REG - TPXimpact Holdings - Q3 Trading Update

Tpximpact HoldingsAnnouncement

12/02/2024 07:00

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RNS Number : 7130C  TPXimpact Holdings PLC  12 February 2024

12 February 2024

TPXimpact Holdings PLC

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

Q3 Trading Update

Trading in line with achieving full year targets

TPXimpact Holdings PLC (AIM: TPX), the technology-enabled services company
focused on people-powered digital transformation, provides an update on
trading for the three months ended 31 December 2023 ("Q3").

 

Q3 trading

The Board is pleased to confirm that trading in Q3 was in line with achieving
the Company's financial targets for the current financial year (FY24). On a
like-for-like basis, third quarter revenues were up 32% to £20.2 million and
year-to-date revenues were up 25% to £61.8 million. New business won in the
first nine months of the year amounted to £130 million, including £25
million of wins in Q3, and the pipeline for new projects remains encouraging.

 

Net debt (excluding lease liabilities) at 31 December 2023 decreased to £10.7
million from £12.8 million at 30 September 2023, reflecting effective working
capital management. The ratio of net debt to Adjusted EBITDA, on a rolling 12
month basis, reduced to below 3.0x and the Group comfortably satisfied its
banking covenants.

 

Management have continued to simplify the business by establishing the Digital
Transformation platform, which will bring together the combined talents of our
Consulting, Data & Insights and RedCortex teams. Digital Transformation
will officially be launched on 1 April 2024. TPXimpact will then comprise
three businesses (Digital Transformation, Digital Experience and KITS), making
the Group more focused, more efficient and easier to navigate for clients and
all our stakeholders.

 

Current year outlook

As previously announced, management are targeting FY24 revenue in the range of
£80-85 million (equivalent to like-for-like revenue growth of 15-20%) and
Adjusted EBITDA in the range of £4-5 million (an Adjusted EBITDA margin of
5-6%). In addition, management are targeting net debt (excluding lease
liabilities) of around £11 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.

 

FY25 outlook

The Company is currently undertaking its budgeting process for FY25 and will
provide more specific guidance in due course. However, the Board currently has
no reason to amend the existing targets of like-for-like revenue growth of
10-15% and further margin improvement of 2-3% on top of that expected to be
achieved in FY24. Committed (or backlog) revenues currently stand at
approximately £65 million in respect of FY25 (compared with £50 million at
the same time last year in respect of FY24). This 30% increase in committed
revenues provides a solid foundation for the next financial year,
notwithstanding the possible disruption and uncertainty that may arise from a
general election.

 

 

Bjorn Conway, Chief Executive Officer, commented:

 

"I am pleased by the progress in executing our strategy in Q3 and the
continuing improvement in the financial performance of the business. We remain
on track to meet our targets for the current financial year. I was also
delighted by our certification as a B Corporation (B-Corp) announced on 9
January, reinforcing our commitment to being a responsible and sustainable
business, as well as a profitable one.

 

"Although our budgeting process is still underway, the extent of committed
revenues for next year provides a solid foundation for achieving next year's
targets as they currently stand, building on our impressive new win rate this
year and the successful execution of our strategy and three-year plan. The
outlook remains positive, irrespective of the short-term uncertainty that may
occur due to a general election, and I am grateful to all our people for their
efforts and commitment to our goals and values."

 

 

(1 )

Unless otherwise stated financial measures are based upon the results of
continuing operations.

(2 )In measuring our performance, the financial measures that we use include
those which have been derived from our reported results in order to eliminate
factors which distort period-on-period comparisons. These are considered
non-GAAP financial measures, and include measures such as like-for-like
revenue, adjusted EBITDA and net debt. These alternative performance measures
are defined in note 28 of the Group's consolidated financial statements for
the year ended 31 March 2023.

 

 

 

 

Enquiries:

 TPXimpact Holdings

 Bjorn Conway, CEO                Via Alma Strategic

 Steve Winters, 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 Strategic Communications    tpx@almastrategic.com

 (Financial PR)                   +44 (0) 203 405 0209

 Josh Royston

 Kieran Breheny

 About TPXimpact

We believe in a world enriched by people-powered digital transformation.
Working in collaboration with organisations, we're on a mission to accelerate
positive change and build a future where people, places and the planet are
supported to thrive.

Led by passionate people, TPXimpact works closely with its clients in agile,
multidisciplinary teams; challenging assumptions, testing new approaches and
building confidence and capabilities. Combining our rich heritage with
expertise in human-centred design, data, experience and technology, we work to
create sustainable solutions with the flexibility to learn, evolve and change.

The business is being increasingly recognised as a leading alternative digital
transformation provider to the UK public services sector, with over 90% of its
client base representing public services.

More information is available at www.tpximpact.com.

 

 

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