Tag: PHD

Proactis Holdings PLC, (LON:PHD), the business spend management solution provider, has announced that it has signed a 5-year contract with a transportation company in Germany to provide its business spend management solution. This contract win represents the third new customer in Germany to sign up under the Group’s new go-to market strategy.

The customer has selected Proactis to digitise its procurement processes and offers further potential for new business through invoice automation and workforce management.

As announced previously, the Group adopted a new go-to market strategy for each of its US, France and Germany territories designed to replicate that of the UK and the Netherlands. This contract builds upon the contracts already signed across those territories.

Tim Sykes, Chief Executive Officer at Proactis Holdings, commented:

“We are delighted to have been selected once again in Germany, following successes in North America last month and in both Germany and France late last year. 

We have demonstrated that our go to market strategy, our positioning and our solutions are relevant for our target market segment in each of the territories that we operate in and we can now see the momentum and volume of business increasing as pipeline starts to turn into contracts more regularly.

Whilst conscious that the pandemic continues to impact the pace of our progression, we grow more confident that the market opportunity for Proactis in each of the US, France and Germany is as great as it is in the UK and the Netherlands and that we will continue to see further acceleration of deal flow over the coming months.”

Proactis Holdings PLC (LON:PHD), the global spend management solution provider, has today provided an update on trading for the six-month period ended 31 January 2021.

Trading Update

The Group’s progression over the period has been strategically significant with encouraging commercial traction and growing pipelines in each of its operations in France, Germany and the US under the new go-to-market strategy. In addition, the Group signed its first bePayd contracts under both the buyer-funded and the Proactis-funded models.

The Board believes that delivering these milestones validates the Group’s strategy and provides confidence of sustainable momentum and progression in the second half of the year and beyond. 

New business deal intake for the period was strong with total contract value of £6.7m delivered, despite the persistence of previously announced COVID-19 related headwinds (H1 2020: £7.5m; H2 2020: £7.1m).  The Board expects to progress TCV in the second half of the year as the Group accelerates pipeline conversion in the US, France and Germany and as COVID-19 deferred contracts from the first half come through.

Customer churn for the six-month period of £1.5m (31 January 2020: £2.1m) was in line with the Board’s expectations and included £0.3m from Heightened Risk Accounts (“HRAs”) as defined in previous announcements.  Accordingly, the Board expects to be able to report further modest progression in the Group’s underlying ARR, building on that reported for the year ended 31 July 2020.

The Board expects to report revenues for the six-month period of £23.7m (H1 2020: £24.5m) and Adjusted EBITDA* of £6.2m (H1 2020: £5.6m), against a comparative period unaffected by COVID-19.  Operating margins have improved following the restructuring of the Group’s management team and operating cost base.

Net bank debt as at 31 January 2021 was £39.7m (31 July 2020: £37.1m).  The position has been impacted by lower cash levels in the Group’s outsourced sourcing business resulting from lower trading volumes impacted by COVID-19 as previously reported, and cash flow from upfront costs of the restructuring of its management team and operating cost base.

Outlook

The Group expects to be able to report performance in line with Board’s expectations for the period.  Whilst the Board is conscious of the ongoing impact that COVID-19 is having across the business, its confidence in the Group’s prospects for the mid-term has been strengthened further through the strategic milestones that have been achieved during the period.  The Board looks forward to continued progression.

Notice of Results

The Group currently intends to release its interim results for the six-month period ending 31 January 2021 on 29 April 2021.

Tim Sykes, Proactis Holdings CEO, commented:

“I am encouraged by the progress the Group has made during the period as our strategy becomes embedded within our teams across the Group.  We have met every milestone that we needed to in order to validate our strategy for mid-market business spend management solutions and for bePayd and we can now push forward with confidence to pursue the market opportunity we have.”

* Adjusted EBITDA is calculated by adjusting profit before taxation to exclude the impact of net finance costs, depreciation, amortisation, share based payment charges and non-core net expenditure.

Financial expectations noted above are unaudited.

The company went on to announce that it has signed a contract with Denbighshire County Council (“DCC”) to provide its early payment service, bePayd, into DCC’s supply chain.

bePayd will enable DCC’s suppliers to receive an automated notification of approved invoices with the option of accelerating payment before the pre-agreed contractual terms.  Proactis will fund the accelerated payment in exchange for a small discount paid by the supplier.

