REG - Pebble Beach Sys Grp - Trading and Business Strategy Update

Pebble Beach SystemsAnnouncement

14/01/2025 07:00

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RNS Number : 1638T  Pebble Beach Systems Group PLC  14 January 2025

Trading and business strategy update

Pebble Beach Systems Group plc (AIM: "PEB", "Pebble" or the "Group"), a
leading global software business specialising in playout automation and
integrated channel solutions for the broadcast and streaming service markets,
provides the following trading update for the year ended 31 December 2024
("FY24") together with a business strategy update.

FY24 Trading Update

As outlined in announcements during the year, FY24 has shown itself to be a
challenging market for orders with sector delays in the full-scale adoption of
IP Technology. As a result, Pebble continues to experience extended conversion
times for project orders with customers delaying decisions on investing in new
systems. Project orders in the period were down 2%, 35% of which were booked
in December. The Group therefore expects to report results that are below
market guidance* with revenues expected to be c.£11.5m (FY24: £12.4m) and
Adjusted EBITDA** expected to be approximately £3.3m (FY23: £3.8m).

However, following a levelling up of the Group's support agreements ("SLAs"),
we expect to report a significant increase in recurring revenues, up 17% on
FY23 to c.£6.1m (FY23: £5.2m), representing c. 54% of total Group revenues.
Future revenue visibility from SLAs in the order book has also improved with
an increase of 56%.

The Group also continues to demonstrate strong cash generation with continued
pay down of historical debt. Gross bank debt at 31 December 2024 was c£4.6m
following another £1.0m repayment (FY23: £5.6m). Net debt at the period end
will have reduced by c.22% from last year to £3.7m (FY23: £4.8m).

Business strategy update

Pebble launched its PRIMA platform at the NAB trade show in April 2024. PRIMA
is an IP native technology platform targeted at broadcasters transitioning
from baseband infrastructure to full IP. The first iteration of PRIMA is
complete with full platform and basic automation capabilities.

Given the ongoing delays in the full-scale adoption of IP technologies the
Group will be taking the following strategic actions. Specific PRIMA R&D
be scaled back until such time as market demand warrants further investment.
Short term focus will be on the existing core capabilities as a broadcast
solutions specialist. Pebble will continue its development of its existing
playout and integrated channel products and services for current customers and
new prospects.

As a result of these actions, the Board anticipates a significant reduction of
the existing cost base to be commenced and completed in Q1 25. We estimate
that this rebalancing should deliver annualised cash savings of approximately
£2m and as a result, sustainable free cash inflows should also increase
materially in FY25 and beyond.

The board believes this strategy will give Pebble increased options for future
growth. The additional funds generated will give the flexibility to balance an
accelerated pay down of the long-term debt with M&A investment, to add
technology product offerings, and potentially paving the way for improving
shareholder returns.

The Board looks forward to providing a further update in the Group's audited
results for the year ended 31 December 2024, the release date of which will be
announced in due course.

John Varney, Non-Executive Chairman, commented:

"I have supreme confidence that PRIMA as an IP native product is perfectly
positioned for when the market is ready to transition to IP technology.
Pebble's unique strength remains its long-standing position as a leading
expert in delivering high quality products and services within the broadcast
industry."

* The Board believes that the current consensus estimates for the year ending
31 December 2024 is revenue of £13.4 million and adjusted EBITDA of £4.1
million.

** Adjusted EBITDA (earnings before interest, tax, depreciation and
amortisation) a non-GAAP measure, is EBITDA before non-recurring items and
foreign exchange gains/losses.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR") and is disclosed
in accordance with the company's obligations under Article 17 of MAR

For further information please contact:

                                                                   +44 (0) 75 55 59 36 02

 Peter Mayhead - CEO

 Cavendish Capital Markets Limited (Nominated Adviser and Broker)

 Marc Milmo / Teddy Whiley - Corporate Finance                     +44 (0) 207 220 0500
 Tim Redfern / Sunila de Silva - ECM

 

The Company is quoted on the LSE AIM market (PEB.L).  More information can be
found at www.pebbleplc.com (http://www.pebbleplc.com) .

About Pebble Beach Systems

 

Pebble Beach Systems (trading as Pebble) is a world leader in designing and
delivering automation, integrated channel and virtualised playout solutions,
with scalable products designed for applications of all sizes. Founded in
2000, Pebble has commissioned systems in more than 70 countries, with proven
installations ranging from single up to over 150 channels in operation, and
around 2000 channels currently on air under the control of our automation
technology. An innovative, agile company, Pebble is focused on discovering its
customers' requirements and pain points, designing solutions which will
address these elegantly and efficiently, and delivering and supporting these
professionally and in accordance with its users' needs.

 

Forward-looking statements

Certain statements in this announcement are forward-looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that these expectations
will prove to be correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. The Group undertakes no
obligation to update any forward-looking statements whether as a result of new
information, future events or otherwise. Nothing in this announcement should
be construed as a profit forecast.

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