies - Trading Update and Notice of Results

Gresham TechnologiesAnnouncement

11/01/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240111:nRSK3155Za&default-theme=true

RNS Number : 3155Z  Gresham Technologies PLC  11 January 2024

11 January 2024

Gresham Technologies plc

FY23 Trading Update and Notice of Results

Growth in strategic subscription business driving recurring revenues and
enhanced profitability

Gresham Technologies plc (LSE: "GHT", "Gresham", "Group", "Company"), the
leading software and services company that specialises in providing solutions
for data integrity and control, banking integration, payments and cash
management, is pleased to provide a trading update for the financial year
ended 31 December 2023 ("FY23").

The Board is pleased to report a strong close to the year. In December,
contracts for initial deployments with two new Control customers were signed
including a Tier 1 global investment bank and one of the world's largest
sovereign wealth funds. In addition, an agreement has been reached with two
recently merged tier one bank customers for the adoption of Control as
standard across the combined business operations providing a high level of
certainty over existing recurring revenues.

 

The Group expects to report:

 

 ·             Group revenues of £49.0 million up 1%, or 3% on a constant currency basis
               over FY22
 ·             Clareti revenues of £37.8 million up 6%, or 8% on a constant currency basis
               over FY22
 ·             Clareti recurring revenues of £29.6 million up 8%, or 10% on a constant
               currency basis over FY22
 ·             Group Adjusted EBITDA(1) and Group cash EBITDA(2) at least in line with
               current market expectations(3) with margins improving over the prior year
 ·             Forward-looking Clareti Annualised Recurring Revenue ("ARR") as at 31 December
               2023 of £29.5 million (up 5% on FY22) or £30.4 million on a constant
               currency basis (up 8% on FY22)
 ·             Cash and cash equivalents at 31 December 2023 of £4.8 million with no debt
               (FY22: £6.3 million) ahead of market expecations(3)

 

 

The Group continues to see growing demand for its strategic Clareti business.
Forward-looking Clareti ARR grew from £28.1 million at the end of the prior
year to £30.4 million on a constant currency basis, standing at £29.5
million on an actual currency basis as at 31 December 2023. New sales and
improving ARR net retention rates generated constant currency net increases to
ARR totalling £2.3 million, which was offset by £0.9 million of foreign
exchange movements.

 

In line with plans announced on 17 November 2023, at the end of FY23 the Group
exited the vast majority of its legacy Australian IT services sub-contracting
business. This further accelerates the Group's transformation to a pure-play
SaaS company focussed on higher margin cash-generative Clareti solutions.

The Group finished the year with net cash and cash equivalents of £4.8
million and no debt, ahead of market expecations(3). This is after the payment
of £3.8 million for the final deferred consideration in relation to the
acquisition of Electra, and a one-off working capital movement due to
cessation of the legacy IT services sub-contracting business of £1.8 million.
 

 

The North American business made a particularly strong contribution during the
year with Clareti growth from new customers and upsell and cross-sell into the
existing installed base. The European business was slower than expected during
the first half of the year with momentum building in the second half driving a
much-improved pipeline into 2024.

 

The Board is pleased the Company was able to navigate the challenging global
macroeconomic conditions affecting the financial services sector, and FX
headwinds, to deliver Group revenue and earnings in line with, and cash ahead
of, market expectations. The business starts the year with over £38 million
of Group revenues already under contract and a strong pipeline of
opportunities. The Board is confident in the Company's ability to deliver
planned growth which, supported by cost reduction initiatives during FY24,
will further accelerate the business towards its objective of best-in-class
EBITDA margins and cash generation in FY25, and beyond.

Notice of Results

The Group expects that its audited results for FY23 will be announced on
Tuesday, 16 April 2024.

 

Ian Manocha, CEO, commented:

 

"We are pleased to report another year of growth for the Clareti business with
the committed margin improvements coming through to deliver enhanced cash
profitability in line with plans. We also improved upon all gross and net
revenue retention measures within our installed base and signed eight new logo
customers evidencing the value of our differentiated technology.

 

There is good momentum coming into the year with a strong pipeline of
opportunities at varying stages of negotiation. This, alongside other growth
and cost management initiatives, provides us with a high degree of confidence
in delivering further profitable growth in the coming years."

 

(1) Earnings Before Interest, Taxation, Depreciation and Amortisation adjusted
to add back share-based payment charges and exceptional items and including
continuing operations only.

(2) Group Adjusted EBITDA less capitalised development spend and any IFRS 16
lease related cash payments.

(3) The Company believes that current market expectations for the year
ending 31 December 2023 are Group revenues of £50.2m, Group adjusted
EBITDA of £11.0m and Group cash EBITDA of £4.6m.

 

 

Enquiries

 Gresham Technologies plc                               +44 (0) 207 653 0200
 Ian Manocha / Tom Mullan

 Singer Capital Markets (Financial Adviser and Broker)  +44 (0) 207 496 3000
 Shaun Dobson / Tom Salvesen / Jen Boorer

 Alma Strategic Communications                          +44 (0) 203 405 0205
 Josh Royston / Hilary Buchanan / Matthew Young

 

Inside information

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a
Regulatory Information Service ("RIS"), this inside information is now
considered to be in the public domain.

Note to editors

Gresham Technologies plc is a leading software and services company that
specialises in providing real-time solutions for data integrity and control,
banking integration, payments and cash management. Listed on the main market
of the London Stock Exchange (GHT.L) and headquartered in the City of London,
its customers include some of the world's largest financial institutions and
corporates, all of whom are served locally from offices located in the UK,
Europe, North America and Asia Pacific.

Gresham's award-winning Clareti software platform is a highly flexible and
scalable platform, available on-site or in the cloud, designed to address
today's most challenging financial control, risk management, data governance
and regulatory compliance problems. Learn more at www.greshamtech.com.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTBCGDBLXBDGSG