REG - dotDigital Group plc - Trading Update & Notice of Half Year Results

dotDigitalAnnouncement

31/01/2024 07:00

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RNS Number : 4367B  dotDigital Group plc  31 January 2024

31 January 2024

Dotdigital Group plc

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

 

Trading Update & Notice of Half Year Results

 

Dotdigital Group plc (AIM: DOTD), the leading SaaS provider of an all-in-one
customer experience and data platform (CXDP), announces a trading update for
the six months ended 31 December 2023 ("H1 2024"). The trading performance
reported in this statement is based on unaudited management accounts.

 

Highlights

 

 ·             Revenue tracking in line with market expectations for the full year, with H1
               2024 up by 15% to £38.7m (H1 2023: £33.8m)(1)
 ·             Organic revenue increased by 11% in constant currency (9% reported to £36.9m)

               Adjusted profit before tax tracking in line with market expectations for the
               full year(2)
 ·             Fresh Relevance integration on track, with cost synergies slightly ahead of
               schedule and first new joint customers won
 ·             Functionality recurring revenue (licence, data charges and additional
               functionality) up by 8% to £13.2m (H1 2023: £12.2m)
 ·             Organic average revenue per customer (ARPC) (excluding Fresh Relevance) growth
               of 8% to £1,700 continues in line with customer revenue growth
 ·             Cash balance on 31 December 2023 of £37.1m (31 December 2022: £49.6m), in
               line with expectations post-acquisition of Fresh Relevance(2) and reflecting
               usual working capital cycles

 

Overview

 

The Board is pleased to report that trading and financial performance for the
first half of the year was in line with Board expectations, with prior year
investment in the Group's product portfolio and operations driving stronger
traction with higher value customers and increased bookings.

 

The integration of Fresh Relevance, acquired in September 2023 is progressing
on track. Significant strides have already been made to position the combined
businesses for scalable growth, including development of a unified onboarding
process, implementation of a single sign-on and the establishment of a joint
go-to market strategy.

 

A key rationale behind the acquisition was to grow the Group's addressable
market and increase traction with higher value customers. Encouragingly, the
addition of Fresh Relevance has already led to new direct deals with new
customers in larger size brackets and the pipeline continues to grow. In line
with another important objective for the Group, initial uptake of the
personalisation platform by existing Dotdigital customers has been good.

 

The Group is pleased to report growth in all regions. The largest, EMEA,
continues to grow in line with expectations as customers move toward
comprehensive, all-in-one solutions. APAC maintains its trajectory of strong,
double-digit growth following previous investment. Commercial progress in
North America continues to accelerate from FY23 levels, with percentage sales
growth in the high single digits and a growing pipeline of opportunities.

 

Revenue from strategic partnerships continued to grow, albeit more modestly
than in H1 2023, with growth in CRM connectors offset by continued subdued
activity through the larger ecommerce connectors.

 

Outlook

 

As we enter the second half, trading conditions remain positive. While
cognisant of wider macroeconomic pressures, the demand for impactful and
efficient digital marketing capabilities is growing as organisations across
industries look to attract, convert and retain customers. The investment we
have made in enhancing our product offering as we build out our comprehensive
CXDP platform, infusing AI, personalisation and omni-channel functionality,
strengthens our market position and leaves us well placed for the future.

 

Notice of Half Year Results

 

The Group expects to announce its results for the six months ended 31 December
2023 on 5 March 2024.

 

Milan Patel, CEO of Dotdigital, commented:

 

"We have successfully delivered strong growth, achieved a higher ARPC, and
increased bookings in the period. I am encouraged by the momentum that is
building in the US, whilst EMEA and APAC continue to be in great shape, albeit
at different stages of development.

 

The Fresh Relevance acquisition is every bit the fit we hoped it would be. Our
teams have gelled well and the initial work on combining the technology has
been completed. It's testament to the speed and quality of the integration
that we are already making meaningful headway together with our combined
offering with higher value organisations.

 

We are feeling positive going into the second half. Of course, macroeconomic
uncertainties are likely to persist but, with strength across all regions, an
increasingly compelling product and market trends that work in our favour, we
enter it with confidence."

 

(1) Market consensus for revenue for the year to 30 June 2024 is £78.5m.

(2) Market consensus for adjusted profit before tax for the year to 30 June
2024 is £15.7m. Adjustments include share based payments, acquisition costs
and other exceptional items.

 

 

For further information please contact:

 

 Dotdigital Group Plc                                    Tel: 020 3953 3072

Milan Patel, CEO

Alistair Gurney, CFO                                   investorrelations@dotdigital.com (mailto:investorrelations@dotdigital.com)

 Alma Strategic Communications                           Tel: 020 3405 0210

 Hilary Buchanan                                         dotdigital@almastrategic.com

 David Ison

 Kieran Breheny

 Canaccord Genuity (Nominated Advisor and Joint Broker)  Tel: 020 7523 8000

Bobbie Hilliam, Corporate Finance

 Jonathan Barr, Sales

 Cavendish Capital Markets Limited (Joint Broker)        Tel: 020 7220 0500

Jonny Franklin Adams, Corporate Finance

 Sunila de Silva, Equity Capital Markets

 Singer Capital Markets (Joint Broker)                   Tel: 020 7496 3000

Shaun Dobson, Corporate Finance

 Alex Bond, Corporate Finance

 

About Dotdigital

 

Dotdigital Group plc (AIM: DOTD) is a leading provider of cross-channel
marketing automation technology to marketing professionals. Dotdigital's
customer experience and data platform (CXDP) combines the power of automation
and AI to help businesses deliver hyper-relevant customer experiences at
scale. With Dotdigital, marketing teams can unify and enrich their customer
data, identify valuable customer segments, and deliver personalised
cross-channel customer journeys that result in engagements, conversions, and
loyalty.

 

Founded in 1999, Dotdigital is headquartered in London with offices in
Croydon, Manchester, New York, Melbourne, Sydney, Singapore, Tokyo, Amsterdam,
Cape Town, and Warsaw. Dotdigital's solutions empower over 4,000 brands across
150 countries.

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