PROACTIS Holdings PLC Deliver Strong Interim results for the six months ended 31 January 2019

PROACTIS Holdings PLC (LON: PHD), a global Spend Management and B2B commerce solution provider, today announced its interim results for the six-month period ended 31 January 2019.

Tim Sykes, PROACTIS Holdings PLC Chief Executive Officer, commented:

“This set of results is the culmination of a number of the previously reported issues facing the US, French and German parts of the Group, however much work has been undertaken and we are pleased to share the outcome of our review of operations with shareholders today.

“We are focused on executing on our plan and are confident that we have made significant steps in our journey to return the whole of the Group to its attractive core characteristics. We have a proven proposition to address a large and growing market, and we are confident that this will drive growth going forward after a period of stabilisation.”

Trading performance

* Total Contract Value signed was £6.1m (31 January 2018: £5.6m)

* New business deal activity solid: 34 new name deals (31 January 2018: 34)

* Strong upsell activity with existing customers: 54 deals in the period (31 January 2018: 49)

Financial performance

* Reported revenue increased 5% to £27.7m (31 January 2018: £26.4m)

* Reported revenue (excluding the benefit of acquisitions) was £24.9m (31 January 2018: £26.4m)

* Adjusted EBITDA1 decreased to £8.0m (31 January 2018: £8.4m)

* Adjusted EBITDA1 (excluding the benefit of acquisitions) was £7.2m (31 January 2018: £8.4m)

* Adjusted EPS1 decreased to 3.5p (31 January 2018: 5.4p)

Net debt

* Net bank debt2 increased to £39.3m (31 July 2018: £29.8m) due largely to the acquisition of Esize Holdings BV (“Esize”)

* Net cash flow from operating activities was £4.4m (31 January 2018: £1.6m)

* A comprehensive programme is in place to reduce debt levels which includes the suspension of dividends for the foreseeable future

Revenue visibility

* Annualised recurring revenue3 (“ARR”) increased to £47.6m (31 July 2018: £45.1m)

* Order book4 was £44.6m (31 July 2018: £44.6m)

M&A

* Acquisition of Esize completed on 6 August 2018, a complementary provider of spend management solutions to buyers based in the Netherlands

* Post-acquisition performance of Esize has been encouraging and is in line with management’s expectations with reported revenues for the post acquisition period of £2.6m and Adjusted EBITDA of £0.8m

Post period end

* Operational review completed with strategic plan in place

* Appointment of new CFO announced today

1 – Adjusted EBITDA is stated before non-core net expenditure, amortisation of customer related intangible assets and share based payment charges and Adjusted EPS is stated after the equivalent post tax effects of Adjusted EBITDA

2 – Excludes unsecured convertible loan notes of £5.5m maturing during August 2022

3 – Annualised Recurring Revenue is the Group’s estimate of the annualised value of revenue of customers currently contracted with the Group

4 – Order Book is the Group’s current contracted revenue that is required to be recognised in future accounting periods

A video overview of the outcome of the review of the Group’s US, French and German operations from Chief Executive Officer Tim Sykes is available to watch here: http://bit.ly/phdh12019

The company also announced the appointment of Richard Hughes as Chief Financial Officer and to the Board of Directors, with an effective start date of 20 May 2019.

Richard has significant experience in financial control, accounting, reporting, compliance and governance across EMEA, CALA and APAC gained through his roles at ARRIS International plc and formerly with Pace plc where he has worked since joining the Pace Group in 2011 (Pace was subsequently acquired by ARRIS in 2016). In his role as Finance Director, International of ARRIS International plc, he led the international finance function integrations of both Pace plc and the ARRIS Enterprise Networks Business Unit following their respective acquisitions. Prior to joining Pace plc Richard held senior positions at PwC for 7 years and worked for them in both Australia and the UK.

Tim Sykes, Chief Executive Officer, commented:

“We are delighted to have Richard join the Proactis Board. He has substantial experience working within and helping to grow publicly-listed companies operating internationally. We are confident that his appointment will bring immediate value to our Board and the Company as a whole and we look forward to working alongside Richard to re-focus the Group and drive growth in what continues to be an attractive market.”

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