It is anticipated that bePayd will be offered, within the first year, to approximately 3,000 suppliers that generate over 50,000 invoices per annum with a spend value exceeding £100m.

Councillor Julian Thompson-Hill, Denbighshire County Council’s Lead Member for Finance, Performance and Strategic Assets, commented:

“The Council recognises the importance of its valuable supply chain, especially in these difficult times.  Proactis has recognised the needs of our suppliers and we are keen to be able to offer bePayd to them.”

Tim Sykes, Chief Executive Officer, commented:

“DCC is a long-standing and valued customer of Proactis and we are delighted that it has agreed to offer bePayd to its suppliers.  bePayd is a natural extension to the portfolio of Proactis’ existing solutions adopted by DCC and we expect that it can drive liquidity into the supply chain.  We will now work closely with DCC to design and implement bePayd’s roll-out and look forward to updating the market in line with progress.”

Proactis Holdings PLC (LON:PHD), the business spend management solution provider, has announced that it has signed its first contract for the provision of bePayd, its accelerated payment service, with Experbuy, a French company offering a business process outsourcing solution that enables companies to manage their tail spend purchases more effectively.

Experbuy is a subsidiary of EPSA, a group with international operations helping organisations increase performance and profitability through three major areas of expertise: support with purchasing, organisation, performance and change management issues; cost control through the optimisation of tax, social security and occupational accidents; and the marketplace (which Experbuy forms part of).

This contract enables Experbuy to deploy bePayd for use by its own suppliers which aggregate to approximately €180m of annual spend across 65,000 suppliers. 

bePayd allows suppliers to accelerate the payment of an approved invoice in return for a small discount and is primarily aimed at the long tail of small suppliers in the supply chain, a population that is currently underserved. bePayd is market-leading in its simplicity, speed and convenience without any detriment to security or risk and is entirely flexible down to single invoice level with extremely low values because of the end-to-end automation of the process. Funding of the early settlement can be provided by the customer (as is the case with Experbuy), Proactis (through a dedicated facility with HSBC) or a blended model.

Tim Sykes, Proactis Holdings CEO, commented:

“I am delighted to have signed our first bePayd contract with Experbuy, part of the EPSA Group. We look forward to working with Experbuy to drive take-up of this great service to suppliers over the coming months and beyond. As we look forwards, the solution has never seemed more relevant, and with a healthy pipeline of opportunities, we are optimistic about its prospects in 2021.”

Proactis Holdings PLC (LON:PHD), the business spend management solution provider, has announced the appointment of Nick Brown to the Board as Independent Non-Executive Director, with immediate effect.

Nick has over 27 years’ experience in senior positions within software and technology companies with a strong track record of delivering successful turnaround and growth outcomes internationally.

Nick is currently Group Managing Director of GB Group plc, an AIM listed software company with international operations that delivers location, identity and fraud software and solutions in high growth markets. Nick was recruited to design and deliver a turnaround plan for GB Group plc and is part of the executive team which took the business from a market capitalisation of circa £5 million to £1.5 billion, successfully growing the business into Europe, USA, Asia and Australasia, while continually maintaining leading levels of employee and customer satisfaction across the Group.

Prior to his current role, where he has worked for 13 years, Nick was General Manager, Partner Programmes and Head of Mid-Market Sales at Sage UK. Nick has also held senior sales and marketing positions at large technology businesses Microsoft Business Solutions and Fujitsu Services.

Following his appointment, Nick will become Chair of the Remuneration Committee and a member of the Audit Committee. The appointment is in line with the Board’s previously stated intention to transition to a board where at least half its members, excluding the Chairman, are independent non-executive directors.

Alan Aubrey, Non-Executive Chairman commented:

“The Board is very pleased to welcome Nick to Proactis Holdings. He brings with him significant industry and public company experience and I have no doubt his skillset will be a valuable addition to the Board as the Company enters the next stage of its growth.”

Proactis Holdings PLC, (LON:PHD), the business spend management solution provider, has announced that it has signed a 3-year contract with a major German DIY retailer to provide its business spend management solution.

