REG - Merit Group PLC - Trading Update

MeritAnnouncement

04/05/2023 07:00

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RNS Number : 3416Y  Merit Group PLC  04 May 2023

4 May 2023
 

 

Merit Group plc

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

Trading update

Merit Group Plc (AIM:MRIT), the data and intelligence business, is pleased to
announce a positive post year end update on its financial trading performance
for the year ended 31 March 2023 ("FY23").

The Group expects to report continuing operational revenues in FY23 of
approximately £18.6m and Adjusted EBITDA(1) from continuing operations, ahead
of market expectations(2) by around 20%, at no less than £2.6million. The
Group had net debt of £2.5m as at 31 March 2023.

The Group expects its FY23 financial results statement to reflect the
significant progress made in the year which includes;

·   the disposal of assets / businesses and associates that were not core
to the Group's strategy of building a data and intelligence business focused
on subscription or recurring revenue;

·  the settlement of all deferred liabilities, namely the deferred
consideration on the Meritgroup Limited acquisition and deferred VAT and rent
payments built up during the COVID pandemic;

·   the disposal of the Group's excess office space in London, which will
deliver a significant reduction in the Group's non-operating overheads for
FY24 and beyond;

·    the strengthening of the Group's balance sheet through the removal of
significant property liabilities and the approximately £5m of proceeds from
the disposal of non-core assets.

The Board has now turned to the second stage of its plan, a focus on
generating significant value for shareholders.

David Beck, CEO of Merit Group plc, said;

"We now have two strong and profitable operating businesses with attractive
gross and net margins. Within the Dods Political Intelligence business our
revenue is almost entirely subscription based and within Merit Data &
Technology over 85% is recurring from our long-standing customer base. The
Group therefore now has healthy visibility of earnings. Through our disposal
programme we have removed the seasonality that was previously a feature of our
trading performance. We continue to focus on reducing non-operating overheads
and central costs to ensure that the Group will convert as much as possible of
its operating earnings into cash.

"We are targeting further revenue growth in the new financial year which,
combined with the significant step down in costs already achieved, will help
us drive returns for shareholders."

 

(1) Adjusted EBITDA is calculated as earnings before tax, depreciation,
amortisation of intangible assets, share based payments and non-recurring
items in respect of continuing operations

(2) Based on the £2.2m EBITDA forecast contained in the most recent brokers
research note, published on 27 March 2023

For further information, please contact:

 

Merit Group plc

David Beck - CEO

Phil Machray - CFO
                                                 020
7593 5500

www.meritgroupplc.com (http://www.meritgroupplc.com)

 

 

Canaccord Genuity Limited (Nomad and Broker)

Bobbie Hilliam
 
   020 7523 8150

Harry Pardoe

 

 

For the purposes of MAR and Article 2 of Commission Implementing Regulation
(EU) 2016/1055, this announcement is being made on behalf of the Group by
David Beck, Chief Executive Officer.

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310.Upon the publication
of this announcement, this inside information is now considered to be in the
public domain.

 

 

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