Blancco Technology Group PLC – BLTG – Interim results

Blancco Technology Group PLC – BLTG – Interim results

Blancco Technology Group plc (AIM: BLTG, "Blancco", the "Company" or the "Group"), the industry standard in data erasure and mobile device diagnosticsis pleased to announce its unaudited interim results for the six months ended 31 December 2020.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

£m unless otherwise stated

H1 FY21

H1 FY20

Change

Revenue

17.4

17.4

0%

Gross Profit

16.2

16.5

(2%)

Adjusted EBITDA*

5.3

4.4

20%

Adjusted Operating Profit*

2.9

2.5

16%

Operating Profit

0.7

0.7

(4%)

Profit before taxation

0.5

0.7

(21%)

Adjusted Operating Cash Flow**

5.4

2.4

130%

Cash generated from continuing operations

5.0

1.6

215%

Diluted Earnings per share

1.08p

1.40p

(23%)

Net Cash

8.2

5.4

 

·       Despite challenging conditions resulting from the pandemic, revenue was stable at £17.4m (constant exchange rates ('CER') +1%):

o  Enterprise revenue increased by 6% (CER +7%) to £6.4 million (H1 FY 2020: £6.0 million)

o  Mobile revenue in line with prior period (CER +2%) at £5.8 million (H1 FY 2020: £5.8 million)

o  IT Asset Disposition ("ITAD") revenue decreased by 7% (CER -7%) to £5.2 million (H1 FY 2020: £5.6 million)

o  The second quarter of FY21 was Blancco's highest revenue generating quarter in its history

·       Net cash balance of £8.2m (31 December 2019: £5.4m)

·       Adjusted Operating Cash Flow at 102% (H1 FY 2020: 53%) of Adjusted EBITDA following strong cash generation in the period

·       Strong growth in APAC which appears to be further progressed in its COVID-19 pandemic recovery:

o  APAC revenue increased by 27% (CER +28%) to £6.2 million (H1 FY 2020: £4.8 million)

o  EMEA revenue decreased by 5% (CER -7%) to £6.3 million (H1 FY 2020: £6.7 million)

o  North America revenue decreased by 17% (CER -14%) to £4.9 million (H1 FY 2020: £5.9 million)

 

OPERATIONAL HIGHLIGHTS

·      Continued expansion of our network of blue-chip channel partnerships in Enterprise;

o  Channel revenue now represents 47% of Enterprise revenue (H1 FY 2020: 40%)

o  Master Services Agreement signed with major Global Systems Integrator

o  Agreement with Deloitte extends beyond India into broader Asian region

o  Signed agreement with US government IT solutions provider, Carahsoft Technology Group ("Carahsoft"), to provide solutions through AWS Marketplace

·      Significant increase in volume of mobile handsets being handled by mobile customers despite pandemic disruption to retail, signalling that the second hand mobile market is developing rapidly, globally

·      Established partnership with new global insurer on mobile handset insurance program

 

CURRENT TRADING AND OUTLOOK

·        Pipeline and early Q3 sales activity leads to confidence over strong growth anticipated in second half of the year

·        Data security and ESG considerations expected to drive growth in ITAD and Enterprise segments as trading conditions normalise post COVID-19

·        Blancco well positioned to move into next phase of growth as it capitalises on strong structural tailwinds and sector-leading data sanitisation and diagnostic technologies

·        Revenue and profit growth is continuing in line with the Board's expectations

*Adjusted profit measures are stated after excluding expenses relating to share option schemes, exceptional costs & incomes and the amortisation of acquired intangible assets

** Adjusted operating cash flow is operating cash flow excluding taxation, interest payments & receipts and exceptional payments

Matt Jones, Chief Executive said:

"We are pleased with the results generated during the first half of our financial year, achieved during a period when we have had to replace £1.4m of revenue from a large mobile carrier contract in the first half of the previous year which ended with effect from 31 December 2019 whilst also contending with the trading conditions of the COVID-19 pandemic which also were not present in the comparator period.

"We believe that the results generated in the APAC region, where the management of the pandemic has been much less disruptive to business, gives us an indication of the growth potential in the business as a whole, once normal trading conditions resume.

"Whilst there is ongoing uncertainty arising from COVID-19, we are optimistic that Blancco is well placed to prosper as global trading conditions return to normality. Even during this most challenging period, we have continued to grow profit as well as generate significant amounts of cash. The Board is confident that Blancco is positioned to deliver sustained levels of growth going forwards in line with our expectations."

 

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