TIDMDOTD
RNS Number : 3040L
dotDigital Group plc
18 July 2017
FOR IMMEDIATE RELEASE 18 July 2017
dotdigital Group plc
("dotdigital" or the "Company")
Trading Update
"Strong organic growth in line with market expectations"
dotdigital Group plc (AIM: DOTD), the leading provider of
intuitive email and marketing automation software as a service
("SaaS") and managed services to empower digital marketing
professionals, today gives a trading update prior to the Company's
full results for the year ended 30 June 2017. The trading
performance in this statement is based on unaudited initial
management estimates.
Highlights:
-- Overall revenues grew by 19% organically to approximately GBP32.0m (FY16: GBP26.9m);
-- EBITDA* is expected to be in line with market expectations;
-- Monthly recurring revenues from dotmailer's SaaS-based usage
up approximately 23% to GBP26.0m (FY16: GBP21.1m);
-- Strong cash balances at 30 June 2017 of GBP20.4m (FY16: GBP17.2m);
-- Growth of 48% in revenue outside of the UK;
-- Recurring revenue now represents 81% of group revenues , of which 90% is contracted;
-- Professional services revenues grew by 6% to GBP3.3m (FY16:
GBP3.1m), representing approximately 10% of group revenues;
-- Average revenue per client continued its upward trend,
growing by 24% from approximately GBP575 to GBP715 per month;
-- Total revenue earned from clients using the Magento connector
has increased by 56% to GBP6.7m (FY16: GBP4.3m);
-- The total number of emails sent by the dotmailer platform
grew by 38% to 11.9 billion (FY16: 8.6 billion), reflecting the
change in the mix of clients;
-- Margins have been maintained partially as a result of our
technology architecture migration to the cloud; and
-- Revenue from enhanced functionality charges rose by 53% to GBP6.3m.
A summary of approximate revenues by region for the full year to
30 June 2017 is provided below:
12 Months 12 Months Growth
ended 30 ended 30
June 2017 June 2016
EMEA GBP27.4m GBP23.7m 15%
North America GBP3.9m GBP2.9m 36%
APAC GBP0.7m GBP0.3m 156%
Total GBP32.0m GBP26.9m 19%
* EBITDA is the profit before tax adjusted for depreciation,
amortisation, finance income, finance expenses relating to share
option schemes
dotdigital's organic growth strategy continues to be focussed
around three core areas:
-- Product innovation
-- Geographic expansion
-- Developing strategic partnerships
In the 12 months to 30 June 2017, key performance highlights
against these three areas were:
Product Innovation
-- Recurring revenue charges from enhanced product functionality
options and upgrades to both existing clients and new clients has
increased by 53% compared with the same period last year. Recurring
revenues from enhanced product functionality now represents annual
revenues of GBP6.3m.
-- We continued to invest in the development of existing
connectors as well as develop new ecommerce and CRM platform
connectors with a particular emphasis on ecommerce platforms. In
the year, we have launched connectors into Shopify, Big Commerce,
Woo Commerce and Shopware increasing our addressable market in the
UK and overseas.
-- We have invested in our technology through the addition of
headcount in our software development team. This will allow us to
accelerate functionality development and allow us to continue to
have new innovative functionality giving us technology advantages
over our competitors.
-- Another area of product development during the year included
enhancing our "self-service"/"self-sign-up" proposition which will
allow us to conduct low cost pilots in new international markets.
This provides low cost feasibility testing of new markets thus
allowing us to assess market, pricing, resourcing and any marketing
strategy. This functionality will also create opportunities to
integrate a white-labelled version of dotmailer into more of the
high-volume e-commerce platforms.
Geographic Expansion
North America
-- Revenue from the US region was up 16% to US$5.0m for the full
year following successful changes during the period. H2 grew by 22%
compared to 11% in the first half (in constant currency). The sales
pipeline in the region continues to build strongly whilst we
continue to broaden out the sales proposition to include other
ecommerce platform connectors.
APAC
-- Overall revenue growth within the APAC region increased by
approximately 112%, from AUS$0.6m to AUS$1.2m, due to having a
direct sales approach to the market. The team for the APAC region
has also been further strengthened by support, a customer success
team and marketing.
-- We continued to develop stronger relationships with our
Australian partners with new partners coming on-board across the
APAC region. More focus has been given to Singapore where we have
signed several partners and clients.
-- Overall, whilst APAC is still in its early days of growth, we
are optimistic about the opportunities in the region and will
continue to focus on ecommerce customers and our CRM
integrations.
EMEA
-- Revenue from the EMEA region was up 15% to GBP27.3m from GBP23.8m.
-- H2 growth increased by 18% compared to 13% in H1, as a result
of improved sales lead optimisation and increased customer
satisfaction.
-- Although it is still early days, continued focus in the
Nordics and Benelux region has resulted in us signing up strong
partners and a growing number of direct customers coming from those
territories. Early signs are promising for this market.
Developing Strategic Partnerships
Magento: We continued to invest in the development of the
Magento Connector and the Magento partner relationship. The
connector is now used by over 460 clients generating annualised
recurring revenues of more than GBP6.2m. Though the initial uptake
for Magento 2.0 was slower than expected we saw an increase of new
customer sign ups using the connector in H2 with a good sales
pipeline after Magento released version 2.1. The average revenue
per month from Magento customers increased by 6% to GBP1,420 per
month.
Salesforce and Microsoft Dynamics: As part of our commitment to
our customers in the B2B marketing space we continued to add new
functionality and build on our strategic relationships with the
system integrators. These connectors are now used by over 440
clients generating annualised recurring revenues of more than
GBP4.2m. The average revenue per month from these customers is
approx. GBP1,000 per month.
Other ecommerce connectors: We have continued to develop
relationships with other ecommerce integration partners and will
maintain this development as we go into the next financial
year.
Milan Patel, CEO & CFO of dotdigital, commented:
"After my first full year as CEO I am delighted to announce
strong organic revenue growth of 19% and a strong cash position.
This illustrates that our profitable organic growth strategy
continues to perform well on the three key aspects of product
innovation, geographic expansion and now developing strong
strategic partnerships. I am also satisfied that the building
blocks are now in place for a strong performance over the next 12
months.
The dotmailer platform continues to evolve and innovate,
providing highly sophisticated yet 'easy-to-use' marketing
automation tools that empower our clients and this we believe is
part of the true essence of our continued success.
Alongside our organic growth strategy, we will continue to look
for acquisitions of an earnings enhancing or strategic nature that
could add to dotmailer's platform capabilities.
We look forward to providing a full update on the year's trading
and our continued growth strategy when we announce our full year
results in mid-October.
I would like to take this opportunity to thank our staff for the
tremendous enthusiasm and commitment they have shown in the past
year, in embracing the changes we have made and in supporting me to
drive the business forward, together with our shareholders for
their continued support."
For further enquiries please contact:
dotdigital Group Plc Tel: 020 8662
Milan Patel, CEO & CFO 2777
Financial PR and Investor Tel: 07721 413
Relations 496
Lisa Baderoon
Lisa.Baderoon@dotmailer.com
N+1 Singer (Nominated Adviser Tel: 020 7496
and Joint Broker) 3000
Shaun Dobson, Head of Corporate
Finance
Liz Yong, Corporate Finance
finnCap (Joint Broker) Tel: 020 7220
Stuart Andrews, Head of Corporate 0500
Finance
Rhys Williams, Head of Sales
Ends
This information is provided by RNS
The company news service from the London Stock Exchange
END
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