Proactis Holdings PLC, the global spend management and B2B eCommerce solution provider, announces that the Group expects to report order intake of £5.8m (2018: £5.5m) of total contract value for the 6-month period ended 31 January 2019 and revenue of approximately £27.7m (2018: £26.4m). This includes TCV of £1.0m (2018: £Nil) and revenue of £2.8m (2018: £Nil) from the Esize Group which was acquired on 6 August 2018. The Board is pleased with the early stage performance of the Esize Group. The Group expects to report approximately £8.0m (2018: £8.5m) of Adjusted EBITDA1 for the period and net debt of approximately £40.0m as at 31 January 2019.
During January and February 2019, the Group has experienced a lower level of retention and a deterioration of the pipeline in the Group’s US and European operations. Accordingly, whilst trading in the Group’s UK operations and the Esize Group are expected to remain robust, the Board now considers that it is unlikely that the Group as a whole will deliver significant growth for the remainder of the current financial year ending 31 July 2019.
Following the departure of former CEO Hamp Wall (announced 10 January 2019), new CEO Tim Sykes has initiated an in-depth review of the Group’s US and European operations in order to ensure that the Group’s resources are focussed on the considerable opportunities open to it in those territories and the Board looks forward to sharing the results of this review with shareholders and expects to provide an update within its interim results, scheduled for 29 April 2019.
Accelerated Payment Facility (‘APF’)
The Board is pleased to announce that it has secured a specific committed facility provided by HSBC UK of £20m to support the delivery Group’s APF, a solution that it is presently developing. The facility is non-fee and non-interest bearing until drawn. The APF will enable the Group to fund early payments against approved invoices for suppliers to its buyside customers. The Group estimates that the annual spend of its buyside customers is more than £250bn and the Group is working with certain buyside customers to create an early adopter programme.
Appointment of a Chief Financial Officer
Following the appointment of Tim Sykes as Chief Executive Officer on 10 January 2019, a process for the recruitment of a new Chief Financial Officer commenced. The Board has identified a preferred candidate who has agreed to join the Group, subject to contract, and the Board looks forward to being able to announce the appointment in the near future.
Appointment of an additional Independent Non-executive Director
Following the appointment of Sophie Tomkins on 30 October 2018 as Senior Independent Non-Executive Director and Chair of the Remuneration Committee, the Board reiterated its commitment to bring additional independence to the Board. A process is now underway to appoint a further independent non-executive director as Chair of the Audit Committee and the group looks forward to announcing an appointment in due course.
Note 1: Before the impact of non-core net expenditure (primarily related to the Group’s acquisition during the year and the post-acquisition integration programmes), amortisation of customer related intangible assets and share based payment charges..
Tim Sykes, Chief Executive Officer, commented:
“Whilst the outlook for the next few months is disappointing, I am confident in our ability to deliver an improved level of performance in the mid to long-term. Our core markets remain attractive and our core technologies and team are competitive. I look forward to completing my review for the Board and focussing the Group on a growth strategy that should be successful in all of its territories and returning the Group to the qualities it has demonstrated historically.
“I am delighted with the renewed rate of progress with the APF after investing in additional capacity to move it forward. There remains much work to do before revenues can be expected but the commitment from HSBC UK is strong validation of the significance of the opportunity and their support for our business.”