TIDMPCIP
RNS Number : 2696J
PCI-PAL PLC
26 April 2022
PCI-PAL PLC
("PCI Pal", "the Company" or "the Group")
Trading Update
Continued successful execution against strategy leads to further
earnings upgrade.
Strong early progress on expanded product roadmap.
PCI-PAL PLC (AIM: PCIP), the global cloud provider of secure
payment solutions for business communications, is pleased to
announce that following continued strong performance since the half
year, the Group anticipates that results for the full year to June
2022 will be better than current market expectations.
Trading Update
The first half of the financial year was another period of
significant progress for the Group, and this momentum has continued
into the third quarter. At the end of the quarter, all key metrics
for the Group were again performing ahead of management's
expectations. The Group's key indicator of future recurring
revenues of TACV(2) increased to GBP12.5 million as at 31 March
2022, following a further GBP1.1 million ACV(1) added in Q3. ARR(3)
has now reached a key milestone of GBP10 million. As at 31 March
2022, cash had increased to GBP6.4 million (31 December 2021:
GBP5.5 million).
The Group continues to cement its position as the leader in
true-cloud solutions through strong channel relationships in its
space. During the quarter, the Company signed a number of
additional new strategic target partnerships, including:
-- a marketplace partnership with the global CCaaS(4) provider
Five9, which is using a repeatable integration created with a newly
signed and deployed enterprise sized customer in the U.S.
-- a reseller agreement with a European Gartner magic quadrant
CCaaS(4) vendor that specialises in enterprise size contact
centres, and
-- a global reseller partnership with another one of the largest call centre Business Process Outsourcers(6) in the world.
In the quarter, the Group has also renewed its existing long
standing relationships with two of the largest government contact
centres in the U.K., adding a further minimum two year term to each
relationship.
With this strong expansion of existing customer accounts,
combined with Churn rates of less than 3%, the Group has continued
to deliver excellent Net Revenue Retention(5) performance which now
stands at 118% at the end of the quarter.
As a result of continued strong financial performance across the
business, the Directors now anticipate that the results for the
year to June 2022 will exceed their previous expectations.
Expansion Plans & Product Development
Following the launch of the Canadian business in H1, in Q3 PCI
Pal successfully launched its Australian business. With a newly
appointed ANZ sales head hired from a principal competitor,
together with the Group's existing partner and customer presence in
the region, the Directors are encouraged by the start made by the
business in this new territory.
Following the global industry hiring headwinds experienced in
H1, recruitment for the Company was slower than anticipated. In Q3,
the market for talent improved and the expansion-led hiring
strategy is on track. This key planned investment in talent has
included new expertise in the Product team, with the first step of
a broadened product strategy being the recently announced
partnership with the international open banking payment provider,
TrueLayer.
As the current financial year progresses, further updates will
be made on PCI Pal's new product development roadmap. The Group is
not only strengthening its existing leading compliance and security
solutions, but also working towards introducing further
payments-focused services to customers and partners for utilisation
across all business communications environments. Light-touch,
cloud-based payment services are particularly relevant within
contact centres and this broadening of the product set is expected
to further deepen channel partner relationships and add value to
PCI Pal's end-customers, thereby further expanding the Group's
addressable market.
Update on Unfounded Patent Infringement Claims
In September 2021, the Group announced that Semafone, one of its
main competitors, had filed lawsuits in both the U.K. and the U.S.
relating to alleged patent infringement by PCI Pal. The Directors
strongly refute the claims being made.
During Q3, the following procedural progress was made: In the
U.K., the Court process continued and cost budgets of approximately
GBP1.3 million were agreed for both parties with the Court. This
agreed budget puts a ceiling on the maximum amount of costs that
could be awarded against the losing side, subject to the judge's
discretion, should the case go to Court. The next step is for
Semafone to provide to the Court by the end of April 2022 detailed
disclosures as to their reasons why they believe PCI Pal infringes
their patent. PCI Pal has to provide to the Court detailed reasons
as to why Semafone's patent is invalid by the same date.
