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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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dotDigital Group Plc | AQSE:DOTD.GB | Aquis Stock Exchange | Ordinary Share | GB00B3W40C23 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 86.50 | 73.00 | 100.00 | 86.50 | 86.50 | 86.50 | 0.00 | 07:01:18 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMDOTD
RNS Number : 4626D
dotDigital Group plc
03 March 2022
3 March 2022 Dotdigital Group plc ("Dotdigital" or the "Group") Interim results for the six months ended 31 December 2021 Dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of an omnichannel marketing automation and customer engagement platform, announces its unaudited interim results for the six months ended 31 December 2021 ("H1 2022"). Financial Highlights -- Organic revenue up by 10% to GBP30.9m (H1 2021: GBP28.2m) driven by growth in sales from both new and existing customers * Recurring revenue as a percentage of total revenue increased to 94% ( 30 June 2021: 93%) * Monthly ARPC(1) up by 19% to GBP1,422 per month (H1 2021: GBP1,196 per month) -- Adjusted EBITDA(2) grew 17% to GBP12.2m (H1 2021: GBP10.5m) and adjusted operating profit(3) grew 17% to GBP8.9m (H1 2021: GBP7.6m) -- R&D continues to underpin Dotdigital's growth strategy, with recurring revenues from enhanced product functionality growing by 22% to GBP10.8m (H1 2021: GBP8.9m) -- Strong net cash balance as of 31 December 2021 of GBP40.0m (30 June 2021: GBP32.0m) Operational Highlights -- International revenue increased by 4% to GBP9.7m (H1 2021: GBP9.3m), with international sales representing 31% to total revenue (H1 2021: 33%) -- Strengthening of strategic partnerships in both ecommerce and CRM, with sales through connectors increasing by 9% to GBP13.9m (H1 2021: GBP12.8m) -- Significant enhancements, such as single customer view and program analytics and reporting, to the Dotdigital platform, driving new growth opportunities and deepen existing customer relationships Current Trading and Outlook -- Unwinding of customer buying behaviour in post-lockdown environment, with reduced growth in demand for SMS, and macro headwinds affecting international activities as previously highlighted. The Board now expects full year revenue growth to be slower than previous expectations during the current and future financial years -- The Group is committed to investing in its people and its culture, in an increasingly competitive global labour market, in order to continue to achieve year on year revenue growth Milan Patel, CEO of Dotdigital, commented: "The Group delivered a first half performance of strong growth and profitability driven by new customer wins and expanded use of the platform across the existing customer base. Our consistent strategy continues to support our growth ambition in what is a significant market opportunity. "Although we appear to be moving away from the worst of the pandemic, it triggered a dramatic acceleration in organisations' adoption of digital marketing that is set to endure, and the strength of our platform puts us in an ideal position to benefit from that trend. Whilst we continue to navigate through market challenges, particularly related to hiring, and adjust to a post-lockdown environment, the Board is committed to investing in our teams in line with the growth opportunity available, supported by a strong financial position and recurring SaaS business model." Investor Presentation : https://www.dotdigitalgroup.com/events-presentations/ Live presentation to investors: Management will host a live presentation to investors via the Investor Meet Company platform on 4 March at 4pm UK time. Investors who already follow Dotdigital on the platform will automatically be invited, others are invited to register in advance via the following link: https://www.investormeetcompany.com/dotdigital-group-plc/register-investor . Notes 1. ARPC means Average Revenue Per Customer (including new customers added in period and existing customers) (2. EBITDA is earnings before interest, tax, depreciation and amortization and adjusted for acquisition costs and share-based payments) (3. Operating profit is adjusted for acquisition costs and share-based payments) For further information please contact: Dotdigital Group plc Tel: 020 3953 3072 Milan Patel, CEO InvestorRelations@dotdigital.co m Alma PR (Financial PR) Tel: 020 3405 0210 Hilary Buchanan dotdigital@almapr.co.uk David Ison Kieran Breheny 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 Stuart Andrews, Corporate Finance Alice Lane, ECM Rhys Williams, Sales Singer Capital Markets (Joint Broker) Tel: 020 7496 3000 Shaun Dobson, Head of Corporate Finance Alex Bond, Corporate Finance THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. OPERATIONAL REVIEW Introduction For the first half period the Group delivered solid growth in a more normalised trading environment against a strong comparative period in the prior year. The marketing industry's march towards digital continues at pace, and while the mix of channel usage ebbs and flows, our omnichannel offering positions us well to capture the full range of opportunities it presents. The focus in the first half of 2022 has been on cementing our position as one of the leading marketing automation platforms through enhancing the functionality of our Engagement Cloud, deepening our strategic
partnerships and hiring exciting talent to build demand across our territories among both new and existing customers. We continue to be trusted by household names to help them engage with and get closer to their audiences. In the period, we signed Warner Bros, Sunderland Football Club, and the British Dental Association as new customers, and the pipeline for the second half remains healthy. We continue to invest in product innovation, geographic expansion and strategic partnerships - the three components of our growth strategy - to grow our share of the market while protecting our strong margins. Demand for our platform is growing globally, underpinned by a robust, pureplay SaaS model, which provides high-quality and highly visible recurring revenues. Current Trading and Outlook Trading in the first half of the year, which delivered 10% growth and strong profitability, reflects a period of more normalised trading following a spike in one-off pandemic related SMS activity in the prior year. This trend has continued with the emergence from lockdown in EMEA accelerating post period end, and while our core offering has made an encouraging start to the second half, we have seen a further softening of transactional based SMS of which we will see the full impact next financial year. In addition, we are seeing a lag in US growth due to the impact of a challenging labour market on our pace of recruitment and retention. In the US we have put in place a new management structure and team to support the region, which will start contributing through the second half of the year. As a result of the above, the Board anticipates revenue for the full year to show growth in the range of 7 - 8%, slightly below current expectations. Whilst our operating margin at the half year is higher than normal levels, we expect this to be in the region of 20 - 22% margin by the end