Proactis confident in future after combination process

The AIM-traded firm said the re-organisation had delivered net annualised cost savings of around £5.0m as at 31 July, and were anticipated at the time of the acquisition of Perfect Commerce on 4 August last year.

It said the acquisition created the fifth largest player in the market by revenue globally, and accelerated its strategy to drive scale, geographic footprint, customer opportunity, operational efficiencies and a stronger solution set into its business.

Deal intake for the year was described as “strong”, with Proactis securing 64 new names with a total initial contract value of £8.7m, and 120 upsell deals with a total contract value of £3.6m.

Its board explained that 55 of the 64 new names were subscription deals, with the remainder being perpetual licence deals.

The performance was at the board's expected levels across all territories.

Proactis re-iterated its expectation that it would report revenue of approximately £52.0m, up from £25.4m year-on-year, and adjusted EBITDA of around £17.0m, rising from £7.9m.

Adjusted profit before tax was anticipated to be £11.0m, compared to £5.1m at the end of the last financial year.

The board said that, given that revenue of £26.4m as reported in the interim results to 31 January announced on 24 April included about £1.0m which was non-continuing as a result of the loss of a small number of customers, and also that it included the benefit of stronger dollar and euro currencies, that suggested that the group's revenue for the second half was “marginally ahead” of underlying revenue for the first half.

Proactis said it would present a segmental analysis of its performance within its preliminary results which would include, but would not be limited to, revenue analysis by territory and buyer/supplier split.

The group's customer retention performance improved in the second half, the directors noted, following the exceptional losses reported at the interim, and advanced notifications of termination were now running at levels which the board said it considered to be more normal.

It said it was continuing to monitor the “key performance indicator” carefully, and was making further operational changes to support that element of the group's activities with a view to improving overall performance further.

All of those factors provided the board with confidence that the group would return to normal, stronger rates of revenue growth during the year ending 31 July 2019, it said, and the pipeline of opportunity remained “strong” for the longer term.

Net debt as at 31 July was expected to be approximately £29.3m.

“I am encouraged by the progress made and expected out turn for the year which, although reduced from what I had anticipated coming into the new group, signifies a very substantial business with excellent potential,” said chief executive officer Hamp Wall.

“Proactis has a strong position across all key territories and is well positioned in a growing marketplace.”

Wall said the company’s acquisition of Perfect Commerce had enabled it to create a platform that could deliver sustainable organic growth, and its organisational structure was now set for the group to realise the opportunities that it had set out at the start of the business combination process, and which Wall said remained substantial.

“Our new business performance is as strong as we had planned for and our retention performance is recovering after a disappointing period.

“The new name and upsell performance was strong in both volume and value and this gives me confidence that we will see a return to sustainable organic growth and strong cash generation with a significant opportunity for enhancement in North West Europe following our acquisition of Esize.”

Proactis said it intended to release its preliminary results for the financial year ending 31 July on 30 October.