TIDMDOTD
RNS Number : 0526G
dotDigital Group plc
22 July 2021
22 July 2021
dotdigital Group plc
( "dotdigital" or the "Group")
FY21 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 for
the year ended 30 June 2021 (FY21), ahead of the publication of its
full year results in November. The trading performance in this
statement is based on unaudited management accounts.
Highlights
-- Revenue from operations grew by c.23% to GBP58.1m (2020: GBP47.4m)
o Recurring revenue as a percentage of total revenue remained
consistent YoY at 93%;
o ARPC(1) continued its upward trend, growing by 16% from
approximately GBP1,083 per month to GBP1,251 per month;
o Functionality recurring revenue (from license fees and
enhanced bolt-on functionality) grew 31% to GBP18.9m (2020:
GBP14.4m);
-- Adjusted EBITDA(2) and adjusted operating profit(3) from
operations are both expected to be comfortably ahead of market
expectations;
-- Strong cash balance of GBP32.0m at 30 June 2021, ahead of market expectations;
-- Intention to pay a final dividend in line with policy, with
the expected pay-out linked to EBITDA growth;
-- dotdigital has become the first customer engagement platform
to be awarded ISO27701 on privacy information management, ISO27001
information security management and ISO14001 environment management
certifications;
-- Year-end revenue run rate is above expectations, due to the
strong financial performance highlighted above, meaning the Group
has strong momentum as it starts the new financial year.
Notes
1. ARPC means Average Revenue Per Customer (including new
customers added in period and existing customers)
(2. EBITDA is earnings before interest, tax, depreciation and
amortisation and adjusted for acquisition costs and share-based
payments)
(3. Operating profit is adjusted for acquisition costs and
share-based payments)
(4. The closure of the Dynmark business is now complete)
Overview
The Board is pleased to report a strong performance in the year
to 30 June 2021, which represents a full financial year since the
onset of the pandemic and compares well against a strong
performance in the prior year. The Board anticipates 23% revenue
growth as a result of continued execution against each pillar of
the Group's growth strategy, being Product Innovation, Geographic
Expansion, and Strategic Partnerships.
In the year, while COVID-related restrictions in the territories
we operate in have ebbed and flowed, we have continued to see an
acceleration in the shift towards Digital Marketing, a trend that
has persisted as trading conditions began to normalise in the
second half. The use of data, platform adoption and automation
capabilities are rising, and we continue to enhance the dotdigital
'Engagement Cloud' to ensure it excels in these areas. For those
marketeers seeking the means to launch relevant and targeted
campaigns, ensuring brands have a relevant, personalised message at
every touchpoint with their customer or prospect, and a strong
return on investment, our product has cemented itself as the
platform of choice.
As part of its ongoing commitment to security and privacy, the
Group has achieved its goal of extending the scope of its current
information management system to now include ISO 27701 Privacy
Information Management certification, an internationally recognised
standard designed to help organisations build and maintain their
privacy program in line with international best practice. Being
certified demonstrates that a company meets the requirements and
has put in place a comprehensive system to manage data privacy and
comes shortly after the Group was re-certified against the
universal ISO 27001 and ISO 14001 standards. The Group continues to
focus on operational excellence in the areas of privacy, security
and sustainability.
Growth Strategy
Product Innovation
The Group is making good progress in increasing the number of
customers using our enhanced functionality, including an increasing
number of data connectors through our IPaaS (Infrastructure
Platform as a Service) capabilities. We continue to educate the
market through live sessions and digital marketing content, on how
to adopt new features to enhance messaging. As a result, recurring
revenue from enhanced product functionality and upgrades, taken by
both existing and new customers, increased by 31% to GBP18.9m
(2020: GBP14.4m).
The platform continues to go from strength to strength,
delivering on the needs of our customers and maintaining our
competitive advantage.
Geographic expansion
The Group saw strong revenue growth across all key global
regions, despite the wider economic impact of COVID-19, and
continued its diversification of international exposure. In EMEA,
revenues grew 23% to GBP44.6m (2020: GBP36.3m). Sales cycles
normalised during the lockdown and we have seen an uptick in
momentum both from a pipeline and sales conversion perspective.
