DGS.L Regulatory News (DGS)

16 February 2016

Digital Globe Services, Ltd.

(the "Company", the "Group" and together with its subsidiaries "DGS")

Trading Update

· Strongest H1 revenue and EBITDA performance to date

· H1 to show year-over-year revenue growth of at least 13%, gross margin in excess of 30% and double digit Adjusted EBITDA margin percentage

· The Board is confident in meeting full year market expectations

Digital Globe Services, Ltd. (AIM: DGS), a leading provider of online customer acquisition solutions for large, consumer-facing organisations, today provides an update on trading for the six months to 31 December 2015.

The Board is pleased to report that the strong trading in the second half of last year has continued into the first half of the current financial year, with the Company delivering year-over-year, double-digit revenue growth, gross margin in excess of 30%, and an Adjusted EBITDA* margin in the double digits. Group revenue is expected to be in the range of US$22M - US$24M, an increase of at least 13% over the same period last year (H1 2015: US$19.5M). EBITDA is expected to be between US$2.2M - US$2.4M, an increase of at least 400% (H1 2015: US$0.5M). The revenue and EBITDA achievement represents the Company's strongest H1 performance to date as the Company heads into its typically stronger second half.

As a result, the Board is confident in meeting full year market expectations. The Company ended the half-year with a cash balance of approximately US$0.6M with US$0.07M drawn down under its US$3M credit facility.

Jeff Cox, CEO of DGS, commented: 

"We are delighted with the Group's performance in the first half with our second consecutive, record half year period. Our revenue for the 12 months to December 2015 of c.$44M - 46M will mark the strongest 12 month period in the Group's history.

We continue to reap the benefits of the investments made in our business in 2015 through a broadening of our customer base and substantial growth in new verticals. With our strong balance sheet and continued profit generation we are confident in our strategy and ability to execute on our growth plans."

*EBITDA is a non GAAP earnings metric which is earnings before interest, taxation, depreciation and amortization. "Adjusted EBITDA" additionally excludes bank facility and other charges, foreign exchange gains or losses, extraordinary items, non-cash Employee Stock Option Plan Charges, warrants, legal costs associated with acquisitions, restructuring costs, non-recurring severance and other employee termination costs.

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Overview of DGS

Founded in 2008 with offices in London, Bermuda, Netherlands, USA and Ireland, DGS is a specialist provider of outsourced online customer, lead, and inquiry acquisition and digital media solutions for large, consumer-facing corporations. DGS delivers customers to its clients through optimised paid search, search engine optimization, mobile, integrated websites, e-mail, social media and contact centre support, receiving a fee for each customer acquired for its clients.

DGS is seeking to establish itself as the leading international provider of outsourced online customer, lead and inquiry acquisition, services, through its focus on having the premier technology platform in the industry. By using its optimising technology platform, dgSMART, and its experience of website management and digital media customer acquisition, efficient contact centre operations and other process expertise, DGS is able to acquire customers and achieve conversion rates that deliver profitable, high quality customers and valuable leads and inquiries to its clients. 

DGS employs over 700 staff in Europe, North America and Asia. The Company currently has over 100 direct and indirect client relationships globally, many of which are with companies in the US Fortune 500.