of the year as we accelerate our investment in our teams due to wage inflation and strengthen our international operations. This investment in talent and the actions taken as described above, positions us well for continued revenue growth in the next financial year and beyond. We appear to be moving away from the worst of the pandemic, yet the acceleration in organisations' adoption of digital marketing triggered is set to endure, and the strength of our platform puts us in an ideal position to benefit from that trend. There remain industry-wide pressures to overcome, but they don't detract from the confidence we have in continuing to make significant strides forward with each period that passes. We continue to grow our presence in key territories around the world, developing a product that meets the changing needs of marketeers while strengthening the organisational infrastructure that underpins it. Market The shift from traditional to digital marketing is a long-term trend, dramatically accelerated by the pandemic as organisations quickly grew to rely on digital channels from both a customer retention and acquisition perspective. At the same time, we have seen a marked increase in demand for a more sophisticated approach, as marketeers recognise the step change in ROI possible from developing more targeted and personalised campaigns based on increasingly rich data sets. This is evident in the continued adoption of channels in addition to email, which remains the most widely used means of engagement, and strong growth in functionality recurring revenue seen in the period. As a result of the pandemic and the increased frequency and depth of engagement, organisations have grown their contact bases, and the audiences now expect a personalised end-to-end experience; a trend that will persist long after Covid-related restrictions ease. We have developed Dotdigital's platform to provide marketeers with everything they need to meet these expectations and more, from highly customisable user experiences to the most advanced analytics on the market, ensuring every campaign and touchpoint is memorable and feeds back data to drive continuous ROI enhancements. We continue to see digital marketing grow as a percentage of overall revenue spend and expect to see organisations in those industries worst affected by the pandemic such as travel continue to increase their budgets as they ramp back up. As the world moves towards a point where there is acceptance of Covid as part and parcel of normal life, organisations will adapt their strategies accordingly, but their reliance on marketing automation will continue to grow apace and the strength of our offering puts us in a strong position to capitalise. Strategy The Group's strategy has organic growth at its core, centred around three strategic pillars: international diversification, expanded market reach through partnership relationships, and continuous product innovation. Geographic expansion Organic international revenue increased by 4% to GBP9.7m (H1 2021: GBP9.3m) in the period, with international sales contributing 31% to total revenue (H1 2021: 33%). EMEA EMEA showed solid revenue growth of c.10% in the period to GBP23.6m (H1 2021: GBP21.5m). The Group continues to see growing demand in the region for its omnichannel capability, as marketeers increase their focus on relevancy and personalisation to provide the best possible customer experience. As international travel is now opening, our teams have started to meet customers face to face and build further pipeline through the partner and sales teams. People was a major focus in EMEA across the period. We continued to: invest in our customer success team, which is already having a tangible, positive impact on retention; strengthen our partnership team to deepen relationships and drive greater reach into their respective customer bases; and broaden our agency and technology partner ecosystem, helping to build 'top of funnel' lead generation demand. North America Revenues from North America grew organically by c.3% to $6.5m (H1 2021: $6.3m). The recruitment of talent and expanding the employee base is key to improving growth rates within the region. In a challenging labour market with high levels of wage inflation, the Directors continue to focus on strengthening the management team in the region, most recently with the hire of a new VP of Growth and VP of Customer Success. Whilst investment in management bandwidth will take time
to flow through to the financial results, this provides us with the right structure to support future growth. With the addition of more customer success specialists to support growth and consultants to help drive increased uptake of our platform from upper-tier mid-market companies and larger enterprises, and plans to further strengthen our senior team, our prospects for the territory remain strong. APAC APAC revenue grew organically by c.27% to AUS$4.4m (H1 2021: AUS$3.5m). The Group's Japan office is now operational and uptake of the platform in Singapore has been encouraging. The Group has continued to develop its presence in Australia despite the challenges posed by lockdowns. As our newest region, the focus in APAC continues to be building our teams on the ground, deepening relationships with strategic partners, and driving brand awareness. The Group continues to navigate various cost pressures, particularly regarding hiring, across all regions but is confident of actions being taken by management to support the Group's geographic expansion strategy in the second half and beyond. Strategic partnerships The Group continues to broaden and deepen its partnership relationships, amplifying the Group's market reach beyond its direct sales channel. A strategic technology partner for the Group is defined as a partner where our customer using that technology integration has the potential to represent or accounts for 10% of Group revenue. This strategic partnership model is complemented by a broader general partner referral network which includes over 200 active global partners. A core focus of the strategic partnership network is forging connectors into both ecommerce and CRM platforms, with the aim of building brand awareness as we push out into international markets. Sales through connectors into our strategic partners increased by 9% to GBP13.9m (H1 2021: GBP12.8m). Magento connector revenue grew 6%, Shopify connector revenue grew by 47% and MS Dynamics connector revenue grew by 3% compared to the same period in the previous year. While the Group works through pressures in the US, it continues to build on its work with its strategic partners, both in the ecommerce and CRM platform space, to drive brand awareness across their customer bases through joint go to market plans. In H1, the Group increased its investment in adding new channel managers into its international operations, building on the strong relationships it has with its agency and technology partners that operate within the ecosystem. The pipeline continues to build as we move through the second half, with the Group now also exploring opportunities to expand its strategic partner base and further diversify its revenues into areas such as service clouds, as is evident with the recent Zendesk Sell integration. Product