Trading Update

RNS Number : 9979X

Gresham Technologies PLC

11 January 2022

 

11 January 2022

Gresham Technologies plc

Trading update: continued strong growth; revenues, earnings and cash ahead of market consensus

Gresham Technologies plc (LSE: "GHT", "Gresham", "Group", "Company"), the leading software and services company that specialises in providing solutions for data integrity and control, banking integration, payments and cash management, is pleased to provide a trading update for the financial year ended 31 December 2021 ("FY21").

 The Group expects to report:

·	Forward-looking Clareti Annualised Recurring Revenue ("ARR") as at 31 December 2021 up 95% to £24.0 million, including £9.2 million acquired with Electra
·	Group revenues up 48% to £36.8 million, including a contribution of £5.4m from Electra since acquisition
·	Clareti revenues up 63% to £25.2 million, including a contribution of £5.4m from Electra since acquisition
·	Group Adjusted EBITDA* up 58% to £7.1 million and Group cash EBITDA** up to £2.4 million from £0.3 million in 2020
·	Cash and cash equivalents at 31 December 2021 of £9.1 million (FY20: £8.9 million), with no debt
·	Following a strong Q4 performance, overall revenues, earnings and cash are all ahead of market expectations

As previously reported, the Company completed the successful acquisition of Electra Information Systems Inc on 22 June 2021. The Electra business, which has been integrated into Gresham's Clareti business since acquisition, delivered a post-acquisition contribution in-line with management's expectations, integration work is well advanced and there is positive momentum across the combined sales organisation, including joint solution opportunities.

The Clareti business (including Electra) and the other (non-Clareti) businesses, have both performed strongly throughout the period with total Group revenues increasing 48% to £36.8 million (FY20: £24.8 million). Excluding the contribution from Electra, the year-on-year Group revenue growth rate was a record 27%.

Forward-looking Clareti ARR, as at 31 December 2021, was £24.0 million, a 95% increase on the previous year (FY20: £12.3 million). After excluding the ARR acquired with Electra of £9.2 million from the annual growth in ARR, management is pleased to report strong underlying organic growth on the opening ARR of 20%. This has been driven by new sales and ARR net retention levels well in excess of 100% in both Clareti and Electra, thus indicating the high quality of the Group's client base and the business value of our software and services. With its expanded offering, the Company remains well placed to continue to grow its service provision and total contract value within existing clients in 2022 as well as add further new customers.

The Group finished the year with net cash and cash equivalents of £9.1 million, well ahead of market expectations. This is due to very strong Q4 cash collection, lower cash spend on exceptional acquisition related costs during the year than originally expected, and improved operational leverage within the Clareti business flowing through to cash generation as it continues to scale.  

The Group expects that the audited results for FY21 will be announced on Tuesday, 8 March 2022.

Ian Manocha, CEO, commented:

"We are pleased to report another very strong year for Gresham, both financially and strategically. Revenues, earnings and net cash are all ahead of current market expectations as a result of an excellent performance across all lines of business, including our recent acquisitions.

The acquisition of Electra enables us to build on our strong market position and reputation and provides us with a platform for significant, scalable, growth with high quality, recurring revenues. Our data and automation solutions are used every day by major financial institutions and we are seeing good new business momentum across all of our regional sales teams. Looking ahead, with a strong pipeline, a great client base and a business model that gives us in excess of £37 million of 2022 Group revenues already under contract, we are very well placed to take advantage of the growing market opportunity."

*Earnings Before Interest, Taxation, Depreciation and Amortisation adjusted to add back share-based payment charges and exceptional items and including continuing operations only.

**Group Adjusted EBITDA less capitalised development spend and any IFRS 16 lease related cash payments.

Immediately prior to this announcement, the current market consensus for FY21 includes: Group revenue of £35.3 million; Group adjusted EBITDA of £6.6 million; and a year-end cash and cash equivalents balance (excluding IFRS 16 operating leases classified as debt) of £5.3 million.

Enquiries

Gresham Technologies plc	[phone]
Ian Manocha / Tom Mullan
Singer Capital Markets (Financial Adviser and Broker)	[phone]
Shaun Dobson / Tom Salvesen / Jen Boorer
Alma PR	[phone]
Josh Royston / Hilary Buchanan / Hannah Campbell

Inside information

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR").  Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

Note to editors

Gresham Technologies plc is a leading software and services company that specialises in providing real-time solutions for data integrity and control, banking integration, payments and cash management. Listed on the main market of the London Stock Exchange (GHT.L) and headquartered in the City of London, its customers include some of the world's largest financial institutions and corporates, all of whom are served locally from offices located in the UK, Europe, North America and Asia Pacific.

Gresham's award-winning Clareti software platform is a highly flexible and scalable platform, available on-site or in the cloud, designed to address today's most challenging financial control, risk management, data governance and regulatory compliance problems. Learn more at www.greshamtech.com.

 

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