D4T4 ends first half in line with expectations

Data solutions specialist D4T4 said in a trading update on Monday that its first-half results were expected to be in line with management expectations, with revenues of about £8.1m, up from £7.5m.

The AIM-traded firm said its adjusted losses before tax, meanwhile, were set to have come in at £1.3m for the six months ended 30 September, swinging from a profit of £0.1m a year earlier.

It put that performance down to a continued second-half weighting, as well as ongoing investment into the business.

Annual recurring revenue increased during the period to £15.8m from £14m at the end of the prior financial year.

Of the increase, £0.4m arose from customer wins, with £1.4m arising from the period-end revaluation of annual recurring revenue contracts in foreign currency.

The board said that while a “significant proportion” of group revenues were dollar-denominated, a large part of reported revenues for the period derived from the reversal of deferred revenue balances held at the last year-end, and were thus converted to revenue at the historic rate, rather than the more favourable rates now prevailing.

D4T4 said it continued to invest into sales and marketing, including development of a direct sales channel, which it said was showing “clear signs” of being able to shorten sales cycles, building on its “strong” pipeline.

Its board said it now had an increasing number of sales opportunities in the final stages of the funnel, providing good revenue visibility and underpinning its confidence in again delivering full-year results in line with management expectations.

The cash balance at period-end was described as “robust” at £26.2m, which the board said reflected the unwind of year-end receivables, as it remained debt-free.

“Our business continues to be second half weighted as expected, but with good revenue visibility to meet management expectations for the full year,” said chief executive officer Bill Bruno.

“Our continued investment in sales and marketing has created a strong direct pipeline of opportunities, which are showing promising signs of shortening the sales cycle in our business that has been historically longer.

“We continue to further our investment in driving annual recurring revenue across both the CDP and FDP products and remain focussed on executing successfully during the second half of our year.”

The group said it would publish its half-year results for the six months ended 30 September on 30 November.

At 1013 BST, shares in D4T4 Solutions were down 4.38% at 240p.

Reporting by Josh White at Sharecast.com.