REG - Pulsar Group PLC - Trading Update

PulsarAnnouncement

24/01/2025 07:00

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RNS Number : 5321U  Pulsar Group PLC  24 January 2025

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.

 

 

Pulsar Group Plc

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

Trading Update

 

Pulsar Group Plc (AIM: PULS), the technology innovator delivering
Software-as-a-Service (SaaS) solutions for the global marketing and
communications industries, is pleased to announce an update on trading for the
year ended 30 November 2024.

 

Year to 30 November 2024

Despite a challenging environment where marketing spend in particular has been
restricted, Pulsar has successfully delivered another year of encouraging
constant currency ARR growth to £61.7m. The Group's Annual Recurring Revenue
("ARR") increased by £2.0m(1) in the period, highlighting sustained growth
and resilience. The ARR growth was driven by a four-percentage point increase
in renewal rates compared to the prior year, demonstrating the positive impact
of the Group's investments in products and services which have clearly
resonated with customers.

 

 ARR                       FY22     FY23 Change  FY23     FY24     FY24

                                                          Change

 EMEA & North America      £28.3m   +£1.1m       £29.4m   +£1.7m   £31.1m

 (Constant Currency)
 EMEA & North America      £28.6m   +£1.1m       £29.7m   +£1.4m   £31.1m

 (Reported*)

 APAC                      £28.7m   +£1.6m       £30.3m   +£0.3m   £30.6m

 (Constant Currency)
 APAC                      £31.4m   +0.2m        £31.6m   -£1.0m   £30.6m

 (Reported*)

 Group                     £57.0m   +£2.7m       £59.7m   +£2.0m   £61.7m

 (Constant Currency)
 Group                     £60.0m   +£1.3m       £61.3m   +£0.4m   £61.7m

 (Reported)

 

   * Adjusted to reflect reclassification of £0.8m of ARR between regions

 

Each region within the Group contributed to the ARR growth, with EMEA &
North America showing an acceleration in growth compared to the prior year. In
the APAC region, the Group saw a strong first half with several encouraging
winbacks from competitors but an increase in competitive pressure in the
second half, particularly in the public sector. Notwithstanding the
challenging environment, the Group continues to see an encouraging pipeline
for further new business and winback opportunities in FY25.

 

The Board expects total revenue for the financial year to be £62.0m,
demonstrating modest constant currency growth (2023: £62.4m reported,
£61.2m(1)) with 96% of revenue being recurring (2023: 95%).

 

The Group's focus on operating model optimisation during the year has helped
it to deliver year on year Adjusted EBITDA growth of 27%, and an improvement
in Adjusted EBITDA margin from 11.9%(1) in 2023 to 14.5% in 2024. It is
expected that Adjusted EBITDA will be approximately £9.0m (2023: £7.3m
reported, £7.1m(1)), in line with consensus expectations(2).

 

Net debt at 30 November 2024 was approximately £4.9m, reflecting significant
additional non-recurring restructuring costs incurred as part of the Group's
effort to accelerate its cost base optimisation programme, along with the
continued unwinding of working capital improvement experienced during FY23.
Since the period end, a number of significant payments from customers have
been received. In addition, the Group has historically seen an improved cash
flow profile in the first half of the year driven by a peak invoicing period
linked to the renewal of customer contracts and the predominantly annual in
advance invoicing terms.

 

Outlook

In 2025, the Board is committed to further enhancement of the Group's
operating model to drive sustainable profitability across the Group and
material cash generation. A key focus will be on the continued execution of
strategic initiatives aimed at optimising operations, including the expanded
use of generative AI to automate processes and improve overall productivity.
Additionally, the finalisation of global systems integrations will be a
critical step in further enhancing operational efficiency and decision-making
capabilities.

 

Collectively, these measures are designed to support a broader goal of
creating more efficient and scalable operations, improving margins and
strengthening the Group's competitive position, thereby contributing to the
long-term growth of the business. The Board is confident that these actions
will create a solid foundation for sustained value creation for shareholders.

 

Joanna Arnold, CEO of the Company, said:

"As the communication landscape becomes increasingly complex, there is a clear
and growing demand for audience intelligence. Pulsar Group's cutting-edge
platform continues to lead innovation in communications, providing
organisations with the critical insights and engagement strategies they need
to navigate these challenges. This need has been amplified by the growing
influence of Artificial Intelligence across media and social channels, and our
technology is uniquely positioned to help clients stay ahead of reputation
risk, information overload and misinformation in this evolving environment.

 

The Board is pleased with the progress achieved in 2024, including
enhancements to the Group's product offerings and continued year on year
growth in Annual Recurring Revenue (ARR) and Adjusted EBITDA margins despite
the ongoing headwinds from the challenging macroeconomic environment.

 

The Group is committed to enhancing profitability and cash generation, having
already achieved substantial cost reductions and with additional cost
optimisation initiatives set for execution in 2025."

 

 

1      On a constant currency basis.

2      The Board understands that consensus expectations for the
Company's Adjusted EBITDA for 2024 is £9.2m adjusted for FX.

 

For further information:

Pulsar Group plc
 
                                                                 020
3426 4070

Joanna Arnold (CEO) / Mark Fautley (CFO)

 

Cavendish Capital Markets (Nominated Adviser and Broker)
 
    020 7220 0500

Corporate Finance:

Marc Milmo / Fergus Sullivan / Elysia
Bough
 

Corporate Broking:

Sunila de Silva

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