innovation The Group's growth is supported by a focussed R&D investment programme which continues to drive value for both our new and existing customers. Recurring revenue from enhanced product functionality and upgrades increased 22% to GBP10.8m. The key areas of investment for the Group remain: enhancing our customer data and experience platform capabilities; data visualisations through reporting and analytics; deeper integrations with new and existing technology partners; and our user experience of the platform. During the period we invested GBP3.4m in R&D, underpinning management's commitment to continuous product innovation. Our focus for product innovation centres around the key areas of: * Data and intelligence - joining all data together to create a single customer view and help our customers better personalise their campaigns and be relevant * Marketing automation - harnessing artificial intelligence (AI) and machine learning across targeted parts of the platform's architecture, informed by our customers' needs and requirements to give efficiencies to time-poor marketeers * Building out further omni-channel functionality to Engagement Cloud to assist businesses through the full customer journey at every touch point they have with their customers During the period we introduced single customer view, giving marketeers and merchants a holistic, real-time view of their customer data and interactions. We also released new program analytics and reporting, empowering marketeers to optimise their customer journeys. New segment analytics provide our customers additional insight into marketing and commerce audiences, and we were the first to market with a toolkit to help customers mitigate the impact of iOS 15 and mail privacy protections. We also, developed new data integrations with Zoom Webinar, Zendesk Sell, Oracle Netsuite and Shopware 6, expanding our addressable market and providing customers with greater functionality. M&A To support the Group's organic growth strategy, the Board continues to evaluate the market for complementary acquisitions, backed by the Group's robust financial position. The Board's acquisition strategy is focused on set criteria, being: synergy technology for new revenue streams; bolt-on functionality to accelerate platform development, new talent acquisition and the expansion of expertise, and extension of the customer base in strategic territories. People Our success to date is solely down to the highly talented team we have built at Dotdigital. We have built a special culture around empowering colleagues to make decisions, recognising that everyone plays an important role in helping us reach our growth ambitions and giving them the freedom to express themselves. The togetherness this creates has again paid dividends in the first half, as we continued to meet challenges head on while driving the business forwards. On behalf of myself and the Board I would like to thank everyone at Dotdigital for their continued hard work and dedication. As announced on 25 February 2022, Chief Financial Officer Paraag Amin has informed the Board of his intention to step down as an Executive Director of the Company, effective as of 31 March 2022. The Company has appointed Spencer Stuart to conduct a formal search process will update shareholders in due course. We thank Paraag for his valuable contribution and wish him well in his future endeavours. To continue to grow and increase our presence around the world, we need to continue to hire and retain exceptional individuals and invest in our talent. We have continued to bolster our product development teams and sales teams while bringing in highly experienced customer success professionals and continue to work hard to attract more
senior talent to help us realise our vision. FINANCIAL REVIEW Revenue Revenue during the period grew 10% to GBP30.9m from GBP28.2m in H1 2021. This performance was driven primarily by new customer wins and existing customer growth. Recurring revenue represents c.94% of revenues, improving visibility on future revenues. Enhanced functionality revenue (which includes licence fees and bolt-on functionality) grew 22% to GBP10.8m from GBP8.9m in H1 2021. International revenue was 31% of total sales in the period, from 33% in H1 2021. Of that, revenues were up 3% in the US to $6.5m (H1 2021: $6.3m), and up 27% in APAC to AUS$4.4m (H1 2021: AUS$3.5m). EMEA revenues grew 10% in the period to GBP23.6m (H1 2021: GBP21.5m). During the period ARPC(3) increased by 19% to GBP1422 per month (H1 2021: GBP1196 per month). EBITDA We achieved an adjusted EBITDA(1) margin of 40% and an adjusted operating profit margin of 29% in the first half, which was in line with management expectations. The adjustments include a share-based payment charge of GBP0.22m and exceptional costs of GBP0.06m. Balance Sheet & Cash Position Dotdigital continues to generate strong cash flow from its Engagement Cloud operations with an interim period end net cash balance of GBP40.0m. The Group continues to prioritise product development and during the period spent GBP3.4m on development (compared to GBP3.1m in H1 2021). Dividend Policy A dividend of 0.86p per ordinary share (2021: 0.83p) was proposed by the Company at the time of its Final Results in November last year, demonstrating a commitment from the Board to deliver value by focusing on total shareholder return. This dividend was approved by shareholders at the Annual General Meeting on 22 December 2021 and paid on 31 January 2022. The Group will continue to conduct a full dividend review at year end; therefore, in line with previous years the Board is not proposing an interim dividend. Dotdigital Group Plc Consolidated Income Statement For the six months ended 31 December 2021 ------------------------------------------------------------------------------------ Restated* 6 months 6 months 12 months to 31 Dec to 31 Dec to 30 June 2021 2020 2021 Unaudited Unaudited Audited Note GBP'000s GBP'000s GBP'000s Continuing operations Revenue from contracts with customers 4 30,911 28,226 58,124 Cost of sales (5,541) (5,067) (10,356) ---------- ---------- ----------- Gross profit 4 25,370 23,159 47,768 Administrative expenses (16,470) (15,583) (34,089) Share based payments (222) (344) (625) Exceptional costs** (60) (68) (188) ---------- ---------- ----------- Operating profit from continuing operations 8,618 7,164 12,866 Finance income 16 16 20 Finance costs (30) (41) (74) ---------- ---------- ----------- Profit before income tax from continuing operations 8,604 7,139 12,812 Income tax expense (1,825) (815) (1,322) ---------- ---------- ----------- Profit for the period from continuing operations 6,779 6,324 11,490 ---------- ---------- ----------- Discontinuing operations Loss for the period from discontinued operations - (424) (899) Profit for the period attributable to the owners of the Company 6,779 5,900 10,591 ========== ========== =========== Earnings per share from all operations (pence per share) Basic 6 2.27 1.98 3.55 Diluted 6 2.23 1.95 3.50 Adjusted basic 6 2.36 2.11 3.82 Adjusted diluted 6 2.32 2.08 3.76 * Restated see note 11
** The exceptional costs relate to amortisation of technology and in the prior year to amortisation of technology and acquisition costs of Comapi.
