Netcall Regulatory News (NET)

20 July 2022

NETCALL PLC 

("Netcall", the "Company" or the "Group")

Trading Update and Notice of Results

Strong demand driving results above FY22 market expectations

Netcall plc (AIM: NET), a leading provider of intelligent automation and customer engagement software, is pleased to provide the following update on trading for the year ended 30 June 2022.

Following a strong trading period with good demand across our product portfolio, the Board expects full year results to be ahead of market expectations(1).

Revenue is expected to grow by 12% to £30.5m (FY21: 8% and £27.2m) and adjusted EBITDA(2) by 20% to £6.4m (FY21: 21% and £5.3m). This includes a £0.3m contribution from the significant $19m financial services contract win announced on 10 June 2022 ("Contract Win"), with the vast majority of the revenue from the contract to be recognised in future periods.

Netcall's cloud offerings continued to grow strongly and cloud revenue is expected to increase by 30% to £10.7m (FY21:26% and £8.3m).

Cloud annual contract value(3) ('ACV') increased by 60% to £15.0m (FY21: 25% to £9.4m) contributing to total ACV growth of 31% to £24.2m (FY21: 10% to £18.5m). Excluding the Contract Win, cloud and total ACV showed continued strong momentum with 26% and 14% growth respectively.

The Group's cash position at year end was £17.6m (30 June 2021: £14.5m) reflecting strong trading and after the payment of £5.2m for early redemption of loan notes announced on 9 November 2021 and the remaining deferred VAT due to Covid-19 and excludes any contribution from the Contract Win. This more than offsets borrowings of £3.5m (30 June 2021: £6.9m) resulting in net funds increasing by 97% to £13.4m (30 June 2021: £6.8m).

Henrik Bang, Chief Executive, commented:

"We continued to see strong demand across our key market segments, especially for cloud-based solutions which resulted in double-digit revenue and profitability growth.

"Netcall has a significant and growing market opportunity as organisations increasingly implement digital strategies and business models. Our solutions' market relevance and potential are illustrated by the increasing growth rates and was further demonstrated by the significant $19m global contract win announced in June 2022 which resulted in a material upgrade to the Company's FY23 expectations.(4).

"We continue to invest in our business to ensure it remains well positioned to take advantage of the market opportunity. The Group's strong trading momentum coupled with a robust balance sheet, growing recurring revenues and advanced digital solutions, provide the Board with confidence in the Group's continued success."

Notice of Results

Netcall expects to announce audited results for the year ended 30 June 2022 on 5 October 2022.

(1) Netcall believes that consensus market expectations for the year ending 30 June 2022 is revenue of £29.8m, adjusted EBITDA of £6.0m and Net cash of £8.0m.

(2) Profit before interest, tax, depreciation and amortisation adjusted to exclude the effects of share-based payments, acquisition, impairment, profit or loss on disposals, contingent consideration and non-recurring transaction costs.

(3) ACV, as of a given date, is the total of the value of each cloud and support contract divided by the total number of years of the contract (save that the contract win announced on 10 June 2022 is included in FY22 ACV as its first-year contribution).

(4) Netcall believes that market expectations for the year ending 30 June 2023 were upgraded by 10% for revenue to £36.0m and 17% for Adjusted EBITDA to £7.6m on 10 June 2022

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About Netcall

Netcall's Liberty software platform with Intelligent Automation and Customer Engagement solutions helps organisations transform their businesses faster and more efficiently, empowering them to create a leaner, more customer-centric organisation. 

Netcall's customers span enterprise, healthcare and government sectors. These include two-thirds of the NHS Acute Health Trusts and leading corporates such as Legal and General, Lloyds Banking Group, ITV and Nationwide Building Society.

Prior to publication the information communicated in this announcement was deemed by the Company to constitute inside information for the purposes of article 7 of the Market Abuse Regulations (EU) No 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations No 2019/310 ('MAR'). With the publication of this announcement, this information is now considered to be in the public domain.