dotDigital Group plc – DOTD – Trading Update

dotDigital Group plc – DOTD – Trading Update

dotdigital Group plc (AIM: DOTD), the leading ‘SaaS’ provider of an omnichannel marketing automation and customer engagement platform, is pleased to provide the following trading update ahead of the publication of its full year results for the year ended 30 June 2020 in November. The trading performance in this statement is based on unaudited management accounts.

Highlights

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We are pleased to report that the pandemic had minimal impact in the final quarter of our financial year due to the high level of contracted recurring revenues in the core business;

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Momentum has continued into the new financial year, despite the ongoing uncertainty around the impact of COVID-19, though management continues to monitor the current situation;

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Organic revenue from continuing operations grew by c.12% to £47.4m (2019: £42.5m)

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Adjusted EBITDA1 from continuing operations is expected to be comfortably ahead of market expectations;

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Adjusted operating profit2 from continuing operations is expected to be in line with market expectations;

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Discontinued operations are expected to be at breakeven operating profit;

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Strong cash balance of £25.4m at 30 June 2020, in line with market expectations;

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ARPC3 continued its upward trend, growing by 12% from approximately £966 per month to £1,083 per month;

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Recurring revenue as a percentage of total revenue is broadly flat YoY at 85%;

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Our intention is to pay a final dividend in line with our policy, with the expected pay-out linked to EBITDA growth; and

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Dotdigital was independently rated as a “Strong Performer” in the 2020 Forrester Wave Email Marketing Services Providers Report.

 

Notes

1. EBITDA is earnings before interest, tax, depreciation and amortisation and adjusted for acquisition costs and share-based payments

2. Operating profit is adjusted for acquisition costs and share-based payments

3. ARPC means Average Revenue Per Customer (including new customers added in period and existing customers)

Growth Strategy

dotdigital’s organic growth strategy continues to be focused around three key areas:

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Product Innovation;

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Geographic Expansion; and

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Developing strategic partnerships.

Product Innovation

Recurring revenue from enhanced product functionality and upgrades, taken by both existing and new customers, has increased by 16% compared with the same period last year. As marketeers’ business models adapted to the pandemic and as lockdown restrictions continue to ease, we have witnessed a shift towards an increasing importance on Digital Marketing. The dotdigital platform is well-placed to deliver on marketeers’ requirements and assist in driving return on investment from their marketing campaigns. We continue to see an increase in the use of data, platform adoption and automation capabilities, as marketing strategies become more sophisticated in ensuring they have a relevant and targeted message at every touchpoint between the customer or prospect and the brand.

The Group is making encouraging progress in increasing the number of customers using our newer messaging capabilities, such as SMS and Live Chat. We continue to educate the market, for example through live sessions and digital marketing content, on how it can combine these different messaging capabilities to deliver a more cohesive message to customers, as we see interest and demand growing.

The platform continues to go from strength to strength, delivering on the needs of our customers and maintaining our competitive advantage. In May, dotdigital was independently rated as a “Strong Performer” in the 2020 Forrester Wave for Email Marketing Service Providers report, an important endorsement of our competitive edge in the space.

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