Dotdigital Group Plc Consolidated Statement of Comprehensive Income For the six months ended 31 December 2021 --------------------------------------------------------------------------------------------------------- Restated* 6 months 6 months 12 months to 31 Dec to 31 Dec to 30 June 2021 2020 2021 Unaudited Unaudited Audited Note GBP'000s GBP'000s GBP'000s Earnings per share from continuing operations (pence per share) Basic 6 2.27 2.12 3.85 Diluted 6 2.23 2.09 3.79 Adjusted basic 6 2.36 2.26 4.12 Adjusted diluted 6 2.32 2.22 4.06 Earnings per share from discontinued operations (pence per share) Basic 6 - (0.14) (0.30) Diluted 6 - (0.14) (0.30) Adjusted basic 6 - (0.14) (0.30) Adjusted diluted 6 - (0.14) (0.30) Dotdigital Group Plc Consolidated Statement of Comprehensive Income For the six months ended 31 December 2021 --------------------------------------------------------------------------------------------- Restated* 6 months 6 months 12 months to 31 Dec to 31 to 30 June 2021 Dec 2020 2021 Unaudited Unaudited Audited note GBP'000s GBP'000s GBP'000s Profit for the period 6,779 5,900 10,591 Other comprehensive income Items that may be subsequently reclassified to profit and loss: Exchange differences on translating foreign operations 29 (79) (87) ---------- ---------- ----------- Total comprehensive income attributable to: Owners of the parent 4 6,808 5,821 10,504 Total comprehensive income for the year Comprehensive income from continuing operations 6,808 6,245 11,403 Comprehensive income from discontinued operations - (424) (899)
========== ========== =========== Dotdigital Group Plc Consolidated Statement of Financial Position For the six months ended 31 December 2021 ------------------------------------------------------------------- Restated* Note As at As at As at 31 Dec 31 Dec 30 June 2021 2020 2021 Unaudited Unaudited Audited GBP'000s GBP'000s GBP'000s Assets Non-current assets Goodwill 9,680 9,680 9,680 Intangible assets 16,749 14,893 16,134 Property, plant and equipment 639 722 649 Right-of-use asset 2,983 3,805 3,323 ---------- -------------- --------- 30,051 29,100 29,786 ---------- -------------- --------- Current assets Trade and other receivables 12,838 13,253 13,350 Cash and cash equivalents 40,035 27,556 31,951 ---------- -------------- --------- 52,873 40,809 45,301 ---------- -------------- --------- Total assets 4 82,924 69,909 75,087 ========== ============== ========= Equity attributable to the owners of the parent Called up share capital 8 1,494 1,493 1,494 Share premium 7,124 6,967 7,124 Reverse acquisition reserve (4,695) (4,695) (4,695) Other reserves 3,829 2,087 3,066 Retranslation reserve (8) (29) (37) Retained earnings 60,863 50,883 54,081 ---------- -------------- --------- Total equity 68,607 56,706 61,033 ========== ============== ========= Dotdigital Group Plc Consolidated Statement of Financial Position For the six months ended 31 December 2021 ------------------------------------------------------------------ Restated* As at As at As at 31 Dec 31 Dec 30 June 2021 2020 2021 Unaudited Unaudited Audited GBP'000s GBP'000s GBP'000s Liabilities Non-current liabilities Lease liabilities 2,174 2,885 2,489 Deferred tax 1,451 1,365 1,207 ---------- ---------- --------- 3,625 4,250 3,696 ---------- ---------- --------- Current liabilities Trade and other payables 9,739 7,830 9,334 Lease liabilities 902 1,031 934 Current tax payable 51 92 90 ---------- ---------- --------- 10,692 8,953 10,358 ---------- ---------- --------- Total liabilities 14,317 13,203 14,054 ========== ========== ========= Total equity and liabilities 82,924 69,909 75,087 ========== ========== ========= Dotdigital Group Plc Consolidated Statement of Changes in Equity For the six months ended 31 December 2021 ----------------------------------------------------------------------------------------------------------------------------------------------------------- Share Share Retained Other Reverse Re-translation Total capital premium Earnings reserves acquisition Reserve reserve GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s As at 1 July 2020 as previously stated 1,493 6,967 45,514 1,372 (4,695) 50 50,701 ---------------- ------------ ------------------ ------------------- ---------------- --------------------- ---------------------------- --------- Impact of correction of errors (note 11) - - 141 228 - - 369 ---------------- ------------ ------------------ ------------------- ---------------- --------------------- ---------------------------- --------- Restated as at 1 July 2020 1,493 6,967 45,655 1,600 (4,695) 50 51,070 ---------------- ------------ ------------------ ------------------- ---------------- --------------------- ---------------------------- --------- Profit for the period - - 5,900 - - - 5,900 Retranslation reserve - - - - - (79) (79) Dividends - - (950) - - - (950) Reserve Transfer - - 278 (278) - - - Deferred tax on share options - - - 421 - - 421 Share based payments - - - 344 - - 344 ------------ ------------------ ------------------- ---------------- --------------------- ---------------------------- --------- As at 31 December 2020 1,493 6,967 50,883 2,087 (4,695) (29) 56,706 ------------ ------------------ ------------------- ---------------- --------------------- ---------------------------- --------- As at 1 January 2021 1,493 6,967 50,883 2,087 (4,695) (29) 56,706 Profit for the period - - 4,691 - - - 4,691 Dividends - - (1,522) - - - (1,522) Retranslation reserve - - - - - (8) (8) Issue of share capital 1 157 - - - - 158 Reserve Transfer - - 29 (29) - - - Deferred tax on share options - - - 727 - - 727 Share based payments - - - 281 - - 281 ------------ ------------------ ------------------- ---------------- --------------------- ---------------------------- --------- As at 30 June 2021 1,494 7,124 54,081 3,066 (4,695) (37) 61,033 ------------ ------------------ ------------------- ---------------- --------------------- ---------------------------- --------- As at 1 July 2021 1,494 7,124 54,081 3,066 (4,695) (37) 61,033 Profit for the
period - - 6,779 - - - 6,779 Dividends - - - - - - - Retranslation reserve - - - - - 29 29 Reserve transfer - - 3 (3) - - - Deferred tax on share options - - - 544 - - 544 Share based payments - - - 222 - - 222 ------------ ------------------ ------------------- ---------------- --------------------- ---------------------------- --------- As at 31 December 2021 1,494 7,124 60,863 3,829 (4,695) (8) 68,607 ============ ================== =================== ================ ===================== ============================ ========= Dotdigital Group Plc Consolidated Statement of Changes in Equity For the six months ended 31 December 2021 ---------------------------------------------
- Share capital is the amount subscribed for shares at nominal value.
