Netcall Plc – Half-year Report December 2020

NETCALL PLC

(“Netcall”, the “Company”, or the “Group”)

Interim results for the six months ended 31 December 2020

Continued sales momentum and positive outlook

Netcall plc (AIM: NET), the leading provider of intelligent automation and customer engagement software, today announces its unaudited interim results for the six months ended 31 December 2020.

Financial highlights

• Revenue up 9% to £13.4m (H1-FY20: £12.3m)
• Cloud services annual contract value⁽¹⁾ ('ACV') at 31 December 2020 up 25% to £8.4m (H1-FY20: £6.7m)
• Total ACV at 31 December 2020 up 7% to £17.7m (H1-FY20: £16.6m
• Adjusted EBITDA⁽²⁾ up 39% to £2.95m (H1-FY20: £2.12m)
• Profit before tax increased to £0.96m (H1-FY20: £0.14m)
• Adjusted basic earnings per share up 88% to 0.90p (H1-FY20: 0.48p)
• Cash generated from operations up 52% to £2.39m (H1-FY20: £1.57m)
• Group cash at 31 December 2020 was £12.9m more than offsetting borrowings of £6.8m

Operational highlights

• Continued strong trading
• Significant cloud services growth from both Intelligent Automation and Customer Engagement offerings with an increasing number of customers using both solutions
• Strong revenue growth achieved in key market segments of financial services, healthcare and government, contributing to more than 85% of total revenues
• Annual revenue run-rate from Intelligent Automation now exceeds £10m, representing more than 40% of Group revenue and generating a positive contribution
• Recurring revenue from cloud and support contracts is 65% of revenue (H1-FY20: 64%)
• Released several new enhancements to the Liberty platform, including the addition of a Robotic Process Automation (RPA) solution

Outlook

• Strong current trading and healthy sales pipeline
• Whilst mindful of the ongoing impact of the pandemic, the Board now believes that adjusted EBITDA for the full year will be ahead of its previous expectations

Henrik Bang, Chief Executive, said:

“Netcall enjoyed a strong first half year performance delivering solid revenue and profit growth despite the ongoing impact of Covid-19 and traded comfortably in line with management expectations. We continued to experience robust demand from our main market segments of financial services, healthcare and government driven by cloud subscription contracts for both Intelligent Automation and Customer Engagement solutions.

“As we continue to strengthen our product portfolio, such as the recent addition of Robotic Process Automation, we see an increasing number of customers combining the use of both our Intelligent Automation and Customer Engagement solutions, which supports our growth aspirations.  

“ Whilst the Board are mindful of the ongoing impact of the pandemic, the combination of strong current trading, improved forward revenue visibility and a healthy sales pipeline, means the Board now believes that adjusted EBITDA for the full year will be ahead of its previous expectations .

The acceleration of organisations' digital transformation initiatives represents a significant and rapidly growing market opportunity for Netcall. Therefore, l ooking further ahead, the Board remains confident that the strength of the Group's product offering, combined with its solid balance sheet and high levels of recurring revenue, position Netcall well for continued success. “  

⁽¹⁾ ACV, as at a given date, is the total of the value of each cloud and support contract divided by the total number of years of the contract.

⁽²⁾ Profit before interest, tax, depreciation and amortisation adjusted to exclude the effects of acquisition, impairment, contingent consideration, share-based payments and non-recurring transaction costs.