dotDigital Group Regulatory News (DOTD)

19 JANUARY 2016

dotdigital Group plc

("dotdigital" or the "Company")

Trading Update

"Strong organic growth in line with market expectations"

dotdigital Group plc (AIM: DOTD), the leading provider of intuitive email and marketing automation software as a service ("SaaS") and managed services to digital marketing professionals, today gives a trading update prior to the Company's Interim Results for the six months ended 31 December 2015. The trading performance in this statement is based on unaudited initial management estimates.

First half highlights:

· Overall revenue up 29% to approximately £12.9m (H1 2015: £10.0m);

· Monthly recurring revenues from dotmailer's SaaS based usage up approximately 35% to £10.0m (H1 2015: £7.4m);

· Creative and managed service email marketing revenues grew by 36% to £1.5m (H1 2015: £1.1m);

· Average revenue per client has grown by 31% from £400 to £525 per month;

· The total number of emails sent by the dotmailer platform has grown by 50% to 3.9 billion from 2.6 billion;

· Strong cash balances at 31 December 2015 of £14.8m (H1 2015: £9.5m); and

· Following approval at the AGM on 15 December 2015, a final dividend of 0.36 pence per ordinary share for the year ended 30 June 2015 will be paid on 29 January 2016 to those shareholders on the register on 8 January 2016.

dotdigital's organic growth strategy continues to be focussed around four core areas:

· Product innovation;

· Geographic expansion;

· Developing strategic partnerships; and

· Identifying new customer niches.

In the six months to 31 December 2015, key performance highlights against these areas were:

· Recurring revenue charges from recently released product functionality has increased by 156% compared with H1 2015; 

· Growth of our US region revenues, up approximately 84% from US$1.14m to US$2.1m. Expansion into Mid and West coast America starting to deliver good channel partnerships and direct sales opportunities;

· Six key channel partners in Australia (several of which operate across the broader APAC region). A strong sales pipeline has now started to be built from these relationships;

· dotmailer chosen by Magento as the only Platinum Technology Partner - globally. Magento is the largest eCommerce platform provider for mid-market retailers in the world with some 240,000 clients. PayPal is the only other partner appointed by Magento with this status; and

· dotmailer's Magento connector is now used by over 200 clients generating annualised revenues of more than £3.0m for dotdigital.

Simone Barratt, CEO of dotdigital, commented:

"I am delighted to report that our organic growth strategy, which focusses on mid-market and light enterprise clients, has continued to deliver strong revenue growth of 29%.

The dotmailer platform continues to evolve and innovate, providing highly sophisticated yet 'easy-to-use' marketing automation tools for our clients.

Recognition and selection by Magento as being the exclusive Platinum provider of email and marketing automation functionality to their global customer base is a ringing endorsement not only of the capability of the dotmailer platform, but also of our ability to successfully support a growing international customer base.

dotdigital will report its Interim Results for the six months ended 31 December 2015 on 23 February 2016."

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