SimplyBiz Group plc (LON:SBIZ), a leading independent provider of compliance, technology and business services to financial advisers and financial institutions in the UK, has announced its unaudited results for the six months ended 30 June 2020.
Financial highlights:
· Revenue of £28.9m (H1 2019: £29.1m)
· Operating profit of £5.0m (H1 2019: £3.2m)
· Adjusted EBITDA*1 of £7.4m (H1 2019: £8.0m)
· Adjusted EBITDA*1 margin of 25.5% (H1 2019: 27.5%)
· Adjusted EPS *2 of 4.22p (H1 2019: 5.57p)
· Free cash flow conversion*3 of 65% (H1 2019: 43%)
· 30 June 2020 net debt of £25.8m (30 June 2019: £30.1m)
· Full year guidance maintained – adjusted EPS no less than 11.0p (PY: 13.0p)
Operational highlights:
· Digital strategy accelerated
· Scale and growth in intermediary services
· Decisive cost control and efficiency improvements
· Strong performance and contribution from Defaqto
· Mortgage completions of £7.4bn
· Awarded Service Company of the Year
Operational Update
The company took strong and positive action within the first week of national lockdown to successfully ensure it could fully support its customers and colleagues. All services to intermediary customers were moved onto a proprietary digital platform and delivered without disruption. Decisive cost control and efficiency improvements were made which will deliver sustained margin benefits in the future. Fintech & Research remained resilient and robust over the period with continued product developments to support our future growth.
The Company’s mortgage valuation business and events programme were significantly impacted by the lockdown, though volumes moderately increased in June. Management expects a continued slow recovery in the housing market during the second half of the year. Mortgage completions were consistent with prior year, further demonstrating the resilience of our customer base and services.
Management quickly and successfully moved to agile working, bringing forward and enhancing developments to the digital platform, enhancing the delivery of services.
Dividend
As stated in the Operational & COVID-19 Update announcement on 27 April 2020 and Pre-Close Statement on 23 July 2020, the Board does not intend to recommend an interim dividend in respect of the current financial year. A further update on the FY20 dividend will be provided in January 2021.
Matt Timmins, Joint CEO of The SimplyBiz Group plc, commented:
“We are delighted to report strong and resilient trading for H1 2020, demonstrating the robust nature of our business. We benefitted from an improving quality of our underlying earnings, under-pinned by six full months trading from Defaqto which helped offset a significant reduction in valuation income during the period. The quality of our revenues, the resilience of our customers, and the benefits of a stronger digital delivery platform have enabled strong trading during challenging times. We have responded quickly and decisively to deliver growth in key strategic areas, whilst improving the quality of our underlying earnings.
We have accelerated our digital strategy. This data led, digital delivery, will further improve our quality of earnings, margins and cash generation going forward, whilst also improving customer service.”
“On behalf of the Board, I would like to thank all of our colleagues, customers, and wider stakeholders for their support during these unprecedented times.”
*1 Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share option charges and operating exceptional costs. Adjusted profit before and profit after tax exclude operating exceptional costs and amortisation of intangible assets arising on acquisition.
*2 Adjusted Earnings Per Share is calculated as adjusted profit after tax, which excludes operating exceptional costs and amortisation of intangible assets arising on acquisition, divided by the average number of ordinary shares in issue for the period.
*3 Free cash flow conversion is calculated as adjusted EBITDA, less working capital movements, lease payments, CAPEX, development expenditure, corporation tax paid and interest, as a percentage of Adjusted EBITDA.