As announced previously, the Group adopted a new go-to market strategy for each of its US, France and Germany territories which is designed to replicate that of the UK and Netherlands.  This contract win represents a strategically important milestone, being the second new customer in Germany to sign up under that new strategy.

The solution will be deployed in Germany initially before being rolled out into new territories through Central and Eastern Europe.

Tim Sykes, Chief Executive Officer at Proactis Holdings, commented: 

“The fact Proactis has been selected by a major German multi-national retail business demonstrates the quality of our offering. The win is further validation of our new go-to-market strategy in Germany and highlights the relevance of our solution for that market. We are excited to establish a long-term partnership with this customer and look forward to supporting its deployment of our software throughout Europe.”

Proactis Holdings PLC (LON:PHD), the business spend management solution provider, has announced its audited results for the financial year ended 31 July 2020.

Financial highlights:

·	Record year in new business total contract value (“TCV”) signed up 29% to £14.6m (2019: £11.3m)
·	Annualised recurring revenue (“ARR”), excluding heightened risk accounts (“HRAs”), increased by 1.3% to £39.8m (31 July 2019: £39.3m)
·	Excluding the impact of the COVID-19 global pandemic (“COVID-19”) on volume-related contracts, underlying ARR grew by 8.0%
·	ARR including HRAs was £41.2m (2019: £44.3m)
·	Reported revenues of £49.6m (2019: £54.1m) reflective of prior year new business / churn performance
·	Adjusted EBITDA of £11.8m (2019: £15.1m), in line with market expectations
·	Adjusted EPS 2.9p (2019: 6.6p)
·	Impairment of £14.8m taken against French and German Cash Generating Units (“CGUs”) as a result of changes in the Group’s reporting structure and in the US CGU as a result of the impact of COVID-19 in volume related businesses.
·	Reported loss before tax £19.3m (2019: £25.8m)
·	Net bank debt of £37.1m (31 January 2020: £35.6m)
·	Reset banking facilities with HSBC in order to support the Group’s current business plan for the mid-term

Post period end highlights:

·	Strategic new business wins in DE and FR
·	Early adopters identified for bePayd platform

Tim Sykes, Proactis Holdings CEO commented:

“Despite the challenging macro-economic environment, we have executed our strategy well as we drive the Group toward a return to growth in FY21 and beyond.  Our strategy is to replicate the go-to-market strategy of the UK and Netherlands in each of the US, France and Germany and we have made substantial headway with first sales of our mid-market single platform solution in Germany and France.

Although we are encouraged by the progress that we have made, we are also mindful of the impact of COVID-19 which is slowing the rate of commercial progress – whilst our pipeline is strong, demand continues to be marginally subdued through this period and sales processes are more challenging because of competing priorities. Despite these challenging market conditions, we are prudently managing our costs such that the Board continues to expect to meet our earnings forecast for FY21.

Notwithstanding this, the Group’s new business performance is encouraging and combined with our return to organic growth in underlying ARR are material indicators of our progress.  Our business has proved to be robust through this extraordinary period and our pipeline and forward revenue visibility positions us well for the future. We’re in an exciting growth market and are poised to accelerate our growth, earnings and cash flow over the coming years.”

Proactis Holdings PLC, (LON:PHD), the business spend management solution provider, has announced that it has signed a 7-year contract with Union Sanitaire et Sociale Aude Pyrénées (“USSAP”) to provide its business spend management solution.

As announced previously, the Group adopted a new go-to market strategy for each of its US, France and Germany territories designed to replicate that of the UK and Netherlands. This contract win represents a strategically important milestone, being the first new customer in France to sign up under that new strategy.

The solution will cover the contract to order process and will initially be deployed with 100 users with an expectation to increase the number substantially during 2021.

USSAP is a not-for-profit organisation in the medical and health sector located in the South-West region of France consisting of 60 self-managed locations and approximately 1,700 employees.

Ms. Valliere, Chief Financial Officer at USSAP, commented:

“After a year and a half researching the market, USSAP selected Proactis because of its experience with major players in the healthcare sector such as UniHA and AP-HP.  We particularly appreciated the ergonomy and intuitive use of the Proactis solution and, as a non-profit association, we also seek value. The ability to implement the Proactis solution quickly and without additional integration and training costs was crucial.”

