REG - dotDigital Group plc - Trading Update

dotDigitalAnnouncement

29/07/2024 07:00

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RNS Number : 1125Y  dotDigital Group plc  29 July 2024

29 July 2024

Dotdigital Group plc

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

 

Trading Update

 

A year of financial and strategic progress

 

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 year ended 30 June 2024 ("FY 2024"). The trading performance reported in
this statement is based on unaudited management accounts.

 

Highlights

 

 ·             Revenue and Adjusted EBITDA and profit before tax are expected to be in line
               with market expectations for the full year(1)
 ·             Revenue growth of 14.1% to £79.0m (FY23 £69.2m), of which 94% is recurring
               and repeat revenue (FY23: 94%)
 ·             Organic revenue (excluding Fresh Relevance which was acquired during the year)
               increased by 9% in constant currency (7% on a reported basis) to £74.3m
 ·             Organic average revenue per customer (ARPC) (excluding Fresh Relevance) growth
               of 15% to £1,861 per month continues in line with customer revenue growth
 ·             Cash balance on 30 June 2024 of £42.2m (31 December 2023 of £37.1m) is ahead
               of market expectations, following strong cash generation, providing the
               flexibility to invest in the organic and acquisition growth strategy
 ·             Intention to pay increased final dividend in line with market expectations
 ·             Integration of the Fresh Relevance teams, operations and product now complete
               and driving pipeline growth

 

Overview

 

The Board is pleased to report a strong performance for the year delivering
both organic and acquisitive growth.

 

A highlight of the year has been the substantial advancements delivered to the
Group's CXDP offering through continued internal development as well as the
integration of Fresh Relevance, bringing enhanced personalisation
functionality to the platform. The integration of the Fresh Relevance team,
product and operations have been completed, along with associated cost
synergies realised ahead of plan.

 

The expanded product offering, including website personalisation and enhanced
AI and customer data platform capabilities has resulted in accelerating
traction with higher value customers, including increased joint new customers
wins in H2, as well as strong uptake of the personalisation platform by
existing Dotdigital customers, driving a 15% increase in ARPC.

 

The Group saw double-digit growth across its geographic markets. Growth in
EMEA of 14% was supported by the acquisition of Fresh Relevance.  Average
first year contract values in EMEA increased 58% year on year, although
organic growth was tempered by elevated churn levels due to macro-economic
pressures which particularly affected some of our smaller customers.  APAC
continues to be a standout performer, with 27% revenue growth driven by larger
deals in Japan and ANZ. North America continues its positive progress with a
return to double-digit organic growth (16% including acquired Fresh Relevance
revenues) and a strong pipeline of opportunities.

 

The Group's partnership program has grown substantially with over 600 active
agency partners and 190 tech partners increasing our serviceable addressable
market and providing a continuous flow of new engagements.

 

Outlook

 

The Group enters the new financial year with continued positive momentum.
Wider macro global conditions remain challenging, but due to the diversity of
our revenue base and the low dependence we have on individual customers, the
impact of this has been limited.  We are seeing growing evidence that the
investment we have made into our product offering is yielding results,
particularly in respect of average new logo values and pricing power.

 

With strong new business prospects, high levels of recurring revenue and a
robust financial position, the Board remains confident in the Group's growth
prospects.

 

Milan Patel, CEO of Dotdigital, commented:

 

"We are pleased to provide an update on a year of significant strategic
progress for the Group alongside continued financial growth. Having laid out
our CXDP vision two years ago, we have transformed our platform through the
acquisition of Fresh Relevance and a number of important technology
enhancements to elevate our competitive differentiation and expand our market
reach. We continue to make further enhancements to benefit our customer's
needs and drive more organic growth.

 

"Entering the new financial year, the outlook remains positive as marketing
teams continue to transition to all-in-one product capabilities with
demonstrable ROI. At the same time, our strong net cash position provides the
resource to continue investment in organic and inorganic opportunities where
appropriate."

 

(1) Market expectation for the year to 30 June 2024 is as follows:

-       Revenue £78.7m

-       Adjusted profit before tax £16.4m

-       Adjusted EBITDA £24.0m

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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