Rosslyn Data Regulatory News (RDT)

Rosslyn Data Technologies plc

("Rosslyn" or "the Company")

Trading Update

Rosslyn Data Technologies plc (AIM: RDT), a global leader in big data cloud technology, announces that it expects to release its results for the year to 30 April 2016 in early September and is pleased to provide an update on trading.

Revenue for the year to 30 April 2016 is expected to be between £3.9m and £4.0m, an increase of over 40% on the previous financial year.

The loss for the year, before income tax, is expected to be no more than £2.4m (FY 15, £3.5m loss, excluding exceptional items and share based payments). As at 30 April 2016, Rosslyn had net cash balances of approximately £1.8m (FY 15, £4.7m).

The Company has agreed terms with a number of new customers. Whilst these contracts were not signed during the 2016 financial year as had been intended, they are expected to be signed imminently and the Directors continue to be encouraged by the performance of the Company, which they believe reflects the solid foundations that have been established since Rosslyn floated in April 2014.

The Directors anticipate revenue growth to remain strong given the Company's high levels of annualised contract revenue and the low churn rate, which remains below 5%. The number of customers over the same period has risen from 38 to 168 and with improving visibility in Rosslyn's partner channel (e.g. PwC and Genpact). The Directors anticipate that the Company's client acquisition rate will remain healthy.

At the same time as pursuing and achieving growth, the Company has retained tight control over costs and continued to focus on achieving cash flow break even. This careful approach has seen the cash burn rate of the Company continue to reduce and it is the Directors' expectation that, with a lower than expected cost base and continued strong growth, the Company will achieve cashflow breakeven during the calendar year. Cash flow breakeven is a principal milestone of the Board, which continually manages the conflicting opportunities relating to the Company's rate of growth and speed of achieving this milestone.

During the year, the Board has focused on three key areas of sales and marketing, R&D and operational and financial management. In all three, we have seen material improvements being made. 

· In sales and marketing, the Company's strategy of building a partner channel is beginning to bear fruit as Partners accelerate their adoption of the RAPid platform within their clients. This strategy is having a marked impact on reducing Rosslyn's sales cycles, improved conversion rates and lower cost of client acquisition. The Company is also pleased to see that the average enterprise contract has increased from c.£50,000 at the time of the IPO to c.£90,000 whilst the duration has remained at between 2 and 3 years.

Elsewhere, Rosslyn has recently made significant inroads into deepening its relationships with Microsoft where it is now actively engaged with Microsoft's sales teams in Europe and the US on a number of joint opportunities. The Board believes that the speed at which this relationship has unfolded is promising and the number and size of the opportunities that the Company is working through is encouraging. The Company expects to close the first of these over the near term which will provide the necessary case study from which to accelerate this work.

Through the combination of Rosslyn's partner network and direct sales team the Company has a robust funnel of new business, which gives the Directors confidence that Rosslyn is in a strengthening position to deliver on its key milestones.

· The R&D team has successfully transitioned the RAPid platform to Microsoft's Azure, and in doing so has extended Rosslyn's SaaS (Software as a Service) offering to include an enterprise ready PaaS offering (Platform as a Service). Strategically, this is an important step forward for Rosslyn as it provides it, and its customers and partners, with immediate scale and access to a growing ecosystem of fully integrated best of breed data and analytical technologies including Hadoop, R for predicative modelling, data factory for data provisioning and PowerBI for visualisation. Through the combination of Rosslyn's data technologies and IP, Rosslyn's platform enables partners to access these with greater ease and delivers clients a compelling data and analytical solution. The Directors believe that through the cloud and solutions like the RAPid platform, the way the market buys and consumes their analytical technologies is changing.  

At the end of this month, Rosslyn's R&D team will be releasing a new technology that enables a client to extract, process and visualise their data with less effort. By focusing on developing these smart technologies, that mask the complexities of analytics, the Directors believe that it greatly improves Rosslyn's clients' success rates and returns on investment. Enabling Rosslyn's clients with easy to use and intuitive solutions is an essential ingredient to them being able to move at speed and with certainty.

· Operationally, Rosslyn continually looks to upskill and retain its talented workforce and through careful execution has also seen revenue per full time employee increase from £55,000 to £80,000 since IPO. Rosslyn's ability to scale is improving as its partner activity levels increase. The Directors expect this metric to continue to move positively. Financial management remains extremely tightly controlled with the Directors focussed on hitting the key milestone of cash flow breakeven.

Overall the Board remains extremely positive about the future and expects this next year to be one of strong progress.

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