Tim Sykes, Chief Executive Officer at Proactis Holdings, commented:

“This contract win is a crucial proof point in Proactis’ strategy to sell its single business spend management solution internationally. We are delighted to have been selected by USSAP in France following our success at DWIYDAG in Germany.”

Proactis Holdings plc (LON:PHD), the business spend management solution provider, has provided the following update on trading for the financial year ended 31 July 2020.

Trading Update

The Group’s performance was in line with board and market expectations for the year despite the emergence of the COVID-19 global pandemic during the period, demonstrating the resilience of the Group’s business model.

New business deal intake for the year was at a record high as the Group secured a 29% increase in total contract value (“TCV”) of £14.6m (2019: £11.3m). The Board maintains its expectation of increased levels of TCV over the coming years, with a growing pipeline and momentum building following the roll-out of the Group’s new go-to-market strategy.

The Board expects to report revenues of £49.2m for the year and adjusted EBITDA of £11.8m.

Net bank debt as at 31 July 2020 was £37.1m (31 July 2019: £36.5m) with the year-end position impacted by the timing of settlement in certain accounts receivable balances as well as lower transaction volumes due to COVID-19 in the Group’s outsourced services business. If volumes had been at the same level as prior period reporting dates, net debt would have been approximately £36.0m.

This encouraging performance has been achieved despite the impact of COVID-19 which has caused slower pipeline conversion of the Group’s new supplier-paid solution, bePayd, with prospects temporarily shifting priorities. The Board remains encouraged by the levels of interest in this solution and anticipates progress in the near term.

Overall, the outlook for the new financial year remains encouraging, although the Board remains cautious given the macro-economic backdrop and associated risk across new business trends, project implementation deferrals, volume-based contracts and customer solvency. The Board looks forward to the next 12 months and is confident of delivering significant value with the business now well positioned and with a pipeline that is building.

Tim Sykes, Proactis Holdings CEO commented:

“We delivered an encouraging new business performance in the period against a challenging macro-economic backdrop, demonstrating the effectiveness of our strategy, the resilience of our business model and the ability of our teams to deliver despite a change in working practices.

“Moving forwards, we expect to make further progress in growing the rate of new business intake and we will continue to focus on retention and margin improvement to drive cash flow, whilst maintaining a measured level of investment to support our long-term growth ambitions.

“There can be no certainty about the impact that the pandemic will have on our markets. Demand has been marginally subdued through this period and sales processes have been more challenging because of competing priorities but the Group is well-positioned to continue to capitalise on the opportunities available to it. Accordingly, we expect to continue to make further progress and we remain confident in our ability to accelerate growth whilst further improving profitability and cash flow.”

Financial expectations noted above are unaudited and are subject to the completion of year-end financial close and audit processes.

Proactis Holdings plc (LON:PHD), the business spend management solution provider, has today announced that the Group has signed new contracts  with a total contract value of £11.3m cumulatively in the year to date, which equals the equivalent performance for the whole of the prior financial year.

This improved new business performance has been driven by the Group’s refreshed go-to-market strategy and, in tandem with improved retention performance, annual recurring revenue from the Group’s buyer subscription business has returned to organic growth for the year to date.

Proactis Holdings continues to carefully monitor the developments with respect to the COVID-19 outbreak and is not immune from its impact, particularly with regard to its supplier-paid business and its implementation services. However, at this stage, the Group’s business model as a whole is proving resilient.

PROACTIS Holdings plc (LON:PHD), the business spend management solution provider, today announced its interim results for the six-month period ended 31 January 2020.