Revenues from the Americas were up 19% to $12.5m (2020: $10.5m).
We continue to strengthen the customer facing teams in North
America and build strong relationships with partners in-region with
a focus on enhancing brand awareness.
The APAC market saw high levels of growth in the year, with
revenues growing 47% to$7.7m (2020: $5.2m). We further increased
dotdigital's presence in the region through expanding the team and
see a growing pipeline in Japan and the Far East, through our team
based in Singapore.
Strategic Partnerships
Revenues from customers using a data connector from one of our
strategic partners grew 14% to GBP25.4m in the year.
Enhanced brand awareness alongside the additional functionality
that we have developed for ecommerce merchants has allowed us to
continue growth in the Magento space. Our respective teams continue
to work together on our joint marketing strategy and enhanced
development of our integration. Signup of customers in all regions
remains strong - in the year we added a net new 66 Magento
customers to the platform, taking the total to 782, as at the end
of June 2021 (versus 716 as at end of June 2020). In the year,
revenue from Magento customers grew 11% from GBP13.0m to
GBP14.3m.
Our Shopify relationship continues to go from strength to
strength. We have seen an increasing pipeline resulting from the
integration that we have built with Shopify Flow, which allows
ecommerce merchants a seamless connection to easily deploy
campaigns from the dotdigital platform. We continue to build
relationships with system integrators in the ecosystem. We now have
132 customers using the Shopify connector versus 83 this time last
year. In the year, revenue from Shopify customers grew 79% from
GBP1.2m to GBP2.1m.
As BigCommerce's global elite partner, we continue to deepen our
strategic relationship, formulating a joint go-to market plan
through offers for ecommerce merchants, and joint marketing efforts
to the user base. We saw a 249% increase in revenue from
BigCommerce connected customers in the year to GBP0.4m (from
GBP0.1m in June 2020).
As part of our commitment to our B2B Marketing customers, we
hired a partner manager to build our strategic relationship with
Microsoft for our integration into Dynamics 365 in North America,
where we see a significant opportunity that is only just beginning
to take off. Revenues from customers using our Dynamics connector
increased 12% to GBP4.3m in the year, from GBP3.8m in the prior
period.
Outlook
The market opportunity available to us has been augmented over
the past year as organisations accelerated their move to digital
marketing capabilities in order to engage with customers in a
lockdown environment. This irreversible trend continues at pace,
and we are experiencing continued strong sales momentum as we enter
the new financial year.
The Group benefits from high levels of recurring revenue, a
healthy balance sheet, and strong cash generation, providing the
flexibility to maintain or increase strategic investment in the
business to both capture market share and drive forward our
platform.
Milan Patel, CEO of dotdigital, commented:
"The Group delivered a consistently strong period of profitable
growth, in a year characterised by wider macro-economic
instability, reflecting an intensified shift toward digital
marketing initiatives on behalf of organisations and demonstrating
the attractiveness of dotdigital's comprehensive enterprise-level
offering within the industry.
"This performance was made possible by our people, who are our
greatest asset, and I would like to thank everyone at dotdigital
for their commitment and drive in making this a business we can all
be proud of.
"Whilst we remain vigilant to the varied wider economic context,
we enter the new year with solid business foundations and are
laser-focus on our three-pillared growth strategy. With a
significant market opportunity available, a robust balance sheet
and strong trading momentum, we are confident in the Group's
ongoing success."
For further information please contact:
dotdigital Group Plc Tel: 020 3953 3072
Milan Patel, CEO InvestorRelations@dotdigital.com
Paraag Amin, CFO
Alma PR (Financial PR) Tel: 020 3405 0210
Hilary Buchanan dotdigital@almapr.co.uk
Josh Royston
David Ison
Canaccord Genuity (Nominated Advisor Tel: 020 7523 8000
and Joint Broker)
Bobbie Hilliam
Georgina McCooke
Jonathan Barr, Sales
finnCap (Joint Broker) Tel: 020 7220 0500
Stuart Andrews, Corporate Finance
Rhys Williams, Sales
N+1 Singer (Joint Broker) Tel: 020 7496 3000
Shaun Dobson, Head of Corporate
Finance
Alex Bond, Corporate Finance
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END
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