Netcall Regulatory News (NET)

14 July 2020

NETCALL PLC

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

Trading Update

Strong trading performance delivers double-digit growth in revenue and adjusted EBITDA

Netcall plc (AIM: NET), a leading provider of Low-code and customer engagement solutions, today announces its trading update for the year ended 30 June 2020.

The Board anticipates full year revenue to be £25.1m corresponding to 10% growth (FY19: £22.9m) and adjusted EBITDA(1) growth of approximately 29% to £4.4m (FY19: £3.4m), in line with market expectations.

Cloud annual contract value(2) ('ACV') increased 25% to £7.5m (FY19: £6.0m) contributing to a 7% growth in total ACV to £16.8m (FY19: £15.7m).

Group cash increased significantly to £12.7m at 30 June 2020 (31 December: 2019: £6.5m) of which £2.2m was deferred VAT payments, resulting in a normalised cash position of £10.5m which exceeds debt of £6.7m (31 December 2019: £6.7m) and is ahead of market expectations.

Response to COVID-19

Our workforce has been working from home since March and responded fantastically to the changes asked of them, with no negative impact on productivity or ability to support and market to customers.

Due to the pandemic's impact on our customers, we adjusted our roadmap priorities to focus on the rapid development of new applications to support them. This included areas such as home working, assisting hospitals in managing changes to outpatient processes and COVID-19 responses, as well as supporting councils in providing enhanced citizen and local business support. Today, we have more than 10 new applications available in our AppShare and more in development.

These activities helped underpin continued good demand in the final quarter with, in particular, the healthcare sector performing strongly. As a result, the Group has not been required to introduce pay-cuts, furlough staff or make redundancies.

Moving forward, the Board anticipates that the disruptions caused by the pandemic will accelerate organisations' digital transformation initiatives, supporting this long-term growth driver for Netcall.

Henrik Bang, Chief Executive, said:

"Netcall had an excellent year, with double digit revenue and profit growth. Both our Low-code and Customer Engagement business areas delivered a good performance, contributing to strong cash generation.

Netcall weathered the impact from the pandemic well in the final quarter and the strong trading performance underlines the resilience of the business, the agility and dedication of our teams and the strength of the Liberty platform. Our staff responded well to the needs of our customers, rapidly deploying new applications to assist them in the support of their patients, citizens and customers.

"The strength of our Liberty portfolio, high levels of recurring revenue, strong balance sheet and breadth of customer base, provide the Board with confidence in Netcall's ability to continue to navigate the challenging environment, supporting our customers in their digital transformation."

(1) Profit before interest, tax, depreciation and amortisation adjusted to exclude the effects of acquisition, impairment, contingent consideration and non-recurring transaction costs. The trading performance is based on unaudited management accounts for the year ended 30 June 2020.

 (2) 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.

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About Netcall

Netcall helps organisations transform their customer engagement activities and enable digital transformation faster and more efficiently, empowering them to improve customer experiences and operational efficiencies.

We achieve this by delivering powerful and intuitive software that addresses the core elements of best-in-class customer experience and digital process automation. Our industry leading Liberty platform is a suite of Low-code, customer engagement and contact centre solutions which empowers business users and IT developers to collaboratively develop products and systems that 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, major telecoms operators such as BT, and leading corporates including Lloyds Banking Group, ITV and Nationwide Building Society. 

For further information, please go to www.netcall.com.

Prior to publication the information communicated in this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No 596/2014 ('MAR'). With the publication of this announcement, this information is now considered to be in the public domain.