In the U.S., PCI Pal filed a motion to dismiss the case based on
the argument that Semafone's U.S. patents are invalid because they
are too abstract to be patentable (an "Alice" motion). The court
conducted a hearing on the Alice motion on 18 April 2022, and PCI
Pal awaits the judge's decision within the coming months. In
parallel, planning continues for the potential next stages of the
U.S. court process should PCI Pal's Alice motion be denied. In that
instance, PCI Pal will seek a court ruling that PCI Pal does not
infringe Semafone's patents and that Semafone's patents are invalid
in view of the prior art.
The Board continues to be very confident in the Company's
position on both the defence of the claims made and on the
counterclaims made against Semafone.
U.S. Patent Covering Cloud IP
In March 2022, the Group announced the approval for grant of one
of its patent applications in the U.S. This followed the U.S.
Patent Office's reviews of prior art and competitor patents,
including those of Semafone Limited. This new U.S. patent grant
reflects the Company's position as the first in its market to
launch globally available, true-cloud services, incorporating
light-touch, cloud-to-cloud integration methodology. The patent
protects PCI Pal's core cloud innovation as to how it interacts
with phone calls to secure data and is relevant to the majority of
PCI Pal's AWS platform deployments across partners and direct
customers. PCI Pal intends to protect its IP and use this
innovation as a method to further commercialise the Company's
planned product expansion.
Commenting on the update, James Barham, Chief Executive Officer,
said:
"Since launching our cloud services five years ago, we have
delivered on our core objectives of: establishing the first
globally available, true-cloud secure payment platform for business
communications; building a market-leading partner eco-system; and
making our services available globally to partners and customers
alike. We are now reaping the returns on this investment through a
valuable recurring SaaS business model. With another strong quarter
delivered, that model has enabled the Group to further increase its
market expectations for the current financial year.
"Last year we took the decision to invest further in
international expansion, as well as in product development, in
order to create complementary solutions and services that are
relevant to our market-leading partner eco-system and
end-customers. The international expansion is on track as planned
and we are very excited with the initial momentum in our product
development activities. As well as strengthening our core
compliance and security-centric products today, we will begin to
layer in additional payment-centric services specifically designed
for the business communications market. We expect this in turn to
further grow our addressable market as these new products are
released."
(1) ACV is the contracted annual recurring licence revenue component of the contract.
(2) TACV is the total expected annual recurring revenue from all
contracted customers, whether invoiced and included in deferred
revenue or still to be deployed and/or invoiced.
(3) ARR is the annual recurring revenue generated from deployed contracts
(4) CCaaS - Contact Centre as a Service providers such as Genesys, Vonage, Talkdesk, 8x8.
(5) AWS platform net retention rate "NRR" is calculated using
the opening total value of deployed contracts at the start of the
period less the ACV of lost deployed contracts in the period plus
the ACV of upsold contracts signed in the period all divided by the
opening total value of deployed contracts at the start of the
period
(6) Business Process Outsourcers are organisations with large
contact centre operations handling calls for third party
businesses. These companies typically have tens or hundreds of
thousands of contact centre agents globally.
For further information, please contact:
PCI-PAL PLC Via Walbrook PR
James Barham - Chief Executive
Officer
William Good - Chief Financial
Officer
finnCap (Nominated Adviser and
Broker) +44 (0) 20 7227 0500
Marc Milmo/Simon Hicks (Corporate
Finance)
Richard Chambers (Corporate Broking)
Walbrook PR +44 (0) 20 7933 8780
Tom Cooper/Nick Rome +44 (0) 797 122 1972
P CIPAL@walbrookpr.com
About PCI Pal:
PCI Pal is a leading provider of Software-as-a-Service ("SaaS")
solutions that empower companies to take payments from their
customers securely, adhere to strict industry governance, and
remove their business from the significant risks posed by
non-compliance and data loss. Our products secure payments and data
in any business communications environment including voice, chat,
social, email, and contact centre. We are integrated to, and resold
by, some of the worlds' leading business communications vendors, as
well as major payment service providers.
The entirety of our product-base is available from our global
cloud platform hosted in Amazon Web Services ("AWS"), with regional
instances across EMEA, North America, and ANZ.
For more information visit www.pcipal.com or follow the team on
Linkedin: https://www.linkedin.com/company/pci-pal/
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
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END
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April 26, 2022 02:00 ET (06:00 GMT)
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