- Share premium represents the excess of the amount subscribed for Share Capital over the nominal value net of the share issue expenses.
- Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.
- The reverse acquisition reserve relates to the adjustment required to account the reverse acquisition in accordance with International Financial Reporting Standards.
- Other reserves relate to the charge for the share-based payments in accordance with International Financial Reporting Standard 2. The reserve transfer in the period relates to lapsed share options.
- Retranslation reserve relates to the retranslation of a foreign subsidiary into the functional currency of the Group.
Dotdigital Group Plc Consolidated Statement of Cash Flows For the six months ended 31 December 2021 ---------------------------------------------------------------------------------------------------- 6 months 6 months 12 months to 31 Dec to 31 Dec to 30 June 2021 2020 2021 Unaudited Unaudited Audited note GBP'000s GBP'000s GBP'000s Cash flow from operating activities 7 13,258 7,944 17,969 Tax paid (1,075) (982) (975) ------------ ---------- ------------------ Net cash generated from operating activities 12,183 6,962 16,994 ------------ ---------- ------------------ Net cash used in continuing operating activities 12,183 7,534 20,710 Net cash used in discontinuing operating activities - (572) (3,716) Cash flow from investing activities Purchase of intangible fixed assets (3,439) (3,147) (6,870) Purchase of property, plant and equipment (162) (57) (169) Proceeds from sale of property, plant and equipment - - 2 Interest received 16 16 20 ------------ ---------- ------------------ Net cash used in investing activities (3,585) (3,188) (7,017) ------------ ---------- ------------------ Net cash used in continuing investing activities (3,585) (3,188) (7,017) Net cash used in discontinuing investing activities - - - Cash flows from financing activities Equity dividends paid - (950) (2,472) Payment of leasing liabilities (543) (572) (1,182) Proceeds from share issues - - 158 ------------ ---------- ------------------ Net cash used in financing activities (543) (1,522) (3,496) ------------ ---------- ------------------ Net cash used in continuing financing activities (543) (1,492) (3,446) Net cash used in discontinuing financing activities - (30) (50) Increase in cash and cash equivalents 8,055 2,252 6,481 ============ ========== ================== Cash and cash equivalents at beginning of period 31,951 25,383 25,383 Effect of foreign exchange rate changes 29 (79) 87 Cash and cash equivalents at end of period. 40,035 27,556 31,951 ============ ========== ================== Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 ------------------------------------------------------------------------------------------------------------------------------------------------------------------ 1. GENERAL INFORMATION Dotdigital Group Plc is a company incorporated in England and Wales and quoted on the AIM market. 2. BASIS OF INFORMATION These consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the UK and on a historical basis, using the accounting policies which are consistent with those set out in the Group's annual report and accounts for the year ended 30 June 2021. The interim financial information for the six months to 31 December 2021, which complies with IAS 34 'Interim Financial Reporting' has been approved by the Board of Directors on 3 March 2022. The unaudited interim financial information for the period ended 31 December 2021 does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the year ended 30 June 2021 are extracted from the statutory financial statements which have been filed with the Registrar of Companies and contain an unqualified audit report and did not contain statements under Section 498 to 502 of the Companies Act 2006. 3. SIGNIFICANT ACCOUNTING POLICIES The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 June 2021, as described in those financial statements. Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- 4. SEGMENTAL REPORTING The Group's single line of business is the provision of data-driven omnichannel marketing automation. The chief operating decision maker considers the Group's reportable segments to be by geographical location this being EMEA, US and APAC operations and by business activity, this being core Dotdigital and CPaaS as shown below: Geographical revenue and results (from all operations) 6 months to 31 December 2021 ------------------------------------------------ EMEA US APAC Operations Operations Operations Total GBP'000s GBP'000s GBP'000s GBP'000s Income statement
Revenue 23,644 4,885 2,382 30,911 Gross profit 18,927 4,367 2,076 25,370 Profit/(Loss) before income tax 8,774 96 (266) 8,604 ----------- ----------- ----------- --------- Total comprehensive income attributable to the owners of the parent 7,046 13 (251) 6,808 =========== =========== =========== ========= Financial position Total assets 75,743 4,670 2,511 82,924 Net current assets 36,957 3,727 1,497 42,181 =========== =========== =========== ========= Restated 6 months to 31 December 2020 ------------------------------------------------ EMEA US APAC Operations Operations Operations Total GBP'000s GBP'000s GBP'000s GBP'000s Income statement Revenue 22,973 4,842 1,933 29,748 Gross profit (restated see note 11) 17,251 4,354 1,775 23,380 Profit before income tax 6,386 425 (96) 6,715 ----------- ----------- ----------- --------- Total comprehensive income attributable to the owners of the parent (restated see note 11) 5,576 362 (117) 5,821 =========== =========== =========== ========= Financial position Total assets 63,279 4,629 2,001 69,909 Net current assets (restated see note 11) 26,757 3,623 1,476 31,856 =========== =========== =========== ========= Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 -------------------------------------------------------------------------------------------------------------------------------------------------------------------- 4. SEGMENTAL REPORTING (CONTINUED...) 