PHD.L Regulatory News (PHD)

24 February 2021

Proactis Holdings PLC

Trading Update & Notice of Results

Proactis Holdings PLC ("Proactis", the "Group" or the "Company"), the global spend management solution provider, today provides an update on trading ("Trading Update") for the six-month period ended 31 January 2021.

Trading Update

The Group's progression over the period has been strategically significant with encouraging commercial traction and growing pipelines in each of its operations in France, Germany and the US under the new go-to-market strategy. In addition, the Group signed its first bePayd contracts under both the buyer-funded and the Proactis-funded models.

The Board believes that delivering these milestones validates the Group's strategy and provides confidence of sustainable momentum and progression in the second half of the year and beyond.

New business deal intake for the period was strong with total contract value ("TCV") of £6.7m delivered, despite the persistence of previously announced COVID-19 related headwinds (H1 2020: £7.5m; H2 2020: £7.1m). The Board expects to progress TCV in the second half of the year as the Group accelerates pipeline conversion in the US, France and Germany and as COVID-19 deferred contracts from the first half come through.

Customer churn for the six-month period of £1.5m (31 January 2020: £2.1m) was in line with the Board's expectations and included £0.3m from Heightened Risk Accounts ("HRAs") as defined in previous announcements. Accordingly, the Board expects to be able to report further modest progression in the Group's underlying ARR, building on that reported for the year ended 31 July 2020.

The Board expects to report revenues for the six-month period of £23.7m (H1 2020: £24.5m) and Adjusted EBITDA* of £6.2m (H1 2020: £5.6m), against a comparative period unaffected by COVID-19. Operating margins have improved following the restructuring of the Group's management team and operating cost base.

Net bank debt as at 31 January 2021 was £39.7m (31 July 2020: £37.1m). The position has been impacted by lower cash levels in the Group's outsourced sourcing business resulting from lower trading volumes impacted by COVID-19 as previously reported, and cash flow from upfront costs of the restructuring of its management team and operating cost base.

Outlook

The Group expects to be able to report performance in line with Board's expectations for the period. Whilst the Board is conscious of the ongoing impact that COVID-19 is having across the business, its confidence in the Group's prospects for the mid-term has been strengthened further through the strategic milestones that have been achieved during the period. The Board looks forward to continued progression.

Notice of Results

The Group currently intends to release its interim results for the six-month period ending 31 January 2021 on 29 April 2021.

Tim Sykes, CEO, commented:

"I am encouraged by the progress the Group has made during the period as our strategy becomes embedded within our teams across the Group. We have met every milestone that we needed to in order to validate our strategy for mid-market business spend management solutions and for bePayd and we can now push forward with confidence to pursue the market opportunity we have."

* Adjusted EBITDA is calculated by adjusting profit before taxation to exclude the impact of net finance costs, depreciation, amortisation, share based payment charges and non-core net expenditure.

Financial expectations noted above are unaudited.

The information contained within this announcement is deemed to constitute inside information for the purposes of article 7 of the market abuse regulation (EU) no. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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Notes to Editors:

Proactis creates, sells and maintains software and services which enable organisations to streamline, control and monitor all indirect expenditure. Its solutions are used in approximately 1,100 buying organisations around the world from the commercial, public and not-for-profit sectors.