Tax Systems plc (LON:TAX), a leading supplier of corporation tax software and services, is pleased to announce its unaudited interim results for the six months ended 30 June 2018.
Financial Highlights
· Year-on-year order intake growth of 22%, demonstrating successful delivery of growth strategy through investment in sales, marketing and pre-sales.
o Year-on-year total revenue growth of 14% to £8.0m (H1 2017: £7.0m)
o Year-on-year organic revenue growth of 9%
o 89% of revenue is recurring from software licences,11% from professional services
· Gross margin of 92% (H1 2017: 91%)
· Year-on-year organic and comparable Adjusted EBITDA1 growth of 9% to £3.7m (H1 2017: £3.4m)
o Representing an Adjusted EBITDA1 margin of 46% (H1 2017: 49%)
· Net debt2 reduced ahead of target, to £17.5m at 30 June 2018 (15% reduction from £20.5m as at 31 December 2017)
· Conversion of Adjusted EBITDA1 to operating cash flow before exceptional items of 91% (H1 2017: 98%)
Operational Highlights
· 11% increase in new annuity licence orders
· Annual recurring revenue (ARR) contract retention remains high at 95% (H1 2017: 95%)
· Year-on-year average professional services day rate growth of 20%
· Became Cyber Essentials3 compliant as part of commitment to achieving highest status of operational standards
1 Adjusted EBITDA is defined as operating profit or loss before exceptional items, depreciation, amortisation and share-based payments charge. Organic Adjusted EBITDA represents the Group’s Adjusted EBITDA normalised for the timing effect of the acquisition of Osmo Data Technology Limited (“OSMO”)
2 Net debt is defined as bank borrowings and loan notes recognised as liabilities and the equity element of the loan notes recognised in equity less cash
3 Cyber Essentials is a Government-backed, industry-supported scheme to help organisations protect themselves against common online threats
Gavin Lyons, CEO, commented: “It has been a strong first half for Tax Systems, and we are pleased to have delivered once again against our key strategic objectives, delivering 22% growth in order intake and reducing debt levels ahead of target. The operational progress made over the last two years has been pleasing with enhancements made across the breadth of the business. The focus now will be on maintaining these solid foundations while driving the business forward, both organically and through acquisition as we seek to expand our offering. With legislation driving market demand there is considerable scope to develop new solutions for further growth, especially for Making Tax Digital, and we remain confident in our outlook for the full financial year.”
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
Gresham House Strategic PLC (LON:GHS) has a 2.1% ownership of Tax Systems plc.
