Pelatro reports 'business as usual' despite pandemic

The AIM-traded firm which was holding its annual general meeting, said most of its staff was working from home, with a “small number” present in its India offices where lockdown restrictions had been partially lifted.

Chairman Richard Day said that despite the additional scrutiny of any investment decision due to the pandemic, its customers were still investing in the company’s products.

“Demand for Pelatro's solutions has not flagged and, as a result of various new contracts, including change requests and new ‘modules’, our revenue visibility for 2020 has increased to $5m (£3.98m), and annualised recurring revenue to $4.7m,” he told shareholders.

“Telcos the world over are struggling to leverage software tools to increase revenue and reduce churn.

“Pelatro's advanced processes and expertise enables us to evolve campaign strategies, design the campaigns, execute them and effectively measure the returns.”

Day said the firm had focused on winning recurring revenue contracts from early 2019, including both managed services and revenue gain share contracts, with six such contracts won to date.

He explained that Pelatro has an end-to-end product suite covering campaign management, loyalty management, data monetisation and unified communication solutions.

“Having set up these cornerstone products, the group has been developing several add-on modules to further enhance the offering.

“Each module adds a specific feature, or use case, to the base product and can also be sold independently of each other.

“The group has launched seven such modules this year, helping to maintain Pelatro's competitive advantage and strengthen relationships with telco customers.”

Looking at its growth trajectory, Day said the recurring revenue contracts won in the past 18 months, including the “significant” 300 million subscriber contract announced in December, demonstrated that Pelatro’s strategy was working.

He said that, to help leverage off those credentials, the company was intending to increase our investment in sales and marketing, both in the existing emerging market geographies of Asia Pacific, Africa and Latin America, as well as new geographies in Europe, the Middle East and Central Asia, with a focus on winning new managed services contracts.

“Our aim, therefore, is to increase our current annualised recurring revenue of $4.7m to low double digits in the next two to three years, to more than cover the group's operational cash cost base.”

Looking ahead, Day said the board remained optimistic about the prospects for the telecommunications industry.

“At the same time, Pelatro is increasingly cash generative, with clearer visibility on future income streams and our new product modules provide a strong foundation for our continued growth.

“All our existing customers can benefit from these modules at some point in time, helping to ensure a continuous stream of revenue for Pelatro.”

Further, he said those modules enabled the firm to build more value for its customers, deepening its partnerships.

“Given the increase in revenue visibility we are confident of delivering a performance in line with expectations for 2020.”

At 1050 BST, shares in Pelatro were up 12.78% at 50.75p.