IBEX Global Solutions plc Trading Update (1370E)

TIDMIBEX

RNS Number : 1370E

IBEX Global Solutions plc

14 July 2016

14 July 2016

This announcement contains inside information

IBEX GLOBAL SOLUTIONS PLC

("IBEX" or "the Company" or "the Group")

Trading Update

IBEX Global Solutions plc (AIM: IBEX), a leading provider of contact centre services and other business process outsourcing (BPO) solutions, is pleased to provide the following update on trading ahead of its annual results for the year ended 30 June 2016 ("FY16"), which it will release in September 2016.

Trading

During FY16, the Company made significant progress against its stated objectives, improving its Philippines business and developing Nearshore capabilities, both of which contribute higher margin. Through a focus on employees in the Philippines the Company was able to significantly improve agent retention which is reflected in its performance in that geography. Nearshore operations were successfully established in Jamaica and Nicaragua, with both new and existing clients launched, which the Board expects will underpin future revenues in these geographies. The Board estimates that exiting FY16, Offshore and Nearshore operations now generate approximately 42 per cent of Group revenue, up from 25 per cent in the previous financial year. The launch with a major mobile/telco client in Pakistan in June 2016 is expected to provide further revenue in that market. Revenue for FY16 is expected to be not less than $253 million, an increase of approximately 5.9 per cent. on FY15.

The Company also continues to make progress on its target to achieve double digit EBITDA margins. Growth in margins was achieved in FY16, particularly in Offshore markets due to the progress described above.

Growth in the Jamaican market was faster than had been anticipated and the Board made a strategic decision to exit a relationship with a local partner in Jamaica and instead build the Company's own centre which became operational on 1 July 2016. Whilst this decision is expected to increase revenues and margins for the Company from Jamaica from FY17 onwards, there was a consequential increase in capex associated with the new site and a negative impact on EBITDA in FY16 resulting from the incremental costs incurred with the early exit of the local partner relationship. In addition, a merger between two existing clients created higher than anticipated operating costs while we converted to a new integrated delivery model in the US region in the second half of the year. These challenges, combined with the overall backdrop of the US economy and its low unemployment, will impact EBITDA in FY16. Accordingly, EBITDA for FY16 is now expected to be no less than $17.0 million (representing at least a 2.4 per cent. increase on FY15 reported EBITDA of $16.6m, or a 49.1 per cent. increase on FY15 EBITDA of $11.4 million, after adjusting for one-off revenue projects).

Outlook

The Board believes a solid platform for growth has now been built for FY17 and beyond. As such the Board looks forward to continuing growth in the medium term and delivering against its stated objectives.

Bob Dechant, Chief Executive of IBEX, stated:

"In my first full year as CEO we have put the building blocks in place to develop a strong, repeatable and predictable business with an ideal balance of geographic footprints that include Onshore, Offshore, Nearshore and International markets. We look forward to continuing to build the momentum achieved to date into FY17 and beyond."

For further information, please visit www.ibexglobal.com or contact:

 
 IBEX Global Solutions plc      Tel: [phone] 
  Robert Dechant CEO             4239 
  Karl Gabel, CFO 
 Liberum Capital Limited        Tel: [phone] 
  Nominated Adviser and Joint    2000 
  Broker 
  Steve Pearce 
  Richard Bootle 
  Joshua Hughes 
 Cenkos Securities PLC          Tel: [phone] 
  Joint Broker                   8900 
  Liz Bowman 
  Camilla Hume 
 Alma PR Limited                Tel: [phone] 
  Josh Royston                   4216 
  Hilary Buchanan 
 

About IBEX

IBEX is a leading global provider of business process outsourcing services. Headquartered in Washington, DC and listed on the London Stock Exchange (AIM: IBEX), IBEX maintains a global workforce of over 15,000 serving more than 70 leading corporations with complex, enterprise-scale outsourcing solutions. With operational presence in the United States, the Philippines, Jamaica, Nicaragua, Pakistan, Senegal, and United Kingdom, IBEX delivers a multi-language and multi-cultural service capability focused on innovation and adding intellectual value.

This information is provided by RNS

The company news service from the London Stock Exchange

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July 14, 2016 02:00 ET (06:00 GMT)