TIDMDOTD
RNS Number : 6814T
dotDigital Group plc
26 July 2022
Dotdigital Group plc
( "Dotdigital" or the "Group")
FY22 Trading Update
Growth across all key global regions and strong
profitability
Dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of
an omnichannel marketing automation and customer engagement
platform, is pleased to provide the following trading update for
the year ended 30 June 2022 (FY22), ahead of the publication of its
full year results in November. The trading performance in this
statement is based on unaudited management accounts.
Highlights
-- Revenue at the top end of range given at half year and
in line with market expectations, growing by c.8% to GBP62.8m
(2021: GBP58.1m) (1)
o Recurring revenue as a percentage of total revenue of
94% (2021: 93%)
o ARPC (2) continued its upward trend, growing by 17%
from approximately GBP1,251 per month to GBP1,461 per
month;
o Functionality recurring revenue (from license fees,
data and enhanced bolt-on functionality) grew 18% to GBP22.3m
(2021: GBP18.9m);
o Revenues from customers using a data connector from
strategic partners up 14% to GBP28.9m (2021: GBP25.4m)
-- Adjusted EBITDA (3) and adjusted operating profit (4)
are both expected to be ahead of market expectations;
-- Strong cash generation through the period with cash balance
of GBP43.9m on 30 June 2022, confirming the resilience
of our model and providing the flexibility to invest in
the growth strategy;
-- Email Messaging volumes up 22% in the year to 29.4bn from
24.1bn;
-- Intention to pay a final dividend in line with policy,
with the expected pay-out linked to EBITDA growth;
-- Strong financial performance in Q4 with sales momentum
continuing into the new financial year
Notes
1.Market Consensus for revenue for the year ended 30 June 2022
is GBP62.6m
2. ARPC means Average Revenue Per Customer (including new
customers added in period and existing customers)
3. EBITDA is earnings before interest, tax, depreciation and
amortisation and adjusted for acquisition costs and share-based
payments
4. Operating profit is adjusted for acquisition costs and
share-based payments
Overview
The Board is pleased to report a strong commercial performance
and growth across all key global regions in the year to 30 June
2022 having addressed the challenges of the first half.
A particular highlight of the last six months has been the
progress we have made in building out our team in North America,
with management now in place to lead the execution of our growth
strategy in the region. We have also been successful in recruiting
new talent beyond the senior team. Competition for labour remains
high, however, we are seeing improvements in conditions across our
territories, with several of our competitors now focused on
controlling their substantial overheads.
In the period, we continued to see an acceleration in the shift
towards digital marketing across industries as consumers become
more and more demanding of relevant and personalised experiences
and businesses become more aware of the potential for capturing
additional value from new and existing customers through using
tools like Dotdigital's Engagement Cloud.
Customers are increasingly adopting an omnichannel approach,
with email remaining strong in terms of growth and importance to
our customers in their overall marketing strategies. Email volumes
grew 22% in the period, as budgets increase, and industries start
to normalise post pandemic.
Both the B2B and B2C markets are increasingly moving towards
data, platform adoption and automation, which are areas Dotdigital
has invested heavily in, and where it excels. With a massive
ongoing shift in consumer behaviour towards digital channels and
cost effectiveness and measurability becoming more and more
desirable to marketeers, digital marketing budgets as a proportion
of overall marketing budgets are only likely to continue to grow,
creating a favourable backdrop for Dotdigital.
We are pleased that John Conoley has joined as Non-Executive
Chair bringing a wealth of experience in growing international
companies to the Dotdigital Board. We are making good progress in
identifying a new Chief Financial Officer and will update the
market on this appointment in due course.
Outlook
With the challenges of the first half of the year addressed,
particularly in the US, and on the back of a strong end to the
period, we enter the new financial year with confidence. We
continue to invest in the business, in line with budget, with a
focus on internal talent development, building our partner network
and ensuring we have the right infrastructure in place to drive
international growth opportunities.
The uncertain external environment will need to be monitored
carefully, but market trends continue to develop in our favour and
our product is built to meet and surpass the needs of modern
marketeers. With a diverse customer base, healthy customer
retention levels, strong pipeline, and talented teams in place
across our territories to deliver against our strategy, we are
optimistic about achieving continued strong sales and profitability
growth in FY23 and beyond.
Milan Patel, CEO of Dotdigital, commented:
"The Group has delivered a strong trading period, with growth at
the top end of expectations and profitability ahead of
expectations.
"The market opportunity remains buoyant, underpinned by the
structural move to digital marketing. According to the 28th Edition
of The CMO Survey published in February 2022, digital marketing
spend, which currently accounts for 57.1% of marketing budgets, is
expected to grow by 16.2% over the next year. Our best-in-class
Engagement Cloud is ideally positioned to support a growing and
diversified customer base, the value of which is demonstrated
through our consistently high retention rates and increasing
functionality revenues.
"We remain cognisant of broader macro-economic uncertainty but
enter the new financial year in a position of strength across our
markets. Supported by high levels of recurring revenue and strong
profitability, we remain focused on executing against each pillar
of our growth strategy: Product Innovation, Geographic Expansion,
and Strategic Partnerships. We look forward to the future with
confidence."
For further information please contact:
Dotdigital Group Plc Tel: 020 3953 3072
Milan Patel, CEO InvestorRelations@dotdigital.com
George Kasparian, Group Finance
Director
Alma PR (Financial PR) Tel: 020 3405 0210
Hilary Buchanan dotdigital@almapr.co.uk
Josh Royston
David Ison
Canaccord Genuity (Nominated Advisor Tel: 020 7523 8000
and Joint Broker)
Bobbie Hilliam
Georgina McCooke
Jonathan Barr, Sales
finnCap (Joint Broker) Tel: 020 7220 0500
Jonny Franklin Adams, Corporate
Finance
Alice Lane, ECM
Rhys Williams, Sales
Singer Capital Markets (Joint Broker) Tel: 020 7496 3000
Shaun Dobson, Chairman of Corporate
Finance
Alex Bond, Corporate Finance
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END
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