Pelatro PLC Contract Win and Trading Update (2361V)
02 Diciembre 2019 - 01:00AM
UK Regulatory
TIDMPTRO
RNS Number : 2361V
Pelatro PLC
02 December 2019
02 December 2019
Pelatro Plc
("Pelatro" or the "Group")
Contract win and Trading update
Pelatro Pivots to Higher Quality Recurring Revenue
Pelatro Plc (AIM: PTRO), the global Multichannel Marketing Hub
software specialist, is pleased to announce a significant contract
win and an update on trading.
Contract win
The Group has been selected by one of the largest global telcos
in the world, with significant operations in Asia (the "Telco"), to
implement its Contextual Marketing Platform as well as its Unified
Communication Manager software (the "Contract"). The Contract will
be delivered on a managed service basis for an initial period of 5
years, with a significant proportion of the revenue on a fixed
basis as well as an element of gain share, such that the expected
total revenue over the 5 year period will be between $10.0m to
$12.0m. The Group will incur certain incremental costs in order to
deliver the Contract, including some additional recruitment.
The selection process has been highly competitive against some
of the leading vendors in the Company's market and winning the
Contract is clear validation of the quality of the Group's
offering. The structure of the contract will bring better quality
and higher visibility to future revenues. This will also enhance
the Company's reputation in the market and, given the Telco is part
of one of the largest telco groups in the world, the Board expects
this to bring further significant opportunities for cross-selling
of Pelatro's product across that wider group.
As indicated in the interim results announced on 26 September
2019, the management see the building of a business with strong
recurring revenue as the best route to delivering shareholder value
over the longer term, becoming less reliant on "one off" license
contracts. Much of the Group's effort and investment over the last
12 months has been with that goal in mind, and today's contract win
is clear evidence that this effort is working. The Group will
continue to focus on building recurring and repeat revenue from its
customers.
Trading update
We have been successful in winning a number of the contracts
this year, including the one announced today, which have been of a
recurring revenue and/or gain share nature, and as such generate
their revenues upon completion of implementation and performance of
the relevant service (and then spread over the term of the
contract). Accordingly, revenue recognised in the current financial
year in respect of these contracts will be minimal. The total value
of these contracts won during FY2019 is about $16.0m-$18m,
resulting in an all time high with respect to total value of
contracts won in a year. Had these same contracts been won as pure
license contracts, approximately $6.0m-$7.0m of revenue would have
been recognised in FY2019. This shift away from one-off licence
contracts to recurring and repeating revenue contracts is entirely
in line with the Group's stated strategy and in the Board's view
delivers higher quality, sustainable and visible revenues that will
significantly enhance the value of the Group over the longer
term.
The Contract win is highly significant for the long-term
prospects for the Group; however, with the Contract having taken
significant time and management resource to secure, the timing of
conversion of certain other pipeline opportunities has been
impacted. Therefore, the Group now expects to end the year to 31
December 2019 below revenue expectations, at not less than $6.5m,
with $6.3m booked to date. The overall pipeline remains strong and
while sales cycles have extended somewhat and conversion slowed,
opportunities have not been lost, rather they have been shifted
into the coming financial year. The pipeline currently stands at
$15.0m, of which some $5.0m is from existing customers and $10.0m
from new potential customers. Significantly, the Group expects to
start 2020 with a material proportion of the expected revenues for
the year underpinned by recurring and repeating revenue, including
the contracts referenced above as well as support and maintenance
income built up from previous years' license sales and regular
change request income, amounting to approximately US$4.0m. This
compares with approximately US$1.5m at the start of 2019.
With the pivot to an increasing proportion of recurring revenue,
the level of such revenue incoming years the Board expects will
keep incrementally increasing thereby building a strong foundation
for continuous growth. These recurring revenues, with a high level
of profitability, also have a steady cash flow on a monthly basis
resulting in reduced debtor days. This pivot is supported by an
increasing number of potential engagements in the pipeline falling
into this category of revenue.
Commenting on this contract win, Subash Menon, Managing Director
said: "We are delighted with this very significant contract win
which validates the quality of our software, especially in the
context of its relevance to Tier 1 telcos. It also marks a major
shift for our business in terms of moving towards a recurring
revenue model and enhancing our quality and visibility of earnings
materially. Whilst it is disappointing to fall short of
expectations for the full year, the decision to target a different
revenue model, and a different type of contract has been taken for
the long-term benefit of the Group, shareholder value and we are
encouraged by the strength of the pipeline of opportunities going
into the new financial year. The Board remains confident that
Pelatro is very well positioned to capitalise on the large long
term opportunity. We are focused on higher quality recurring
revenue and steady cashflow."
For further information contact:
Pelatro Plc
Subash Menon, Managing Director c/o finnCap
Nic Hellyer, Finance Director
finnCap Limited (Nominated Adviser and
Broker) +44 (0)20 7220 0500
Carl Holmes/Kate Bannatyne/Matthew Radley
Tim Redfern / Camille Gochez - ECM
This announcement is released by Pelatro Plc and, prior to
publication, the information contained herein was deemed to
constitute inside information under the Market Abuse Regulations
(EU) No. 596/2014. Such information is disclosed in accordance with
the Company's obligations under Article 17 of MAR. The person who
arranged for the release of this announcement on behalf of Pelatro
Plc was Nic Hellyer, Finance Director.
Notes to editors
The Pelatro Group was founded in March 2013 by Subash Menon and
Sudeesh Yezhuvath with the objective of offering specialised,
enterprise class software solutions for customer engagement
principally to telcos who face a series of challenges including
market maturity, saturation and customer churn.
Pelatro provides its "mViva" platform for use by customers in
B2C applications, and is well positioned in the Multichannel
Marketing Hub space (MMH) - this is technology that orchestrates a
customer's communications and offers to customer segments across
multiple channels to include websites, social media, apps, SMS,
USSD and others.
For more information about Pelatro, visit www.pelatro.com
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
TSTCKDDDBBDDBBK
(END) Dow Jones Newswires
December 02, 2019 02:00 ET (07:00 GMT)
Pelatro (LSE:PTRO)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Pelatro (LSE:PTRO)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024