TIDMPHD
RNS Number : 3153K
PROACTIS Holdings PLC
28 August 2019
Proactis Holdings PLC
Trading Update & Notice of Results
Proactis Holdings PLC, the business spend management solution
provider, provides an update on trading for the financial year
ended 31 July 2019.
Trading Update
The Group's performance was at the Board's expected levels
following the completion of the operational review announced
earlier in the year, and it is now focused on delivering the
strategy set out at that time. Significant progress has been made
and the delivery of the associated benefits are on target. The
Board will provide further detail of this progress as part of its
final results.
The Board announces that it expects to report an increase in
revenue1 to GBP54.1m (2018: GBP52.2m) with Adjusted EBITDA1 at
GBP15.0m (2018: GBP17.3m). Net bank debt2 as at 31 July 2019 has
reduced following the generation of GBP5.1m of adjusted net free
cash flow in the second half of the year and is expected to be
GBP36.5m (31 January 2019: GBP39.3m) and remains fully serviced and
within covenants. Adjusted net free cash flow is stated after
adding back a net GBP1.9m of non-recurring cash flows, which relate
principally to the non-core costs of restructuring the Group's
corporate structure, closure of certain offices and the associated
employment costs.
Deal intake for the year was solid and the Group secured a total
contract value ("TCV") of GBP11.3m (2018: GBP12.1m) from 60 new
names (2018: 64) and 127 upsell deals (2018: 120). The Board
expects to see an increase in both the number of new name and
upsell deals, along with the associated TCV, as benefits of moving
toward a consistent go to market strategy for the Group's US,
French and German teams are realised.
Following the acquisition of Esize Holdings BV ("Esize") on 6
August 2018, the Board is pleased that the post-acquisition
contribution of Esize is in line with expectations with revenue(1)
of GBP5.3m and Adjusted EBITDA(1) of GBP1.9m. This level of
performance is sufficient to crystallise the full payment of
Deferred Consideration as described within the announcement on 7
August 2018 and that is fully provided for within the Group's
balance sheet.
Accelerated Payment Facility ("APF")
The Board was delighted to secure a specific committed facility
provided by HSBC UK of GBP20m during the period to support the
delivery of the Group's APF. The APF will enable the Group to fund
early payments against approved invoices for suppliers. The Board
currently anticipates that the product will be deployed in a live
environment with the Group's own suppliers during October 2019
before being offered to a number of early adopters.
Formal Sales Process Update ("FSP")
The Board has received a number of expressions of interest
following the Company's announcement of the FSP on 29 July 2019 and
intends to update shareholders following a careful review of these.
As previously expressed, at this early stage, the Board reiterates
that there can be no certainty that any offer will be forthcoming
or the terms of any such offer.
Notice of Results
The Group currently intends to release its Final Results for the
financial year ending 31 July 2019 on 31 October 2019, but this
date is subject to change in light of any requirements arising from
the FSP described above.
Recognition by Gartner
The Group has again been identified by Gartner Inc. in its Magic
Quadrant as one of the top 13 global software vendors for
Procure-to-Pay suites, supporting the Group's mission to provide
best-in-class spend management solutions. The key criteria for
evaluating this recognition include: completeness of vision: market
understanding, marketing and sales strategy, product strategy,
business model, vertical/industry strategy, innovation and
geographic strategy; and ability to execute: product/service
capabilities, overall viability, sales execution/pricing, and
market responsiveness/track record, marketing execution, operations
and customer experience.
Tim Sykes, CEO commented:
"We are encouraged by the Group's performance and especially the
level of cash generation in the second half of the year. This has
reduced net debt substantially and we expect this level of cash
flow performance to continue as the Group delivers on the benefits
identified during the operational review.
"We have also made significant changes to our management team
and processes - the combination of this, along with our current
financial performance, offers a stable platform on which the Group
can build in order to exploit the considerable opportunities open
to it.
"With these opportunities fully determined following our
operational review, our teams are deploying their go-to-market and
product plans to deliver them on a sustainable and long-term basis.
We are excited about the opportunity to replicate our strong
performance in the UK and the Netherlands across all of the Group's
territories.
"It is extremely pleasing to be able to provide such a positive
update on the progress of our APF which is now close to market.
"We approach 2020 with confidence and energy and I am confident
that we will be able to demonstrate substantial progress in our
business."
(1) Revenue and Adjusted EBITDA are unaudited and Adjusted
EBITDA is stated before the Company's assessment of non-recurring
administrative expenses, amortization of intangible assets and
share based payments.
(2) Net bank debt is unaudited and is calculated excluding the
$3.75 million convertible unsecured loan notes due 2022 and
convertible at GBP1.65 per share arising from the Perfect Commerce
acquisition and issued on 4 August 2017, and the EUR3 million
convertible unsecured loan notes due 2023 and convertible at
GBP1.75 per share arising from the esize acquisition and issued on
8 August 2018.
This announcement contains inside information for the purposes
of article 7 of Regulation 596/2014
Financial expectations noted above are unaudited and are subject
to the completion of year-end financial close and audit
processes.
For further information, please contact:
Proactis Holdings PLC 01937 545070 x1115
Tim Sykes, Chief Executive Officer investorcontact@Proactis.com
finnCap Ltd
Stuart Andrews/Henrik Persson/Carl Holmes/Simon
Hicks - Corporate Finance
Andrew Burdis/Richard Chambers - ECM 0207 220 0500
Alma PR
Rebecca Sanders-Hewett, Hilary Buchanan, Sam 020 3405 0205
Modlin Proactis@almapr.co.uk
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 1,000
buying organisations around the world from the commercial, public
and not-for-profit sectors.
Proactis has been quoted on the AIM market of the London Stock
Exchange since June 2006.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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