Dotdigital performs in line with expectations in first half

(Sharecast News) - Marketing software-as-a-service (SaaS) company Dotdigital said in a trading update on Thursday that it was expecting a first half performance in line with full-year market expectations.
The AIM-traded firm said group revenue increased 10% year-on-year to £30.9m for the six months ended 31 December, driven by growth in sales from both new and existing customers.

It said that, against a "strong" prior year comparator, revenue from SMS sends was now at more normalised levels after immediate pandemic-related activity.

Research and development was still core to Dotdigital's growth strategy, the board said, with recurring revenues from enhanced product functionality growing 22% to £10.8m.

Average revenue per customer was ahead 19% at £1,422 per month, driven by a continued increase in new and existing client spend.

Revenue, adjusted EBITDA and adjusted profit before tax was expected to be in line with market expectations, the board said, adding that the firm's cash balance at 31 December totalled £40m, up from £32m at the end of June.

"The group delivered another half year period of double-digit growth, with continued sales momentum across channels from new and existing customers," said chief executive officer Milan Patel.

"These results demonstrate a growing interest in our core offering and continued execution of the growth strategy in a structurally growing market."

Patel said the company's 'Engagement Cloud' platform was "one of the most technically advanced yet user-friendly" offerings in the market, with the investment Dotdigital was making in its capabilities putting it in a good position to capture the "full spectrum of opportunities" presented by an ongoing shift to digital marketing.

"The group's continued growth is supported by a strong balance sheet, a recurring SaaS business model and healthy sales pipeline, putting us in a strong position as we enter the second half of the year.

"Whilst cognisant of the fluid global economic environment, the board is confident in the continued positive performance of the business."

At 1523 GMT, shares in Dotdigital Group were down 23.01% at 137.05p.