dotDigital Group plc Trading Update and Notice of Half Year Results (3820M)

TIDMDOTD

RNS Number : 3820M

dotDigital Group plc

21 January 2021

dotdigital Group plc

("dotdigital" or the "Company")

Trading Update and Notice of Half Year Results

Continued strong organic growth, underpinned by delivery against three strategic pillars

dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of an omnichannel marketing automation and customer engagement platform, announces a trading update ahead of the Company's half year results for the six months ended 31 December 2020 ("H1 2021").

The trading performance reported in this statement is based on unaudited management accounts. The Group is pleased to report a strong first half performance driven by continued execution of the organic growth strategy, namely ongoing product innovation, geographic expansion and growth through strategic partnerships.

Financial highlights

 
      --   Organic revenue from Continuing Operations up by c.22% to 
            GBP28.2m (H1 2020: GBP23.1m) driven by strong growth in sales 
            from new and existing customers and uptake of SMS 
      --   R&D continues to underpin dotdigital's growth strategy with 
            recurring revenues from enhanced product functionality growing 
            by 20% to GBP8.9m from GBP7.4m in the comparative period 
      --   Adjusted EBITDA(1) and adjusted profit before tax from Continuing 
            Operations expected to be in line with the recently upgraded 
            market expectations; we continue to monitor and respond to 
            the pandemic as it develops 
      --   ARPC(2) up by 20% to GBP1196 per month (H1 2020: GBP999 per 
            month) driven by an increase in new and existing client spend 
            alongside customers adopting a wider array of channels 
      --   Cash balance at 31 December 2020 of GBP27.6m (FY 2020: GBP25.4m) 
 

Operational highlights

Product innovation

Product enhancements in the period include:

 
      --   Improved AI and data visualisation for product recommendations, 
            customer persona modelling and product affinity capabilities 
      --   Intelligent contact data capture capabilities for chat, along 
            with alerting and multi-language support and a more personalised 
            customer experience 
      --   Support for the new Google AMP for Email standard for powerful, 
            dynamic, rich, app-like data driven content within emails 
      --   Marketing preference management for Dynamics 365 customers 
      --   New dotdigital connector for the Microsoft Power Automate 
            platform 
 

Geographic expansion

 
      --   International sales represented 33% of total sales (excluding 
            Discontinued Operations); (H1 2020: 32%). We have seen a 
            strong pick-up in UK SMS volumes during the period. Excluding 
            SMS, international sales represented 38% of revenue (H1 2020: 
            32%) 
      --   Organic international revenue increased by 27% to GBP9.3m 
            (H1 2020: GBP7.3m) 
      --   EMEA region showed strong revenue growth of c.21% in the 
            period to GBP21.5m (H1 2020: GBP17.7m) 
      --   US revenue grew organically by c.25% to $6.3m, (H1 2020: 
            $5.1m) driven by acquisition of higher value customers and 
            growth of existing customers 
      --   APAC sales, channel team expansion and increased Asia presence 
            drove revenue from the region, which grew organically c.41% 
            to AUS$3.5m, (H1 2020: AUS$2.5m) 
 

Strategic partnerships

 
      --   We continue to build pipeline and enhance our value proposition 
            for our connectors into both ecommerce platforms and Customer 
            Resource Management (CRM) software 
      --   Sales through connectors into our strategic partners increased 
            by 20% to GBP12.8m (H1 2020: GBP10.7m) 
      --   Our Shopify connector revenue grew by 115% and our MS Dynamics 
            connector revenue grew by 25% compared to the same period 
            in the previous year 
      --   Our relationships within both the ecommerce and CRM space 
            continue to go from strength to strength with an enhanced 
            go to market strategy 
      --   We have accelerated investment in building a more scalable 
            partnership program and hired an experienced leader to head 
            up global partnerships to increase management bandwidth and 
            focus 
 

Notice of 2021 Half Year results

dotdigital Group plc will announce its Half Year results for the period ended 31 December 2020 on 25 February 2021.

Milan Patel, CEO of dotdigital, commented: "H1 2021 delivered another period of strong growth and significant strategic progress, in a highly competitive environment, as customers continued to turn to us to elevate and future-proof their digital marketing strategies. At the same time, we began to see a step change in returns from the investments we have made into key areas of the business.

The fact that the majority of our growth in the period came from SMS clearly demonstrates the value of our omnichannel offering, which has grown and evolved since the acquisition of Comapi in 2017 to become a fundamental part of the Group's DNA. The headway we are making in growing our non-UK markets is accelerating, particularly in North America and APAC, and the resource we have put into strengthening and deepening our strategic partner relationships is having a substantial, positive impact on sales performance.

While Covid-related restrictions continue to cause disruption and uncertainty for organisations around the world, they have triggered a dramatic acceleration in digital transformation, from which dotdigital stands well-placed to benefit. Momentum from the first half has continued into the second, and we remain confident of delivering another year of strong sales growth and material progress against our strategic pillars."

(1) Consensus adjusted EBITDA for continuing operations as at 20 January 2021, for the year ending 30 June 2021, is approx. GBP18.6 million. EBITDA means earnings before interest, tax, depreciation, amortisation, and before restructuring, other non-recurring costs and certain non-cash items.

(2) ARPC means average revenue per customer

For further information please contact:

 
 dotdigital Group Plc                                Tel: [phone] 
  Milan Patel, CEO                                    [e-mail] 
  Paraag Amin, CFO 
 
 Alma PR (Financial PR)                              Tel: [phone] 
  Josh Royston                                        [e-mail] 
  David Ison 
  Kieran Breheny 
 
 Canaccord Genuity (Nominated Adviser                Tel: [phone] 
  and Joint Broker) 
  Bobbie Hilliam 
  Georgina McCooke 
  Jonathan Barr, Sales 
 
 finnCap (Joint Broker)                              Tel: [phone] 
  Stuart Andrews, Corporate Finance 
  Alice Lane, ECM 
  Rhys Williams, Sales 
 
 N+1 Singer (Joint Broker)                           Tel: [phone] 
  Shaun Dobson, Head of Corporate 
  Finance 
  Alex Bond, Corporate Finance 
 

Prior to this announcement's release, the statement contained inside information for the purposes of Article 7 of Regulation (EU) 596/2014 (MAR) (Market Abuse Regulation).

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January 21, 2021 02:00 ET (07:00 GMT)