REG - TPXimpact Holdings - H1 Trading Update & Disposal of TPXimpact Norway

Tpximpact HoldingsAnnouncement

16/10/2023 07:00

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RNS Number : 1487Q  TPXimpact Holdings PLC  16 October 2023

16 October 2023

TPXimpact Holdings PLC

("TPX", "TPXimpact", or the "Company")

First Half Trading Update & Disposal of TPXimpact Norway

Strong first half trading in line with expectations; full year targets
reiterated

TPXimpact Holdings PLC (AIM: TPX), the technology-enabled services company
focused on people-powered digital transformation, is pleased to provide an
update on its first half trading for the period ended 30 September 2023
("H124") and announce the disposal of TPXimpact Norway AS.

First Half Trading

The Group's strong trading performance in H124 has been encouraging and in
line with management expectations. The Board expects to report first-half
revenues of £41-42 million which would equate to like-for-like(1) revenue
growth of around 20% for H124. Like-for-like(1) Adjusted EBITDA margins are
expected to increase to 4-5% in H124 from less than 3% in H123.

New business wins in H124 amounted to £105 million and the pipeline for new
business remains robust. Net debt (excluding lease liabilities) was c. £13
million at 30 September 2023 (compared with £17.9 million at 30 June 2023)
and the Company has comfortably satisfied its H124 banking covenants.

The Board expects to release the Group's interim results for H124 in early
December 2023 and will provide more detail in due course.

Outlook

The Board reaffirms its FY24 targets of 15-20% like-for-like(1) revenue growth
and Adjusted EBITDA margins of 5-6%. These targets would equate to FY24
revenue in the range of £80-85 million and Adjusted EBITDA in the range of
£4-5 million. Management are targeting net debt (excluding lease liabilities)
to be in the range of £11-12 million at 31 March 2024 and, therefore, a net
debt to Adjusted EBITDA ratio of <2.5x by the end of the financial year, or
shortly thereafter.

The outlook for FY25 is also maintained with like-for-like revenue growth of
10-15% and further margin improvement of 2-3% on top of that achieved in FY24.

(1)Like-for-like performance excludes the Questers business (sold on 15
September 2023) and TPXimpact Norway (sold on 13 October 2023) from H124
results and FY24 targets and comparative figures.

Disposal of TPXimpact Norway AS

The Board has assessed the prospects of the TPXimpact Norway business and
concluded it is unlikely to contribute to the Group's targets for revenue
growth and margin improvement, in part due to a lack of scale that introduces
elevated risk in the event key clients or staff are lost. The Group has
therefore disposed of its equity interests in TPXimpact Norway AS to companies
controlled by the following managing partners of TPXimpact Norway AS: Anders
Rygh (ARygh Holding AS), Geir Ødegård (Produco Invest 1 AS ) and Lars
Christian Torhaug (T5 Invest AS) for a nominal consideration of £1.00. This
disposal is considered a related party transaction and the directors consider,
having consulted with its nominated adviser, that the terms of the transaction
are fair and reasonable insofar as its shareholders are concerned.

The disposal further reinforces the Board's strategy to simplify the business
and focus the Company on its core strengths of Digital Transformation and
Digital Experience in the UK, whilst de-risking the Group's future
performance.

TPXimpact Norway has 12 employees who provide strategic consulting services to
local clients in Norway. For the year ended 31 March 2023, TPXimpact Norway
generated £2.0m of revenue, £0.2m of Adjusted EBITDA and £0.2m of profit
after tax. Gross assets as at 31 March 2023 were £2.7m (including £1.9m of
goodwill and intangible assets).

 

Björn Conway, Chief Executive Officer at TPXimpact, said:

"I am pleased by the progress we have made in the first half of the financial
year in executing our strategy and three-year plan. Trading has improved and
we are beginning to achieve efficiencies across the Group and capitalise on
the sizeable market opportunity available to the Group.

The disposal of TPXimpact Norway, as well as the recent sale of Questers for
£7.5 million, is firmly aligned with our strategic vision for TPXimpact by
enabling us to concentrate our resources and energies around those prospects
within the UK public sector and broader digital transformation market where
there is considerable scope for further growth."

 

- Ends -

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018. The person responsible for this
announcement is Steve Winters, Group CFO.

 Enquiries:

 TPXimpact Holdings PLC           Via Alma PR

 Bjorn Conway, Group CEO

 Steve Winters, Group CFO

 Stifel Nicolaus Europe Limited   +44 (0) 207 710 7600

 (Nomad and Joint Broker)

 Fred Walsh

 Ben Burnett
 Dowgate Capital Limited           +44 (0) 203 903 7715

 (Joint Broker)

 James Serjeant

 Russell Cook
 Alma PR                          +44 (0) 203 405 0209

 (Financial PR)                   tpx@almapr.co.uk

 Josh Royston

 Kieran Breheny

 Matthew Young

 

About TPXimpact

TPXimpact exists to transform the organisations, services and systems that
underpin society and that drive business success. It applies strategic and
creative thinking, technology, innovative design and user-centred approaches
to bring about numerous improvements which together multiply the impact of
change.

The Company works closely with its clients in agile, multidisciplinary teams
that span organisational design, technology, and digital experiences. It
shares a deep understanding of people and behaviours and a philosophy of
putting people and communities at the heart of every transformation.

The business is being increasingly recognised as a leading alternative digital
transformation provider to the UK public services sector, with 72% of its
client base representing the public sector and 28% representing the commercial
sector in the year ended 31 March 2023.

More information is available at www.tpximpact.com (http://www.tpximpact.com)
.

 

 

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