12 months to 30 June 2021 ------------------------------------------------ EMEA US APAC Operations Operations Operations Total GBP'000s GBP'000s GBP'000s GBP'000s Income statement Revenue 47,024 9,264 4,262 60,550 Gross profit 36,878 8,241 3,864 48,983 Profit/(Loss) before income tax 11,699 609 (294) 12,014 ----------- ----------- ----------- --------- Total comprehensive income attributable to the owners of the parent 10,436 379 (311) 10,504 =========== =========== =========== ========= Financial position Total assets 71,566 3,098 423 75,087 Net current assets/(liabilities) 33,942 1,387 (386) 34,943 =========== =========== =========== =========
Business activity revenue and results from all operations
6 months to 31 December 2021 --------------------------------- Core CPaaS Total GBP'000s GBP'000s GBP'000s Income statement Revenue 30,911 - 30,911 Gross profit 25,370 - 25,370 Profit/(Loss) before income tax 8,604 - 8,604 ---------- ---------- --------- Total comprehensive income attributable to the owners of the parent 6,808 - 6,808 ========== ========== ========= Financial position Total assets 82,882 42 82,924 Net current assets/(liabilities) 42,213 (32) 42,181 ========== ========== ========= Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 --------------------------------------------
4. SEGMENTAL REPORTING (CONTINUED...)
Restated 6 months to 31 December 2020 ------------------------------------- Core CPaaS Total GBP'000s GBP'000s GBP'000s Income statement Revenue 28,226 1,522 29,748 Gross profit (restated see note 11) 23,159 221 23,380 Profit/(Loss) before income tax 7,139 (424) 6,715 ----------- ----------- ----------- Total comprehensive income attributable to the owners of the parent (restated see note 11) 6,245 (424) 5,821 =========== =========== =========== Financial position Total assets 67,069 2,840 69,909 Net current assets (restated see note 11) 31,088 768 31,856 =========== =========== =========== 12 months to 30 June 2021 ------------------------------- Core CPaaS Total GBP'000s GBP'000s GBP'000s Income statement Revenue 58,124 2,426 60,550 Gross profit 47,768 1,215 48,983 Profit/(Loss) before income tax 12,812 (798) 12,014 --------- --------- --------- Total comprehensive income attributable to the owners of the parent 11,403 (899) 10,504 ========= ========= ========= Financial position Total assets 74,976 111 75,087 Net current assets 34,974 (31) 34,943 ========= ========= =========
5. DIVIDS
The proposed final dividend of GBP2,563,819 for the year ended 30 June 2021 of 0.86p per share was paid on the 31 January 2022.
Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 --------------------------------------------
6. EARNINGS PER SHARE
Earnings per share data is based on the consolidated profit using the weighted average number of shares in issue of the parent Company. Basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares. Adjusted earnings per share is based on the consolidated profit deducting the acquisition related exceptional costs and share-based payment.
A number of non-IFRS adjusted profit measures are used in the annual report and financial statements and in these interim financial statements. Adjusting items are excluded from our headline performance measures by virtue of their size and nature, in order to reflect management's view of the performance of the Group. Summarised below is a reconciliation between statutory results to adjusted results. The Group believes that alternative performance measures such as adjusted EBITDA are commonly reported by companies in the markets in which it competes and are widely used by investors in comparing performance on a consistent basis without regard to factors such as depreciation and amortisation, which can vary significantly depending upon accounting methods (particularly when acquisitions have occurred) or based on factors which do not reflect the underlying performance of the business. The adjusted profit after tax earnings measure is also used for the purpose of calculating adjusted earnings per share.
Reconciliations to earnings figures 6 months 6 months 12 months used in arriving at adjusted earnings to 31 December to 31 December to 30 June
per share are as follows: 2021 2020 2021 From all operations GBP'000s GBP'000s GBP'000s Profit for the year attributable to the owners of the parent 6,779 5,900 10,591 Amortisation of acquisition-related intangible fixed asset 60 60 120 Other exceptional costs - 8 68 Share-based payment 222 344 625 ---------------- ---------------- ---------------- Adjusted profit for the year attributable to the owners of the parent 7,061 6,312 11,404 ---------------- ---------------- ---------------- Adjusted profit for the year attributable to the owners of the parent from: Continuing operations: 7,061 6,736 12,303 Discontinuing operations: - (424) (899) ---------------- ---------------- ------------ 7,061 6,312 11,404
Management does not consider the above adjustments to reflect the underlying business performance.
Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 -------------------------------------------------------------------------------------------------- 6. EARNINGS PER SHARE (CONTINUED...) 6 months 6 months 12 months to 31 Dec to 31 Dec to 30 June 2021 2020 2021 Unaudited Unaudited Audited All operations Earnings per Ordinary share: Basic (pence) 2.27 1.98 3.55 Diluted (pence) 2.23 1.95 3.50 Adjusted basic (pence) 2.36 2.11 3.82 Adjusted diluted (pence) 2.32 2.08 3.76 =========== ================ ============== Continuing operations Earnings per Ordinary share: Basic (pence) 2.27 2.12 3.85 Diluted (pence) 2.23 2.09 3.79 Adjusted basic (pence) 2.36 2.26 4.12 Adjusted diluted (pence) 2.32 2.22 4.06 =========== ================ ============== Discontinued operations Earnings per Ordinary share: Basic (pence) - (0.14) (0.30) Diluted (pence) - (0.14) (0.30) Adjusted basic (pence) - (0.14) (0.30) Adjusted diluted (pence) - (0.14) (0.30) Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 --------------------------------------------------------------------------------------------- 6. EARNINGS PER SHARE (CONTINUED...) 6 months 6 months 12 months to 31 Dec to 31 Dec to 30 June 2021 2020 2021 Unaudited Unaudited Audited GBP'000s GBP'000s GBP'000s Profit for the period from all operations for the purpose of earnings per share: Basic 6,779 5,900 10,591 Adjusted 7,061 6,312 11,404 =========== ================ ============== Profit for the period from continuing operations for the purpose of earnings per share: Basic 6,779 6,324 11,490 Adjusted 7,061 6,736 12,303 =========== ================ ============== Profit for the period from discontinued operations for the purpose of earnings per share: Basic - (424) (899) Adjusted - (424) (899) =========== ================ ============== Weighted average number of shares in issue as follows: 6 months 6 months 12 months to 31 Dec to 31 Dec to 30 June 2021 2020 2021 Unaudited Unaudited Audited Weighted average number Basic 298,778,630 298,547,645 298,598,459 Diluted 304,006,513 303,231,752 302,921,327 ================ ================ ============ The adjusted profit for the period, adjusted basic earnings per ordinary share and adjusted diluted earnings per ordinary share exclude exceptional costs relating to share based payments GBP221,767 (2020: GBP343,920, 2021: GBP624,881), ongoing acquisition costs of Comapi GBPnil (2020: GBP7,857, 2021: GBP68,095) and amortisation of acquired intangibles GBP60,000 (2020: GBP60,000, 2021: GBP120,000). Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 7. RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO NET CASH GENERATED FROM OPERATIONS 6 months 6 months 12 months to 31 Dec to 31 Dec to 30 June 2021 2020 2021 Unaudited Unaudited Audited GBP'000s GBP'000s GBP'000s Profit before income tax from all operations 8,604 6,715 12,014 Adjustments for: Depreciation 565 651 1,267 Amortisation 2,824 2,314 4,795 Exceptional costs - 8 68 Gain on disposal of fixed assets - - (2) Share-based payments 222 344 625 Finance lease non-cash movement 96 140 (48) Finance expense 30 41 75 Decrease/ (increase) in trade and other receivables 512 (266) (363) Increase/(decrease) in trade and other payables 405 (2,003) (462) -------------- -------------- ----------- Net cash from operations 13,258 7,944 17,969 ============== ============== =========== 8. CALLED UP SHARE CAPITAL During the period no shares were issued. Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 ---------------------------------------------------------------------------------------- 9. RELATED PARTY NOTE
Transactions between the company and its subsidiaries, who are related parties, have been eliminated on consolidation and are not disclosed in this note. Key management remuneration: Key management include Directors and non-executive Directors The remuneration paid for key management for employee services are as follows: 12 months 6 months 6 months to 31 Dec to 31 Dec to 30 June 2021 2020 2021 Unaudited Unaudited Audited GBP'000s GBP'000s GBP'000s Aggregate emoluments 312 285 1,136 Share-based payments on the LTIP options granted 133 220 347 Company contributions to money purchase pension scheme 13 13 26 ----------- ------------------ ---------------- 458 518 1,509 =========== ================== ================
The end-to-end awards granted to Milan Patel and to Paraag Amin can only be exercised at the end of a 3-year vesting period, based on challenging absolute total shareholder return performance targets. Under IFRS 2 Share-based payments, the Group must provide an estimate for the costs based on a Black Scholes model valuation each year, as if they fully paid out at the end of the performance period in December 2020 to Milan Patel and October 2021 for Paraag Amin. To fully vest, the Group must achieve an annual compounded TSR of 35% over a c.3 year period. In the period, part of the end-to-end share options awarded to Milan vested and the remainder lapsed. A new grant was made by the remuneration committee under the long-term incentive program with performance measures that are based on the company's total shareholder return and earnings per share in 2024.
Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 --------------------------------------------
9.RELATED PARTY NOTE (CONTINUED...)
6 months 6 months 12 months to 31 Dec to 31 Dec to 30 June 2021 2020 2021 Unaudited Unaudited Audited GBP'000s GBP'000s GBP'000s The following transactions were carried out with related parties Sale of services Entities controlled by non - executive director of the Group: Ipswich Town Football Club 5 - 4 Epwin Group Plc - Email marketing services 3 3 6 Cadence Performance Ltd - Email 1 marketing services - - ---------- --------------------- --------------- 8 4 10 ========== ===================== =============== Year end balances arising from the sale of services Entities controlled by non-executive directors of the Group: Ipswich Town Football Club - - 1 Epwin Group Plc - Email marketing services - 1 1 ---------- --------------------- --------------- - 1 2 ========== ===================== =============== 10. SUBSEQUENT EVENTS TO 31 DECEMBER 2021 As at the date of these statements and the date they were approved by the Board of Directors there were no such events to report. Copies of this interim statement are available form the Company at its registered office at, No 1 London Bridge London, SE1 9BG. The interim financial information document will also be available on the Company's website www.dotdigitalgroup.com. Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 -------------------------------------------- 11. PRIOR YEAR RESTATEMENT NOTE
During the year ended 30 June 2021, the Group made the decision to modify the classification of direct marketing from cost of sales to administrative expenses and tech infrastructure from under administrative expenses to cost of sales, to reflect more appropriately gross profit and gross profit margin plus also administrative expenses under continuing operations. Comparative amounts in the 6 months ended 31 December 2020 in the Consolidated Income Statement have been reclassified for consistency. As a result, GBP66,111 was reclassified from administrative expenses to cost of sales. There has been no impact on the profit for the 6 months ended 31 December 2020 however gross profit has decreased from GBP23,225,000 to GBP23,159,000 and administrative expenses decreased from GBP15,649,000 to GBP15,583,000.