Key highlights:

·      Reported revenue was £24.5m (31 January 2019: £27.7m) due to high customer churn in prior years

·      Total Contract Value (“TCV”), excluding renewals, signed was £7.5m (H1 FY2019: £6.1m; H2 FY2019: £5.2m), an increase of 44% against H2 FY2019

·      Solid new business deal activity: 29 new name deals (31 January 2019: 34)

·      Strong upsell activity with existing customers: 70 deals in the period (31 January 2019: 54)

·      Annualised recurring revenue³ (“ARR”), excluding heightened risk accounts (“HRAs”), increased to £40.7m (31 July 2019: £39.3m), representing 3.6% organic growth in the core business

·      ARR including HRAs was £43.4m (31 July 2019: £44.3m)

·      Retention in the core business remain normalised and, in the HRAs, was better than expected

·      Adjusted EBITDA¹ decreased to £5.6m (31 January 2019: £8.0m) due to high customer churn in prior years, as mentioned above

·      Net bank debt² decreased to £35.6m (31 July 2019: £36.5m)

·      Net cash flow from operating activities was £5.1m (31 January 2019: £4.4m)

Formal Sales Process (“FSP”):

·      FSP concluded on 4 March 2020 with no acceptable or firm offers being presented to the Board

Post period end highlights:

·      TCV, excluding renewals, signed to date of £10.8m compared with £11.3m for the whole prior financial year

·      Organic growth in buyer ARR has been maintained with a further net £0.4m added to the date of this announcement

·      Retention rates have improved further across the core business and also within the HRAs, including approximately £2.1m ARR from the renewal of contracts with three of the Group’s largest customers

·      Reset banking facilities with HSBC in order to support the Group’s current business plan for the mid-term

·      bePayd deployed live to support Proactis’ UK supplier base with positive supplier response and the pipeline is building

Response to COVID-19:

·      All staff have transitioned to working from home with minimal disruption from the COVID-19 crisis

·      Recurring revenue, long-term contract business model is proving resilient to the short-term market uncertainty during the early stages of the COVID-19 crisis

·      Contingency plans in place

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

2 – Excludes right of use assets recognised under IFRS 16 Leases and unsecured convertible loan notes of £6.5m maturing during July 2022, August 2023 and November 2024.  IFRS 16 Leases was adopted from 1 August 2019

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

Tim Sykes, Proactis Holdings Chief Executive Officer, commented:

“The Group has returned to organic growth of ARR in its core business during the period and to date as a result of improved new business performance and customer retention which, along with a strong pipeline build across all of the geographies that we operate, are clear indicators that the Board’s strategy is working well.

“In addition, the technical progress on our new product, bePayd, has been substantial and it is now ready for market and commercialisation.

“The Group has dealt with the immediate effect of the COVID-19 crisis extremely well and the recurring revenue, long-term contract business model is proving resilient at this stage. Our team is performing well, remaining highly connected and there has been no disruption to customer service. We remain vigilant to any indicators of risk, particularly around staff welfare, deferred pipeline build, reduced volume in transactional-priced contracts and potential delays to implementation projects which may have a more significant impact on the business if the crisis persists.

“”I am encouraged to have fundamentally reset our facilities with HSBC UK, which has demonstrated its ongoing support for the Group.  This is an essential foundation to our financial strategy and the facilities are now in line with the Group’s business plan for the mid-term.

The Group has made substantial progress during the first period of execution of its new strategy and this has continued to improve further after the period end.  Whilst mindful of the wider economic outlook, the Group’s return to organic growth in its ARR coupled with its forward revenue visibility, profitability and solid financial position provides me and the Board with confidence that the Group can now move forward confidently to execute its strategy and realise its potential. Accordingly, at this stage, the Board maintains its guidance for the full year outturn.”

Proactis Holdings plc (LON:PHD), the business spend management solution provider has today announced that it has agreed a fundamental reset of its banking facilities with HSBC UK, its long standing debt provider, reflecting the Company’s much improved financial position and growth strategy and the continued support of HSBC UK.

As previously described, the Group has made encouraging progress in line with its strategy during the six-month period ended 31 January 2020 which will be presented in detail within the Group’s interim results announcement scheduled for 29 April 2020. 

The Board considers that the recent progress made has created a solid commercial and operational platform for the Group to realise its market potential. Further progress will be underpinned by the amended Facility which represents a fundamental foundation of the Group’s business plan for the mid-term. Key amendments to the Facility are as follows:

–  A rescheduling of the amortisation profile of the Facility thereby providing an additional £3m capital in the short-term to support the Group’s growth strategy;

–  Revised covenants with material headroom to the current business plan; and

–  A conditional option to extend the expiry of the current agreement from 31 July 2022 to 31 July 2023.

