Dillistone Group Plc, the AIM quoted supplier of software for the international recruitment industry, is pleased to announce a trading update ahead of its Annual General Meeting today. The board made the following comments about the company performance.
The first five months of the year has seen strong incoming orders, with both Voyager Software and Dillistone Systems reporting incoming orders well ahead of the same period in 2017. The previously announced loss of a major client and the impact of exchange rates have had a negative impact on recurring revenues compared to the same period in the previous year however the Board is aiming to deliver a growth in profits year on year, prior to the impact of the anticipated GatedTalent loss, acquisition related items and the impact of IFRS15 adjustments.
The first half has also seen us generate our first revenues from GatedTalent, our new portal which allows executives to share information with trusted recruiters.
Prior to launch, our expectation was that the General Data Protection Regulations (“GDPR”) would lead to our clients sending in the region of 1,000,000 Compliance Messages to senior executives around the World. We are pleased to report that, with approximately half of our clients still to complete the initial mailings, we have already significantly surpassed this number and the product has performed well from a technical perspective.
We anticipated that a certain percentage of individuals receiving Compliance Messages via emails would subsequently visit our website and as a result create profiles. Conversion rates among our early adopters were good. However, as the volume of GDPR compliancy emails from all sources increased, recipients increasingly failed to open them. Ultimately, the number of profiles created from those initial mailings is disappointing.
However, we are pleased to see that of the executives who do land on our website following receipt of a GDPR message, approximately 8% do create profiles. Furthermore, we have explored alternative approaches to creating profiles and as a result, profile numbers are growing. Our current expectation is that we will see an acceleration in profiles created on the platform, with June likely to show our best month to date.
We are also delighted to report that the Candidate Pool is exceptionally senior with “Chief Executive” being the most common current job title among our members. Members are located in more than 90 countries: our largest group of members are located in the UK, and our second largest territory among members is the US. We are pleased to note that the US is our fastest growing territory.
We anticipate turning on our Search and Connect functionality in early autumn at which point we expect that the platform membership will be at a level that will allow monetisation of the profiles to begin.
We continue to market the service to executive search firms and are pleased to report that, within 9 months of the launch of the product, GatedTalent has already signed up more clients than our largest comparable UK based competitor in GatedTalent’s market. As a consequence, the Board remains excited by the potential of Gated Talent and believes that the delivery of the GatedTalent “Search and Connect” functionality later this year will have a positive impact on sales for our Dillistone Systems division.
We had anticipated that GatedTalent would be loss making in 2018 and this remains the case. The lower than anticipated initial number of profiles and subsequent delay to profile monetisation will impact further on revenue. As stated above, the Board is aiming to deliver a growth in profits year on year, prior to the impact of the anticipated GatedTalent loss, acquisition related items and the impact of IFRS15 adjustments.
Our balance sheet remains strong, with a cash balance of £1m as at 22 June 2018.
Dillistone Group Plc (www.dillistonegroup.com) is a leader in the supply and support of software and services to the recruitment industry. It has five brands operating through three divisions: Dillistone Systems, which targets the executive search industry (www.dillistone.com); Voyager Software, which targets other recruitment markets (www.voyagersoftware.com); and GatedTalent, the next generation executive recruitment platform (www.GatedTalent.com).
Dillistone has made three acquisitions: Voyager Software in September 2011, FCP Internet in July 2013 and ISV Software in September 2014. The Group operates under the FileFinder, Infinity, Evolve, ISV and GatedTalent brands.
Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006. The Group employs over 100 people globally with offices in London (head office) Basingstoke and Southampton, Frankfurt, New Jersey and Sydney.