Pelatro PLC Contract Win and Trading Update (5910E)
09 Noviembre 2020 - 01:00AM
UK Regulatory
TIDMPTRO
RNS Number : 5910E
Pelatro PLC
09 November 2020
9 November 2020
Pelatro Plc
("Pelatro" or the "Group")
Contract Win and Trading Update
Contract Win
Pelatro Plc (AIM: PTRO), the telecom Customer Engagement Hub
software specialist, is pleased to announce a new contract and to
provide a trading update. Our mViva platform has been chosen by an
Asian telco, which is part of a large global group that is an
existing customer of Pelatro, for campaign management operations.
The contract is recurring in nature and includes a variety of
services as well as the product itself. Over the term of the
contract lasting three years, revenue is expected to be between $1m
and $1.8m, depending on the customer's take up of additional
services which are currently under discussion.
Annual Recurring Revenue
As stated previously, Pelatro has been focused on transitioning
its revenue model from license-based, one-time, revenue to
recurring revenue contracts. This has been an ongoing process since
January 2019, but momentum has been gathering and this transition
is expected to be substantially completed by the end of 2020. The
success of the strategy to transition to Annual Recurring Revenue
("ARR") over the past two years can be seen as follows:
Date Jan 18 Jan 19 Jan 20 Jun 20 Oct 20
ARR run rate in
US$m 0.0 1.5 4.0 4.7 5.2
------- ------- ------- ------- -------
ARR run rate is expected to continue to grow and record a
material increase by the end of 2020. The shift of revenue model
has a short-term impact in the form of lower upfront revenue from
licenses being replaced by more regular recurring revenue contracts
recognised over several years. This short-term reduction in upfront
revenue will yield a significant improvement in the quality and
transparency of the Group's revenue, as well as typically a greater
overall economic return in future years.
Trading Update and Covid-19
The Company continues to negotiate further contracts and is
pleased to report that it expects any contract wins before the end
of this year to be for recurring revenue. Whilst the Company will,
therefore, benefit from the smoother and higher quality earnings
from this contract profile, it is unlikely that any further
contracts won this year will result in significant additional
revenue being recognised in 2020.
As previously announced, the coronavirus pandemic has had
relatively limited impact on high-level decision making at our
customers, other than them necessarily needing to focus more on
their day-to-day operations. However, over the past two months,
regrettably Covid-19 has affected some of the employees and
immediate relatives of both Pelatro and our customers. This has led
to slower than scheduled implementation of projects (principally
change requests). As this revenue is recognised only on completion
of the relevant project, as a result, certain revenue which was
otherwise visible in 2020 will be deferred to the first half of
2021.
The impact of the change in revenue model and Covid-19 has been
quantified in the table given below.
Particulars 2019 2020*
Pro forma revenue on old revenue $11.7m** $7.6m**
model
--------- ---------------
Revenue on new ARR model ex Covid-19
impact $6.7m $5.0m
--------- ---------------
Revenue on new model with Covid-19 $6.7m $4.0m to $4.2m
impact
--------- ---------------
*Based on contracts won to date in 2020.
**Estimate of revenue which would have been recognised if
contracts signed had been on a license basis.
Outlook
Pelatro is excited with the progress achieved with respect to
ARR and the appetite we are seeing from our customers to work with
us in this way. As stated on several occasions, we expect the Group
to be on very strong footing in the future owing to the quality,
transparency and visibility of its revenue model. It has been a key
objective of ours to reach a stage where, at the start of a
financial year, the recurring revenue to be recognised in that year
is at least equal to the cash costs expected for that year. With
the progress in ARR, we expect to reach that stage in the very near
future. Additionally, and in line with the strategy stated at the
time of our Placing this year, the Group has commenced investing in
marketing activities and has also signed up with a new sales person
on a contract basis. We expect these activities to bear fruit
towards the end of 2021 or early 2022.
For further information contact:
Pelatro Plc
Subash Menon, Managing Director c/o Cenkos
Nic Hellyer, Finance Director
Cenkos Securities plc (Nominated Adviser
and Broker) +44 (0)20 7397 8900
Stephen Keys / Cameron MacRitchie (corporate
finance)
Michael Johnson (sales)
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 and B2B applications, and is well positioned in the Customer
Engagement space. Our technology orchestrates the digital journey
of the customers of the telcos through contextual, relevant and
real time offers and loyalty programs across multiple channels
including websites, social media, apps and others.
For more information about Pelatro, visit www.pelatro.com
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