# itim Group focused on profitability and creating shareholder value

- Link: https://www.directorstalkinterviews.com/itim-group-focused-on-profitability-and-creating-shareholder-value/4121128430
- Published: 2023-09-28T07:12:57+01:00
- Author: Amilia Stone

**[itim Group plc](https://www.directorstalkinterviews.com/company/itim-group-plc/itim.l)**(
[LON:ITIM](https://www.directorstalkinterviews.com/company/itim-group-plc/itim.l))
a SaaS based technology company that enables store based retailers to optimise their
businesses to improve financial performance, has announced its unaudited interim
results for the 6 months ended 30 June 2023.

**Financial Highlights**

| ·      | Group revenue of £7.4m (Half Year 2022 (“HY22”): £6.8m, Full Year 2022(“FY22”): £14.0m)  | 
| ·      | Booked Recurring Revenue of £6.4m (HY22: £5.6m, FY22: £11.8m)  | 
| ·      | Recurring revenue percentage of Group revenue was 86% (HY22: 82%, FY22: 84%)  | 
| ·      | Annual recurring revenue (“ARR”)^(1) of £13.2m (HY22: £12.6m, FY22: £13.2m)  | 
| ·      | Annual growth in ARR^(1) 5% (HY22: £19%, FY22: 19%)  | 
| ·      | Adjusted EBITDA^(2) (£0.2)m (HY22: £0.3m, FY22: £0.2m)  | 
| ·      | Adjusted EBITDA^(2) margin (3)% (HY22: 5%, FY22: 2%)  | 
| ·      | (Loss)/profit before tax (£1.1)m (HY22: (£0.4)m, FY22: (£1.3)m)  | 
| ·      | Cash £2.7m (HY22: £5.3m, FY22: £3.9m)  | 
| ·      | Earnings per share (3.02) pence (HY22: (1.20) pence, FY22: (2.20) pence)  | 
| ·      | Adjusted Earnings per share^(3) (3.02) pence (HY22: (1.06) pence, FY22: (2.01) pence)  |

Full year numbers quoted above are audited and half year numbers quoted above are
unaudited

_1. Annual recurring revenue_

_2. EBITDA has been adjusted to exclude share-based payment charges, exceptional
items, along with depreciation, amortisation, interest and tax from the measure 
of profit~.~_

_3. The profit measure has been adjusted to exclude exceptional items and share 
option charge_

**CEO Statement**

The Group is pleased to report an increase in revenue in the period despite the 
well documented challenging market conditions for retail companies.

Revenue for the six month period was £7.4m (HY22: £6.8m) an increase of 9%, of which
recurring revenues were £6.4m (HY22: £5.6m) representing 86% of sales and underpinning
future sales. Adjusted EBITDA (EBITDA excluding share-based payment charges and 
exceptional items) fell to a loss of £0.2m (HY22: £0.3m) as a result of investment
in R&D and in building and protecting our staff base. Cash balances totalled £2.7m
at the period end (FY22: £5.3m) reflecting investment in anticipated product development.
Adjusted loss per share was 3.02p (HY22: loss 1.2p).

The wider retail market has remained challenging for most operators however there
are signs that omni channel retailers are beginning to fare better than their peers.
With this in mind, the Group relaunched its consultancy business as a complement
to its technology offering and to enable our customers to gain the maximum benefit
from it.

The Group continues to benefit from its well established client base with 80 customers
resulting in strong recurring revenues. Whilst new business remains a priority, 
the Group has significant opportunity to upsell and cross sell within its customer
base enabling organic growth.

The Directors believe that the investment in the business over the past two years
has positioned itim for future growth, created essential USPs in the market and 
broadened its offering with the potential to increase revenues from new and existing
customers.

As a result of this investment and in the Directors’ opinion:

1.     itim is one of a few companies that can deliver a single unified sales (commerce)
platform to support omni-channel retailers. Retailers no longer need to have separate
platforms for selling in stores (EPOS), or selling online (e-commerce), or selling
to B2B, or wholesale customers – itim can support all these in one platform.  This
is seen as a significant USP for omni channel retailing.

2.     itim has enhanced its merchandising, stock management and optimisation solutions,
again to support retailers selling across multiple channels.  Numerous sales channels
makes this much more complex, which itim is well positioned to be able to address.

3.     itim is a market leader in Price and Promotions optimisation helping retailers
increase cash generation, by either reducing the markdowns and discounts they give
away or improving recoveries from suppliers through its advanced invoice matching,
supplier funding tracking and a supplier payments platform.

4.     itim is a leader in improving digital supplier collaboration through a series
of portal applications built on its Electronic Data Interchange history.  This is
coming to the fore due to the rise in marketplaces.

The Board is resolutely focused on profitability and creating shareholder value 
and is taking the necessary steps to reduce investment in product, driving services
revenues and returning the business to cash generation.  Whilst this will impact
the rate of subscription revenue growth it should result in higher margins and increased
profitability. 

Finally, I would like to thank our employees and our partners for the continued 
support they give to this business and the commitment and faith they show that we
will be a successful business.

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