31 January 2024
Dotdigital Group plc
(“Dotdigital”, the “Company”, or the “Group”)
Trading Update & Notice of Half Year Results
Dotdigital Group plc (AIM: DOTD), the leading SaaS provider of an all-in-one customer experience and data platform (CXDP), announces a trading update for the six months ended 31 December 2023 (“H1 2024”). The trading performance reported in this statement is based on unaudited management accounts.
Highlights
| · | Revenue tracking in line with market expectations for the full year, with H1 2024 up by 15% to £38.7m (H1 2023: £33.8m)1 |
| · | Organic revenue increased by 11% in constant currency (9% reported to £36.9m)Adjusted profit before tax tracking in line with market expectations for the full year2 |
| · | Fresh Relevance integration on track, with cost synergies slightly ahead of schedule and first new joint customers won |
| · | Functionality recurring revenue (licence, data charges and additional functionality) up by 8% to £13.2m (H1 2023: £12.2m) |
| · | Organic average revenue per customer (ARPC) (excluding Fresh Relevance) growth of 8% to £1,700 continues in line with customer revenue growth |
| · | Cash balance on 31 December 2023 of £37.1m (31 December 2022: £49.6m), in line with expectations post-acquisition of Fresh Relevance2 and reflecting usual working capital cycles |
Overview
The Board is pleased to report that trading and financial performance for the first half of the year was in line with Board expectations, with prior year investment in the Group’s product portfolio and operations driving stronger traction with higher value customers and increased bookings.
The integration of Fresh Relevance, acquired in September 2023 is progressing on track. Significant strides have already been made to position the combined businesses for scalable growth, including development of a unified onboarding process, implementation of a single sign-on and the establishment of a joint go-to market strategy.
A key rationale behind the acquisition was to grow the Group’s addressable market and increase traction with higher value customers. Encouragingly, the addition of Fresh Relevance has already led to new direct deals with new customers in larger size brackets and the pipeline continues to grow. In line with another important objective for the Group, initial uptake of the personalisation platform by existing Dotdigital customers has been good.
The Group is pleased to report growth in all regions. The largest, EMEA, continues to grow in line with expectations as customers move toward comprehensive, all-in-one solutions. APAC maintains its trajectory of strong, double-digit growth following previous investment. Commercial progress in North America continues to accelerate from FY23 levels, with percentage sales growth in the high single digits and a growing pipeline of opportunities.
Revenue from strategic partnerships continued to grow, albeit more modestly than in H1 2023, with growth in CRM connectors offset by continued subdued activity through the larger ecommerce connectors.
Outlook
As we enter the second half, trading conditions remain positive. While cognisant of wider macroeconomic pressures, the demand for impactful and efficient digital marketing capabilities is growing as organisations across industries look to attract, convert and retain customers. The investment we have made in enhancing our product offering as we build out our comprehensive CXDP platform, infusing AI, personalisation and omni-channel functionality, strengthens our market position and leaves us well placed for the future.
Notice of Half Year Results
The Group expects to announce its results for the six months ended 31 December 2023 on 5 March 2024.
Milan Patel, CEO of Dotdigital, commented:
“We have successfully delivered strong growth, achieved a higher ARPC, and increased bookings in the period. I am encouraged by the momentum that is building in the US, whilst EMEA and APAC continue to be in great shape, albeit at different stages of development.
The Fresh Relevance acquisition is every bit the fit we hoped it would be. Our teams have gelled well and the initial work on combining the technology has been completed. It’s testament to the speed and quality of the integration that we are already making meaningful headway together with our combined offering with higher value organisations.
We are feeling positive going into the second half. Of course, macroeconomic uncertainties are likely to persist but, with strength across all regions, an increasingly compelling product and market trends that work in our favour, we enter it with confidence.”
1 Market consensus for revenue for the year to 30 June 2024 is £78.5m.
2 Market consensus for adjusted profit before tax for the year to 30 June 2024 is £15.7m. Adjustments include share based payments, acquisition costs and other exceptional items.
For further information please contact:
| Dotdigital Group Plc Milan Patel, CEO Alistair Gurney, CFO | Tel: 020 3953 3072investorrelations@dotdigital.com |
| Alma Strategic CommunicationsHilary BuchananDavid IsonKieran Breheny | Tel: 020 3405 0210dotdigital@almastrategic.com |
| Canaccord Genuity (Nominated Advisor and Joint Broker) Bobbie Hilliam, Corporate FinanceJonathan Barr, Sales | Tel: 020 7523 8000 |
| Cavendish Capital Markets Limited (Joint Broker) Jonny Franklin Adams, Corporate FinanceSunila de Silva, Equity Capital Markets | Tel: 020 7220 0500 |
| Singer Capital Markets (Joint Broker) Shaun Dobson, Corporate FinanceAlex Bond, Corporate Finance | Tel: 020 7496 3000 |