Trading Update and Significant Contract Wins
12 October 2020
The Panoply Holdings PLC
("The Panoply", or the "Group")
Pre-close trading update and significant contract wins
The Panoply Holdings PLC, the technology-enabled services group focused on digital transformation, provides an update on its trading for the six months ended 30 September 2020 ("H1 2021").
Highlights:
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A robust performance from the Group, with revenues expected for the period ended 30 September 2020 of not less than £ 20.5m (H1 2020: £13.4m), up 18% on a like-for-like(1) basis (H1 2020 like-for-like: £17.4m) |
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Adjusted EBITDA(2) expected for the period ended 30 September 2020 of not less than £2.4m (H1 2020: £0.9m), up not less than 25% on a like-for-like(1) basis. |
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Strong balance sheet with £ 6.0m(3) cash as at 30 September 2020 and net debt of £1.0m after acquisition consideration of £3.8m paid out in the period |
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Two acquisitions completed, adding to the Group's depth of capabilities in hyperscale cloud projects, and expanding the Group's reach in the Healthcare sector |
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£25m in total contract wins in H1 2021, which are included in the existing new business pipeline and underpin FY 2021 guidance |
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Sales backlog(4) of £17.5m to 31 March 2021 (2020: £12.8m) with £5.0m of contracts signed post period end |
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Intention to initiate a dividend for FY 202 1 with an interim dividend to be declared following publication of the interim results |
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Confident of delivering 10-15% like-for-like organic revenue growth for the full year with profit growth in excess of revenue growth in line with previously stated commercial vision |
(1) Like-for-like is a non-GAAP/IFRS measure that presents the first half of the prior year being restated to show the unaudited numbers of the existing and acquired businesses consolidated for the same months as in 2021.
(2) Adjusted EBITDA is a non-IFRS measure that the Company uses to measure its performance and is defined as earnings before interest, taxation, depreciation and amortisation and after add back of exceptional items related to acquisitions made by the Group, fair value adjustments, share based payment charges and pre IFRS 16 adjustments.
(3) Actual cash at £5.0m after deducting £1.0m of deferred tax (VAT and National Insurance) that is being paid down.
(4) The value of contracted revenue that has yet to be recognised.
Overview
Having announced a record performance for Q1 FY21, and with continued momentum into Q2 with the ongoing benefits of structural change within public sector procurement, the Group expects to report a strong period of trading in the six months ended 30 September 2020 with £ 25.0m worth of contract wins secured in the first half. This has resulted from an acceleration in the move towards digital transformation across both public and private sectors under COVID-19 conditions, coupled with the Group's enhanced offering achieved through its collaborative approach across all Group companies.
As a result, for the six months ended 30 September 2020, the Board expects to report revenue of no less than £ 20.5m and adjusted EBITDA of not less than £2.4m.
During the period, the Group completed the acquisitions of digital transformation consultancies Arthurly and Difrent in June and September 2020 respectively. Arthurly enhances the Group's depth of capabilities in hyperscale cloud projects, particularly on the Microsoft stack, while Difrent joins The Panoply with a focus on health and social care, expanding the Group's reach in these sectors. Both acquisitions significantly augment the Group's offerings and technical capabilities, and the Board is pleased with the smooth integration of these businesses into the Group.
Financial position
As at 30 September 2020, the Group had £ 6.0m of cash and a net debt position of £1.0m. The Group's cash generation is expected to remain strong as trading profits from the end of the first half and into the second half are realised.
Outlook
Looking ahead to the second half of the fiscal year, the Group remains confident in its ability to continue its growth against its stated strategy and anticipates an element of second half weighting. This, alongside the Group's strong cash generation, gives the Board confidence to announce its intention to declare a dividend for FY 2021, starting with an interim dividend, in line with previous guidance.
There is undoubtedly a continued uncertainty among organisations in sectors within which the Group operates with respect to pandemic-related disruption, and the Board recognises the possibility of increased UK government restrictions in the later months of calendar 2020. However, at present the Group continues to see demand for digital transformation among public and private sector organisations. Consequently, the board has confidence in the full year outcome and looks forward to reporting strong organic revenue growth during the second half of the year.
Significant contract wins
The Group also announces it has secured a significant contract with Planning Inspectorate. The contract was awarded to the Group in response to Planning Inspectorate requiring support to deliver their planning appeals service into Beta and is worth a total value of £4 million over 24 months.
The Planning Inspectorate contract was won through a combined proposal by Difrent and Foundry4 and further confirms the Group's strategy of combining wider expertise and knowledge.
Foundry4's Intelligent Automation practice has recently launched a managed service proposition, in addition to their growing professional service offering. This new offer has put them in a strong position to address a growing market. This offer has recently won them four significant contracts with Kettering General Hospital, University of Law, Linc Cymru and UCL worth a value of £825,000 over the next three years. This win will strengthen the Groups recurring revenue base. These wins validate the strength of the new managed service proposition.
The Group's ability to secure these contracts validates the strength of its differentiated offering to the public sector and demonstrates the increasing scale and value of the projects it is now delivering. All of the above contracts are included with the Group's existing business plan and underpin the Board's current forecast expectations.
Neal Gandhi, CEO of The Panoply commented:
" We are pleased to report a continued momentum for the Group, following on from our record performance delivered in H1 2021. The two acquisitions we made during the period have significantly enhanced our public sector offering and we are delighted to be already witnessing the benefits of these through significant contract wins and collaborative work across the Group.
"In a period which has seen significant disruption to working practices, our clients have recognised the benefits we bring as an agile, alternative digital transformation provider that can bring swift and effective change."
Enquiries:
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The Panoply Holdings PLC |
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Neal Gandhi (CEO) |
Via Alma PR |
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Oliver Rigby (CFO) |
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Stifel Nicolaus Europe Limited (Nomad and Joint Broker) |
+44 (0)207 710 7600 |
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Fred Walsh |
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Alex Price |
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Dowgate Capital Limited (Joint Broker) |
+44 (0)203 903 7715 |
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James Serjeant |
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David Poutney |
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Alma PR (Financial PR) |
panoply@almapr.co.uk |
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Susie Hudson |
+44 (0)203 405 0209 |
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Josh Royston |
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Harriet Jackson |
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About The Panoply
The Panoply is a digitally native technology services company, built to service clients' digital transformation needs. Founded in 2016, with the aim of identifying and acquiring best-of-breed specialist information technology, design and innovation consulting businesses across Europe, the Group collaborates with its clients to deliver the technology outcomes they're looking for at the pace that they expect and demand.
More information is available at www.thepanoply.com
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