PHD.L Regulatory News (PHD)

PROACTIS Holdings PLC

Trading update

PROACTIS Holdings PLC, the specialist Spend Control solution provider, is pleased to announce a trading update for the year ended 31 July 2014.

Financial highlights

§ Trading expected to be in line with market expectations

- Reported revenues is expected to be circa £10.2 million (2013: £8.0 million)

- Adjusted EBITDA is expected to be circa £1.8 million (2013: £1.2 million)

§ Recurring annualised revenue has increased to circa £14.0 million (2013: £5.4 million)

§ Order intake of circa £5.3 million from 38 new deals during the year ended 31 July 2014, including part period (only) for the acquired businesses (the "Acquisitions") (2013: £2.8 million from 35 new deals)

§ Order book at 31 July 2014 circa £14.3 million (2013: £6.2 million)

Operational highlights

§ Completion of three key strategic acquisitions (the "Acquisitions")

§ £2.9 million raised on equity markets, and £2.5 million raised through non-dilutive bank debt to support the Group's M&A strategy

§ In pilot with 'Activate', the Group's new Global Trading Network offering

§ Significant increase in client base to over 500 (2013: circa 300)

Proactis

PROACTIS' core software business has performed strongly during the year with 33 new deals delivering £4.8 million of Initial Contract Value ('ICV'). Reported revenues have grown by 6.3% to approximately £8.5 million (2013:£8.0 million) and the order book has grown by 48% to £9.2 million (2013: £6.2 million).

The subscription model renewal programme is performing well and has retained 100% of its clients in the year, delivering £0.9 million of ICV.

In addition, existing customers continue to extend the footprint of the Group's software with 81 upgrade deals delivering £1.2 million ICV.

EGS Group Limited ('EGS')

The Group acquired EGS on 7 February 2014. The strategic rationale was to consolidate the Group's position as the largest independent public sector eProcurement solution provider to the UK public sector and the realisation of significant cost based synergies.

EGS has added 5 new names to the Group's client base and has retained 100% of its clients since 7 February 2014, delivering £1.0 million of order intake in the period.

During the six months to 31 July 2014, the Group has achieved its target cost savings of £0.5 million per annum and expects the realisation of further savings over the coming year.

Intesource Inc ('Intesource')

The Group acquired Intesource on 2 June 2014. The strategic rationale was to acquire a customer base delivering a high degree of profitable contracted revenues and strengthening the Group's presence in the key US market, with significant opportunity for product cross-selling.

Intesource has traded in line with expectations since 2 June 2014 and there is a small pipeline of cross-selling opportunities developing.

Information on Intelligent Capture Limited ('IC')

IC was acquired on 1 August 2014 and is one of the UK's leading providers of document scanning and optical character recognition services. The acquisition is strategically important, as it will support the roll-out of the Group's milestone new offering, Activate, to its customer and vendor network.

Rod Jones, CEO commented:

"Trading across the Group has been strong with some excellent deals being signed, especially in the US for PROACTIS' core product. Bolstered by the Acquisitions, the Group's reported revenues increased by 28% to £10.2 million and its order book increased by 131% to £14.3 million. The core business achieved record revenues of £8.5 million, 6% up on the prior year, and its order book increased by 50% to £9.3 million. We look forward to further expanding our global client base and the breadth of relationships with our existing clients in the coming year.

"This has been a transformational period for the Group. It has seen the near completion of our transition to a blended SaaS/perpetual business model, commenced during 2010, and an aggressive start to our M&A strategy. The Acquisitions have been additive to either technological or operational expertise but all have added client bases with long term relationships and predictable, if not contracted, revenues.

"In addition, we are particularly excited about our new offering, Activate, and the monetisation of the Global Trading Network and the associated financing opportunity which is an important step in the Group's ambitious growth strategy."

Enquiries:

Notes to Editors:

PROACTIS creates, sells and maintains specialist software which enables organisations to streamline, control and monitor all internal and external expenditure, other than payroll. PROACTIS is used in approximately 500 organisations around the world from the commercial, public and not-for-profit sectors.

PROACTIS is head quartered in Wetherby, West Yorkshire. It develops its own software using an in-house team of developers and sells through both direct and indirect channels via a number of Accredited Channel Partners.

PROACTIS floated on the AIM market of the London Stock Exchange in June 2006.

CLOUD COMPUTING is defined as location-independent computing, whereby shared servers provide resources, software, and data to computers and other devices on demand, as with the electricity grid.