During the year ended 30 June 2021, the Group discovered that the share-based payment arrangement had been erroneously recognised in Dotdigital Group PLC instead of being recognised in the subsidiaries in which the employees are employed. Under IFRS 2 Share-based payments, when a parent grants rights to it's equity instruments to employees of its subsidiaries this arrangement should be accounted for as equity-settled in the consolidated financial statements but results in an investment being created in the parent's own statement of financial position. Therefore, the subsidiaries should in their own separate financial statements, measure the services received from its employees in accordance with the requirements of IFRS 2 applicable to equity-settled share-based payment transactions. Thereby resulting in a corresponding increase recognised in equity as a capital contribution from the parent. There was no impact on the Group profit for the 6 months ended 31 December 2020.
At the year end, the Group discovered on the calculation of deferred tax on the share options and the internally generated development costs that this had been misallocated and miscalculated respectively. On the misallocation of the deferred tax on the share option under IFRS 2 Share based payment, where the final deferred tax calculation exceeds the cumulative amount recognised as a share-based expense in the Income statement, the maximum amount of deferred tax income that can be recognised in the Income Statement can only equal the total share-based payment expense. Any excess deferred tax is recognised directly in reserves.
As for the miscalculation of deferred tax on the internally generated development costs this is with respect to the identification and calculation of the net book value for internally generated development costs qualifying for research and development, thereby impacting the deferred tax liability.
Both adjustments have impacted the prior year's profit for the 6 months ended 31 December 2020 where this has decreased from GBP6,656,000 to GBP6,324,000. Net assets as per the consolidated of financial position have increased from GBP56,248,000 to GBP56,706,000.
Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 --------------------------------------------
11. PRIOR YEAR RESTATEMENT NOTE continued
Consolidated Income Statement for the 6 months ended 31 December 2020
As previously reported Adjustments As restated GBP'000s GBP'000s GBP'000s Continuing operations Revenue from contracts with customers 28,226 - 28,226 Cost of sales (5,001) (66) (5,067) Gross profit 23,225 (66) 23,159 Administrative expenses (15,649) 66 (15,583) Share based payments (344) - (344) Exceptional costs (68) - (68) -------------- ------------ ------------ Operating profit from continuing operations 7,164 - 7,164 Finance income 16 - 16 Finance costs (41) - (41) -------------- ------------ ------------ Profit before income tax
from continuing operations 7,139 - 7,139 Income tax expense (483) (332) (815) -------------- ------------ ------------ Profit for the period from continuing operations 6,656 (332) 6,324 -------------- ------------ ------------ Discontinuing operations Loss for the year from discontinued operations (424) - (424) Profit for the period attributable to the owners of the Company 6,232 (332) 5,900 -------------- ------------ ------------ Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 --------------------------------------------
11. PRIOR YEAR RESTATEMENT NOTE continued
Consolidated Statement of Comprehensive Income for the 6 months ended 31 December 2020
As previously Adjustments As restated reported Unaudited Unaudited Unaudited GBP'000s GBP'000s GBP'000s Profit for the period 6,232 (332) 5,900 Other comprehensive income Items that may be subsequently reclassified to profit and loss: Exchange differences on translating foreign operations (79) - (79) ----------------------- -------------- --------------- Total comprehensive income attributable to: Owners of the parent 6,153 (332) 5,821 Total comprehensive income for the year 6,577 (332) 6,245 Comprehensive income from continuing operations Comprehensive income from discontinued operations (424) - (424) ======================= ============== =============== Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 --------------------------------------------
11. PRIOR YEAR RESTATEMENT NOTE continued
Consolidated Statement of Financial Position as at 31 December 2020
As previously reported Adjustments As restated GBP'000s GBP'000s GBP'000s Assets Non-current assets Goodwill 9,680 - 9,680 Intangible assets 14,893 - 14,893 Property, plant and equipment 4,527 - 4,527 -------------- ------------ ------------ 29,100 - 29,100 Current assets Trade and other receivables 13,253 - 13,253 Cash and cash equivalents 27,556 - 27,556 -------------- ------------ ------------ 40,809 - 40,809 -------------- ------------ ------------ Total assets 69,909 - 69,909 ============== ============ ============ Equity attributable to the owners of the parent Called up share capital 1,493 - 1,493 Share premium 6,967 - 6,967 Reverse acquisition reserve (4,695) - (4,695) Other reserves 1,438 649 2,087 Retranslation reserve (29) - (29) Retained earnings 51,074 (191) 50,883 -------------- ------------ ------------ Total equity 56,248 458 56,706 -------------- ------------ ------------ Dotdigital Group Plc Notes to interim financial statements For the six months ended 31 December 2021 --------------------------------------------
11. PRIOR YEAR RESTATEMENT NOTE continued
Consolidated Statement of Financial Position as at 31 December 2020
As previously reported Adjustments As restated GBP'000s GBP'000s GBP'000s Liabilities Non-current liabilities Lease liabilities 2,885 - 2,885 Deferred tax 1,904 (539) 1,365 -------------- ------------ ------------ 4,789 (539) 4,250 -------------- ------------ ------------ Current liabilities Trade and other payables 7,830 - 7,830 Lease liabilities 1,031 - 1,031 Current tax payable 11 81 92 -------------- ------------ ------------ 8,872 81 8,953 -------------- ------------ ------------ Total liabilities 13,661 (458) 13,203 ============== ============ ============ Total equity and liabilities 69,909 - 69,909 ============== ============ ============
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