Pelatro PLC Trading update (2817M)

TIDMPTRO

RNS Number : 2817M

Pelatro PLC

10 January 2023

10 January 2023

Pelatro Plc

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

Trading update

Pelatro Plc (AIM: PTRO), the Customer Engagement Hub software specialist for enterprises, announces the following update to trading for the year ended 31 December 2022.

The Group is in the advanced stages of renegotiating a license contract for its mViva product entered into earlier in 2022 to convert it into a managed services contract. If so renegotiated, the cash flow quantum and profile would remain broadly unchanged, but the Group would benefit from an addition to recurring revenue (of just under $0.4m) and the termination of the contract after 3 years and prospective renewal on revised terms thereafter, rather than a perpetual license. If not recognised in 2022 following renegotiation is expected to reduce FY2022 revenue by c. $0.9m.

Furthermore, the Group agreed terms for a license contract in late 2022, which revenue was expected to accrue in FY2022; however, it is now expected that the majority of the revenue from that contract will be recognised early in 2023. The impact on revenue for FY2022 will be in the order of $1.5m although the cash income from the contract remains broadly unchanged in timing and amount. ARR is likewise unaffected.

Additionally, the Group has been unable to agree on appropriate terms of implementation of a license contract entered into in 2021 with a small customer. The Group may withdraw from this contract which would lead to a provision of c.$0.3m being made against the carrying value of the contract (in contract assets). No penalties or similar costs would arise from such a withdrawal.

The $2.4m revenue adjustments referenced above will have a commensurate impact on profitability in FY2022 (but are expected to contribute and be recognised in following years), hence FY2022 outturn is now expected to be materially below current market expectations

For further information contact:

 
 Pelatro Plc 
 Subash Menon, Managing Director                   c/o finnCap 
 Nic Hellyer, Chief Financial Officer 
 
 finnCap Limited (Nominated Adviser and 
  joint broker)                            [phone] 
 Carl Holmes/Milesh Hindocha (Corporate 
  Finance) 
 
 Dowgate Capital Limited (joint broker)    [phone] 
 Stephen Norcross 
 

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

Notes to editors

The Pelatro Group was founded in March 2013 by Subash Menon and Sudeesh Yezhuvath with the objective of offering specialised, enterprise class software solutions for customer engagement principally to telcos who face a series of challenges including market maturity, saturation and customer churn.

Pelatro provides its "mViva" platform for use by customers in B2C and B2B applications, and is well positioned in the Customer Engagement space. Our technology orchestrates the digital journey of the customers of the telcos through contextual, relevant and real time offers and loyalty programs across multiple channels including websites, social media, apps and others.

For more information about Pelatro, visit www.pelatro.com

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January 10, 2023 08:30 ET (13:30 GMT)