Skillcast reports positive first half of trading

Digital compliance content and technology provider Skillcast reported positive trading in a first-half update on Wednesday, saying it expected to report revenue of £5.2m for the period, making for a 16% increase compared to the same period last year.

The AIM-traded firm said the growth in revenue was primarily driven by a robust performance in recurring subscription revenues, which saw a substantial 23% increase from the prior year.

Professional services also contributed to the positive results with a stable performance, while the share of revenue from subscriptions rose to 75% of the total group revenues.

Skillcast said its annual recurring revenue (ARR) - a key measure of its financial health – had shown impressive growth.

Over the 12 months to June, ARR increased 26% to reach £8m, compared to £6.3m in June 2022.

Since the beginning of the year, Skillcast said ARR had grown 19%, reaching £6.8m in December.

The firm’s recent product launches also contributed to its positive performance, with the board noting that in March, Skillcast introduced its global risk and global compliance libraries, expanding its offering and strengthening its position in the market.

Additionally, in April it launched the ‘Compliance Bites’ library - a collection of short videos on key compliance topics aimed at improving employee knowledge retention.

The company said it had two more product releases scheduled for the second half.

With the momentum achieved so far, Skillcast Group said it was on track to return to profitability in the future.

As at 30 June, Skillcast said it maintained a healthy financial position, with no debt and £7.6m in cash in the bank.

“We are pleased with our revenue growth from subscriptions in the first half - more clients are becoming aware of the value of Skillcast's proven compliance learning and Regtech products,” said chief executive officer Vivek Dodd.

“Our historic average contract value has been around £5,500, so we were particularly pleased to win two major clients in the period with annual revenues of over £70,000 each.”

Dodd said the firm was also pleased with the launch of its new products in the first half, and was “excited” for the further launches it had scheduled for the latter part of the year.

“We are cognisant of the challenging macro environment but remain confident about achieving our full-year growth expectations for 2023.”

Skillcast Group said it would announce its full interim results on 27 September.

At 0805 BST, shares in Skillcast Group were up 5.13% at 20.5p.

Reporting by Josh White for Sharecast.com.