Last checked at 21 Jan 2021 07:00
dotdigital Group plc
("dotdigital" or the "Company")
Trading Update and Notice of Half Year Results
Continued strong organic growth, underpinned by delivery against three strategic pillars
dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of an omnichannel marketing automation and customer engagement platform, announces a trading update ahead of the Company's half year results for the six months ended 31 December 2020 ("H1 2021").
The trading performance reported in this statement is based on unaudited management accounts. The Group is pleased to report a strong first half performance driven by continued execution of the organic growth strategy, namely ongoing product innovation, geographic expansion and growth through strategic partnerships.
Financial highlights
· | Organic revenue from Continuing Operations up by c.22% to £28.2m (H1 2020: £23.1m) driven by strong growth in sales from new and existing customers and uptake of SMS |
· | R&D continues to underpin dotdigital's growth strategy with recurring revenues from enhanced product functionality growing by 20% to £8.9m from £7.4m in the comparative period |
· | Adjusted EBITDA1 and adjusted profit before tax from Continuing Operations expected to be in line with the recently upgraded market expectations; we continue to monitor and respond to the pandemic as it develops |
· | ARPC2 up by 20% to £1196 per month (H1 2020: £999 per month) driven by an increase in new and existing client spend alongside customers adopting a wider array of channels |
· | Cash balance at 31 December 2020 of £27.6m (FY 2020: £25.4m) |
Operational highlights
Product innovation
Product enhancements in the period include:
· | Improved AI and data visualisation for product recommendations, customer persona modelling and product affinity capabilities |
· | Intelligent contact data capture capabilities for chat, along with alerting and multi-language support and a more personalised customer experience |
· | Support for the new Google AMP for Email standard for powerful, dynamic, rich, app-like data driven content within emails |
· | Marketing preference management for Dynamics 365 customers |
· | New dotdigital connector for the Microsoft Power Automate platform |
Geographic expansion
· | International sales represented 33% of total sales (excluding Discontinued Operations); (H1 2020: 32%). We have seen a strong pick-up in UK SMS volumes during the period. Excluding SMS, international sales represented 38% of revenue (H1 2020: 32%) |
· | Organic international revenue increased by 27% to £9.3m (H1 2020: £7.3m) |
· | EMEA region showed strong revenue growth of c.21% in the period to £21.5m (H1 2020: £17.7m) |
· | US revenue grew organically by c.25% to $6.3m, (H1 2020: $5.1m) driven by acquisition of higher value customers and growth of existing customers |
· | APAC sales, channel team expansion and increased Asia presence drove revenue from the region, which grew organically c.41% to AUS$3.5m, (H1 2020: AUS$2.5m) |
Strategic partnerships
· | We continue to build pipeline and enhance our value proposition for our connectors into both ecommerce platforms and Customer Resource Management (CRM) software |
· | Sales through connectors into our strategic partners increased by 20% to £12.8m (H1 2020: £10.7m) |
· | Our Shopify connector revenue grew by 115% and our MS Dynamics connector revenue grew by 25% compared to the same period in the previous year |
· | Our relationships within both the ecommerce and CRM space continue to go from strength to strength with an enhanced go to market strategy |
· | We have accelerated investment in building a more scalable partnership program and hired an experienced leader to head up global partnerships to increase management bandwidth and focus |
Notice of 2021 Half Year results
dotdigital Group plc will announce its Half Year results for the period ended 31 December 2020 on 25 February 2021.
Milan Patel, CEO of dotdigital, commented: "H1 2021 delivered another period of strong growth and significant strategic progress, in a highly competitive environment, as customers continued to turn to us to elevate and future-proof their digital marketing strategies. At the same time, we began to see a step change in returns from the investments we have made into key areas of the business.
The fact that the majority of our growth in the period came from SMS clearly demonstrates the value of our omnichannel offering, which has grown and evolved since the acquisition of Comapi in 2017 to become a fundamental part of the Group's DNA. The headway we are making in growing our non-UK markets is accelerating, particularly in North America and APAC, and the resource we have put into strengthening and deepening our strategic partner relationships is having a substantial, positive impact on sales performance.
While Covid-related restrictions continue to cause disruption and uncertainty for organisations around the world, they have triggered a dramatic acceleration in digital transformation, from which dotdigital stands well-placed to benefit. Momentum from the first half has continued into the second, and we remain confident of delivering another year of strong sales growth and material progress against our strategic pillars."
1 Consensus adjusted EBITDA for continuing operations as at 20 January 2021, for the year ending 30 June 2021, is approx. £18.6 million. EBITDA means earnings before interest, tax, depreciation, amortisation, and before restructuring, other non-recurring costs and certain non-cash items.
2 ARPC means average revenue per customer
For further information please contact:
dotdigital Group PlcMilan Patel, CEOParaag Amin, CFO | Tel: 020 3953 3072 InvestorRelations@dotdigital.com |
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Alma PR (Financial PR) Josh Royston David Ison Kieran Breheny | Tel: 020 3405 0210 dotdigital@almapr.co.uk |
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Canaccord Genuity (Nominated Adviser and Joint Broker)Bobbie Hilliam Georgina McCooke Jonathan Barr, Sales | Tel: 020 7523 8000 |
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finnCap (Joint Broker)Stuart Andrews, Corporate FinanceAlice Lane, ECM Rhys Williams, Sales | Tel: 020 7220 0500 |
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N+1 Singer (Joint Broker)Shaun Dobson, Head of Corporate Finance Alex Bond, Corporate Finance | Tel: 020 7496 3000 |
Prior to this announcement's release, the statement contained inside information for the purposes of Article 7 of Regulation (EU) 596/2014 (MAR) (Market Abuse Regulation).