PROACTIS Holdings PLC Trading Update and Notice of Results (4922Y)

TIDMPHD

RNS Number : 4922Y

PROACTIS Holdings PLC

22 August 2018

 
 Date:              22 August 2018 
 On behalf of:      Proactis Holdings PLC ("Proactis", the "Company" 
                     or the "Group") 
 Embargoed until:   0700hrs 
 

Proactis Holdings PLC

Trading Update & Notice of Results

Proactis Holdings PLC, the global spend management and B2B eCommerce solution provider, reports a detailed update on trading for the financial year ended 31 July 2018 further to its initial update on 7 August 2018.

Trading Update

The Group has created a platform which is capable of delivering sustainable organic growth having undertaken a transformational re-organisation of its operational structure. This re-organisation has delivered net annualised cost savings of approximately GBP5.0m at 31 July 2018 and were anticipated at the time of the acquisition of Perfect Commerce, LLC on 4 August 2017 (the "Acquisition").

The Acquisition created the fifth largest player in the market by revenue, globally and it accelerated Proactis' strategy to drive scale, geographic footprint, customer opportunity, operational efficiencies and a stronger solution set into its business.

Deal intake for the year was strong. Proactis secured 64 new names with a total initial contract value of GBP8.7m (2017: 54; GBP4.1m) and 120 upsell deals with a total contract value of GBP3.6m (2017: 110; GBP2.8m). 55 of the 64 new names (2017: 44 of the 54) were subscription deals with the remainder being perpetual licence deals. This performance was at the Board's expected levels across all territories.

The Group re-iterates its expectation that it will report revenue(1) of approximately GBP52.0m (2017: GBP25.4m), Adjusted EBITDA(1) of approximately GBP17.0m (2017: GBP7.9m) and Adjusted profit before tax(1) of GBP11.0m (2017: GBP5.1m). Given that revenue(1) of GBP26.4m as reported in the interim results to 31 January 2018 announced on 24 April 2018 ("Interim Results") included approximately GBP1.0m which was non-continuing as a result of the loss of a small number of customers and also that it included the benefit of stronger US Dollar and Euro currencies, this suggests that the Group's revenue for H2 2018 was marginally ahead of underlying revenue(1) for H1 2018. The Group will present a segmental analysis of its performance within its preliminary results which will include, but is not limited to, revenue analysis by territory and buyer/supplier split.

The Group's customer retention performance has improved in H2 2018 following the exceptional losses reported in the Interim Results and advanced notifications of termination are now running at levels which the Board considers to be more normal. The Board continues to monitor this key performance indicator carefully and is making further operational changes to support this element of the Group's activities with a view to improving overall performance further.

The above factors provide the Board with confidence that the Group will return to normal, stronger rates of revenue growth during the year ending 31 July 2019 and the pipeline of opportunity remains strong for the longer term.

Net debt(2) as at 31 July 2018 is expected to be approximately GBP29.3m.

(1) Revenue, Adjusted EBITDA and Adjusted profit before tax are unaudited and Adjusted EBITDA is stated before the Company's assessment of non-recurring administrative expenses, amortisation of customer related intangible assets and share based payment charges.

(2) Net debt is unaudited and is calculated excluding the $5 million 2.0 per cent. convertible unsecured loan notes due 2022 and convertible at GBP1.65 per share. These loan notes were issued as part consideration in connection with the acquisition of Perfect Commerce, LLC on 4 August 2017 and are expected to be converted to equity.

This report does not include any contribution from or impact of the acquisition of Esize Holdings BV ("Esize") which was described within the Group's announcement on 7 August 2018.

Notice of Results

The Group intends to release its preliminary results for the financial year ending 31 July 2018 on 30 October 2018.

Hamp Wall, CEO of Proactis commented:

"I am encouraged by the progress made and expected out turn for the year which, although reduced from what I had anticipated coming into the new Group, signifies a very substantial business with excellent potential. Proactis has a strong position across all key territories and is well positioned in a growing marketplace.

"Our acquisition of Perfect Commerce has enabled us to create a platform that can deliver sustainable organic growth and our organisational structure is now set for the Group to realise the opportunities that we set out at the start of the business combination process and which remain substantial.

"Our new business performance is as strong as we had planned for and our retention performance is recovering after a disappointing period. The new name and upsell performance was strong in both volume and value and this gives me confidence that we will see a return to sustainable organic growth and strong cash generation with a significant opportunity for enhancement in North West Europe following our acquisition of Esize."

This announcement contains inside information for the purposes of article 7 of Regulation 596/2014

For further information, please contact:

 
 Proactis Holdings PLC 
 Hamp Wall, Chief Executive Officer     Via Redleaf Communications 
  Tim Sykes, Chief Financial Officer 
 Redleaf Communications 
 Elisabeth Cowell 
  Bob Huxford 
  Fiona Norman                          020 3757 6880 
 
 finnCap Limited 
  Corporate Finance 
  Stuart Andrews 
  Carl Holmes 
  Emily Watts                           0207 220 0500 
 

Notes to Editors:

Proactis creates, sells and maintains software and services which enable organisations to streamline, control and monitor all indirect expenditure. Its solutions are used in approximately 1,000 buying organisations around the world from the commercial, public and not-for-profit sectors.

Proactis is head quartered in London and floated on the AIM market of the London Stock Exchange in June 2006.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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