Tim Sykes, CEO of Proactis Holdings, commented:

“We appreciate the continued support of our long-term partner, HSBC UK, and look forward to strengthening our relationship further. The reset of the basis of our facilities with HSBC UK is a fundamental foundation for the Group’s mid-term business plan and it gives us great confidence that this business is fully funded to deliver our current growth plan for the foreseeable future.”

Adam Kelly, Deputy Regional Director of HSBC UK, commented:

“The Group has demonstrated some encouraging progress in line with its strategy over recent months and we are pleased to be able to continue our support to the business in these circumstances.”

Proactis Holdings PLC (LON:PHD), the business spend management solution provider, today issued a trading and financial update specifically noting the impact of COVID-19 on the Group.

The Group’s business is based primarily on a recurring revenue, long term, SaaS based contract business model which offers robustness and security in periods of short-term uncertainty and a high degree of visibility.

The Board wishes to emphasise that its priority has always been the health, safety and well-being of our people and our customers.  The Board is pleased to report that all staff are working highly effectively from home after minimal disruption and are supporting our customers with no compromise on service levels.

The Group has been carefully monitoring the developments with respect to the COVID-19 outbreak and the impact, both actual and expected, on its business activities.  Whilst the full impact on the general economy is not yet known, the Group has continued to trade well through the early stages of the COVID-19 crisis.  Specifically:

–  Total contract value (“TCV”), excluding the value of renewals, has increased from £7.5m (6 months to 31 January 2020) to £10.4m (8 months to 31 March 2020) against a comparator of £11.3m for the year ended 31 July 2019;

–  Organic growth in annual recurring revenues (“ARR”) of buyer subscriptions in the period since 31 January 2020 has been maintained; and

–  Revenues, profitability, cash flow and net debt remain in line with management’s expectations and have not been materially affected by the COVID-19 crisis.

Outlook

The Group has responded well to a period of significant disruption and uncertainty.  Whilst mindful of potential delays to new customer contracts and the implementation of existing projects in the short-term during the early stages of the COVID-19 crisis, the Board remains confident of the opportunity to accelerate new business substantially in the medium term.  Cash flow has been strong and the Group remains comfortably within its existing facilities.

Accordingly, at this stage, the Board maintains its guidance for the full year outcome and its confidence for the continued progression of the Group.

Notice of Results

Proactis Holdings intends to release its interim results for the six-month period ended 31 January 2020 on 29 April 2020.  

Proactis Holdings PLC (LON:PHD), the global spend management solution provider, announces the conclusion of the formal sale process announced on the 29th July 2019.

The FSP was commenced to enable the Board, in an orderly fashion, to explore a number of approaches and expressions of interest which the Board considered had the potential to provide benefit to the Group’s stakeholders. A comprehensive process was run to assess the credibility of interested parties and their ability to deliver an offer or strategic outcome that could be recommended to shareholders. This has not led to any firm proposals being received and it is unlikely that prolonging this process will deliver a proposal that the Board would be willing to recommend to shareholders.

The Board is mindful of the potential commercial and management distraction that a protracted FSP could present to the Group and also of its encouraging prospects (as illustrated by the Group’s 44% increase in total contract value of new business sold during the 6 month period ended 31 January 2020 as described within the trading update dated 20 February 2020). This rate of new business has continued during February 2020 and the Group has now signed approximately £9.4m of total contract value, cumulatively, during the seven months ended 29 February 2020 (as a comparative, the Group signed £11.3m for the whole financial year ended 31 July 2019).

Proactis Holdings Board is confident that the right business strategy is in place and some of the benefits of this are becoming evident already. Furthermore, the Board will continue to focus on cost control and to review non-core aspects of the business with a view to reducing net debt further. The Board considers that superior shareholder value will be achieved by focussing the Group’s efforts on delivery of this strategy rather than by engaging in the FSP at this time. For this reason, the Board has concluded the FSP and the Company is no longer in an “offer period” as defined by the Code.

The Board recognises that this decision will not have achieved the desired outcome for some shareholders and the Board is committed to working with those shareholders to facilitate their objectives, where possible.

