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RNS Number : 3155Z
Gresham Technologies PLC
11 January 2024
11 January 2024
Gresham Technologies plc
FY23 Trading Update and Notice of Results
Growth in strategic subscription business driving recurring
revenues and enhanced profitability
Gresham Technologies plc (LSE: "GHT", "Gresham", "Group",
"Company"), the leading software and services company that
specialises in providing solutions for data integrity and control,
banking integration, payments and cash management, is pleased to
provide a trading update for the financial year ended 31 December
2023 ("FY23").
The Board is pleased to report a strong close to the year. In
December, contracts for initial deployments with two new Control
customers were signed including a Tier 1 global investment bank and
one of the world's largest sovereign wealth funds. In addition, an
agreement has been reached with two recently merged tier one bank
customers for the adoption of Control as standard across the
combined business operations providing a high level of certainty
over existing recurring revenues.
The Group expects to report:
-- Group revenues of GBP49.0 million up 1%, or 3% on a constant
currency basis over FY22
-- Clareti revenues of GBP37.8 million up 6%, or 8% on a
constant currency basis over FY22
-- Clareti recurring revenues of GBP29.6 million up 8%, or
10% on a constant currency basis over FY22
-- Group Adjusted EBITDA(1) and Group cash EBITDA(2) at least
in line with current market expectations(3) with margins
improving over the prior year
-- Forward-looking Clareti Annualised Recurring Revenue ("ARR")
as at 31 December 2023 of GBP29.5 million (up 5% on FY22)
or GBP30.4 million on a constant currency basis (up 8%
on FY22)
-- Cash and cash equivalents at 31 December 2023 of GBP4.8
million with no debt (FY22: GBP6.3 million) ahead of market
expecations(3)
The Group continues to see growing demand for its strategic
Clareti business. Forward-looking Clareti ARR grew from GBP28.1
million at the end of the prior year to GBP30.4 million on a
constant currency basis, standing at GBP29.5 million on an actual
currency basis as at 31 December 2023. New sales and improving ARR
net retention rates generated constant currency net increases to
ARR totalling GBP2.3 million, which was offset by GBP0.9 million of
foreign exchange movements.
In line with plans announced on 17 November 2023, at the end of
FY23 the Group exited the vast majority of its legacy Australian IT
services sub-contracting business. This further accelerates the
Group's transformation to a pure-play SaaS company focussed on
higher margin cash-generative Clareti solutions.
The Group finished the year with net cash and cash equivalents
of GBP4.8 million and no debt, ahead of market expecations (3) .
This is after the payment of GBP3.8 million for the final deferred
consideration in relation to the acquisition of Electra, and a
one-off working capital movement due to cessation of the legacy IT
services sub-contracting business of GBP1.8 million.
The North American business made a particularly strong
contribution during the year with Clareti growth from new customers
and upsell and cross-sell into the existing installed base. The
European business was slower than expected during the first half of
the year with momentum building in the second half driving a
much-improved pipeline into 2024.
The Board is pleased the Company was able to navigate the
challenging global macroeconomic conditions affecting the financial
services sector, and FX headwinds, to deliver Group revenue and
earnings in line with, and cash ahead of, market expectations. The
business starts the year with over GBP38 million of Group revenues
already under contract and a strong pipeline of opportunities. The
Board is confident in the Company's ability to deliver planned
growth which, supported by cost reduction initiatives during FY24,
will further accelerate the business towards its objective of
best-in-class EBITDA margins and cash generation in FY25, and
beyond.
Notice of Results
The Group expects that its audited results for FY23 will be
announced on Tuesday, 16 April 2024.
Ian Manocha, CEO, commented:
"We are pleased to report another year of growth for the Clareti
business with the committed margin improvements coming through to
deliver enhanced cash profitability in line with plans. We also
improved upon all gross and net revenue retention measures within
our installed base and signed eight new logo customers evidencing
the value of our differentiated technology.
There is good momentum coming into the year with a strong
pipeline of opportunities at varying stages of negotiation. This,
alongside other growth and cost management initiatives, provides us
with a high degree of confidence in delivering further profitable
growth in the coming years."
(1) Earnings Before Interest, Taxation, Depreciation and
Amortisation adjusted to add back share-based payment charges and
exceptional items and including continuing operations only.
(2) Group Adjusted EBITDA less capitalised development spend and
any IFRS 16 lease related cash payments.
(3) The Company believes that current market expectations for
the year ending 31 December 2023 are Group revenues of GBP50.2m,
Group adjusted EBITDA of GBP11.0m and Group cash EBITDA of
GBP4.6m.
Enquiries
+44 (0) 207 653
Gresham Technologies plc 0200
Ian Manocha / Tom Mullan
Singer Capital Markets (Financial Adviser and +44 (0) 207 496
Broker) 3000
Shaun Dobson / Tom Salvesen / Jen Boorer
+44 (0) 203 405
Alma Strategic Communications 0205
Josh Royston / Hilary Buchanan / Matthew Young
Inside information
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
Note to editors
Gresham Technologies plc is a leading software and services
company that specialises in providing real-time solutions for data
integrity and control, banking integration, payments and cash
management. Listed on the main market of the London Stock Exchange
(GHT.L) and headquartered in the City of London, its customers
include some of the world's largest financial institutions and
corporates, all of whom are served locally from offices located in
the UK, Europe, North America and Asia Pacific.
Gresham's award-winning Clareti software platform is a highly
flexible and scalable platform, available on-site or in the cloud,
designed to address today's most challenging financial control,
risk management, data governance and regulatory compliance
problems. Learn more at www.greshamtech.com.
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END
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