Alongside this, the Board has committed to make certain changes to its corporate governance infrastructure, including:

• To transition to a position within twelve months where, in accordance with the UK Governance Code, at least half of the Board, excluding the Chair, are independent non-executive directors;
• To amend the Company’s Articles of Association at the next General Meeting to require annual re-election for every director; and
• To review the Group’s reporting key performance indicators in order to provide greater transparency and granularity as the Group returns to growth.

Tim Sykes, Proactis Holdings CEO, commented:

“We believe we have come to the right conclusion for our shareholders as a whole, considering the clear progress that has been made in the business and the opportunities that we have ahead of us.

“The business strategy that we have established is being implemented and is delivering encouraging early indicators. As communicated within our recent trading update, we have delivered a significant improvement in new business and dramatically improved retention rates and we expect a return to revenue growth in the second half of this financial year. Our progress in the short-term has been encouraging and we are confident that the long-term prospects are significant.”

Proactis Holdings PLC (LON:PHD), the global spend management solution provider, today provides an update on trading for the six-month period ended 31 January 2020 as well as an update on the Formal Sales Process.

Trading Update

The Group’s announcement on 29 April 2019 outlined a revised strategy that included improving the rates of winning new customers and the retention of existing customers. Since then, the Group has restructured its operations and the Board is encouraged to be able to report that the Group has delivered well against this strategy during the six-month period to 31 January 2020.

Total contract value signed with new and existing customers was £7.5m for the six-month period ended 31 January 2020, a 44% increase against the six-month period ended 31 July 2019 of £5.2m. This rate of new business performance is expected to continue during February and the Group is well positioned to take this performance further in the mid-term. As a comparative, the total contract value sold for the year ended 31 July 2019 was £11.3m (31 July 2018: £12.3m). Revenues from this new business will largely be recognised in future periods because of the Group’s SaaS-based business model.

Proactis Holdings has achieved organic growth in annualised recurring revenues (“ARR”) in its core business of 3.6% for the half year with ARR progressing to £40.7m at 31 January 2020 (31 July 2019: £39.3m). Including the impact of the heightened risk accounts (as described in the Group’s Final Results on 29 October 2019 (“2019 Final Results”)), ARR at 31 January 2020 was £43.4m (31 July 2019: £44.3m).

In respect of the retention of existing customers, churn (expressed in terms ARR lost through either loss or downgrade of contracts with existing customers) was £0.8m in the Group’s core business (and £2.0m including the impact of heightened risk accounts) for the six-month period ended 31 January 2020 which is a significant improvement against the six-month period ended 31 July 2019 of £4.1m.

Further, the total ARR associated with the heightened risk accounts was £5.0m and, of that, £3.4m came up for renewal during the six-month period ended 31 January 2020. The Board is pleased to be able to report that only £1.2m of the £3.4m ARR was actually lost and the £2.2m retained is well ahead of the Board’s expectations.

The Board expects the Group to report revenues of approximately £24.5m for the six-month period ended 31 January 2020 (six-month period ended 31 July 2019: £26.4m). This reduction in reported revenue is principally a reflection of the significant net loss of ARR during the two prior financial years ended 31 July 2019 and 31 July 2018.

The Board has elected at this stage not to quantify expectations of EBITDA as it would incur a disproportionate regulatory burden as a result of the FSP but will do so at the time of its interim results.

The Group has invested in new leadership, sales, marketing and account management teams required to deliver our new go-to-market strategy designed to boost new business and customer retention for the longer-term. This investment is beginning to deliver value and the new business success in the first half adds to the Group’s recurring revenue base and will be recognised in future periods.

The Group has managed its net debt position down to £35.6m (31 July 2019: £36.5m) and it remains fully serviced and within its covenants.

Outlook

Following the significant improvement in new business performance and retention of existing customers, the Board expects that the Group will return to revenue growth for the second half of the financial year resulting in a likely full year outturn of approximately £50.5m for the year ending 31 July 2020 (as compared to the Board’s expectations prior to the announcement of the FSP of £53.5m) with a consequential impact on the Board’s expectations of adj. EBITDA for the year. The Board then anticipates the rate of revenue growth to accelerate into next financial year and future periods.

BePayd

bePayd is the Group’s supplier paid financial solution, providing accelerated payments to suppliers against invoices approved by buyers. The Group continues to make substantial progress on this exciting opportunity with the completion of the product to market readiness during the period and, during February 2020, the deployment of the product across the Group’s own supplier base. The Group has a substantial pipeline of opportunities for the early adopter programme and looks forward to being able to update the market on material commercial progress in the near future.

FSP update

The Proactis Holdings Board continues to work to advance certain approaches received since the FSP was announced on 29 July 2019. The Board reports that further inbound interest continues to be received from credible parties but, being conscious of the protracted FSP, the Board is mindful to only engage with those able to advance rapidly. Management team presentations and additional information has been provided to selected interested parties. A key element of interest for all potential buyers is a view of current trading which this Trading Update provides. The Board considers, therefore, that it will be in a position to move forward promptly following this update, but it reiterates that there can be no certainty that any offer will be forthcoming or the terms of any such offer.

Notice of Results

The Group currently intends to release its interim results for the six-month period ending 31 January 2020 on 29 April 2020, but this date is subject to change in light of any requirements arising from the FSP described above.

Tim Sykes, Proactis Holdings CEO, commented:

“I am delighted with the record level of new business that the Group has achieved and the pipeline that we have built over recent months as we execute our new strategy for growth. Our commercial teams are beginning to access our market opportunity and we are confident that we will continue to demonstrate significant progress against 2019’s performance and, in due course, accelerate this further.

“Our customer retention rates have improved significantly which is partly due to our increased level of engagement with our customers where we are offering product strategies designed to maintain and, potentially, provide even more value. This, along with our new business performance, has enabled us to deliver substantial net organic growth in ARR in our core business and that represents a return to the core values of Proactis.

“After significant progress during the period, we remain excited about the prospects for our bePayd product and we are confident and determined that we will make material commercial progress with this product during this year.

“Our revenue performance in the period is largely a function of the lower new business and much lower retention performance in previous periods which we have now reversed. I am also encouraged that we were able to reduce net debt and we remain highly focussed on and in control of this key aspect of our strategy.

“We are confident that the revenue performance has now bottomed out and we have much to be optimistic about as we re-emerge to growth in our core offer after a very difficult period in the Group’s history.”

Proactis Holdings PLC (LON: PHD), the global spend management solution provider, announces that it has today posted to shareholders its Annual Report and Accounts for the year ended 31 July 2019.

This includes a notice of the Company’s Annual General Meeting, to be held at 10.00am on Wednesday 29th January 2020 at the offices of finnCap, 60 New Broad Street, London, EC2M 1JJ. The AGM Notice also includes details of a proposed capital reduction.

Update on Formal Sales Process

As Proactis Holdings stated at the time of the Final Results for the Year Ended 31st July 2019 announced on 31st October 2019, the Board has thoroughly reviewed and assessed the credibility of a number of expressions of interest (“EOIs”) following the Company’s announcement of the FSP on 29th July 2019. Certain EOIs have led to more advanced discussions including the provision of detailed financial information with regard to the business in a dataroom. The Board has also completed a number of management team presentations and are now evaluating a number of proposals with a view to potentially proceeding to a final stage of due diligence. The process remains ongoing. The Board reiterates that there can be no certainty that any offer will be forthcoming or the terms of any such offer.

Proactis Holdings (LON:PHD), the global spend management company, can confirm that it has today published a video overview of its Final Results announcement.

The interview with CEO Tim Sykes can be watched on the Proactis website https://www.proactis.com/uk/investors/.

Proactis Holdings PLC (LON: PHD), the business spend management solution provider, has announced its audited results for the financial year ended 31st July 2019.

Key Financial information:

Total contract value signed was £11.3m (2018: £12.1m), adding to future years’ revenue pipeline
· Reported revenues increased by 4% to £54.1m (2018: £52.2m)

· Annualised recurring revenue (“ARR”) maintained at £44.3m (2018: £44.5m)

· Adjusted EBITDA of £15.1m (2018: £17.3m), in line with expectations

· Impairment of £27.0m taken against US CGU as a result of the challenges in that market identified and announced during the Operational Review

· Adjusted EPS 6.6p (2018: 10.6p)

· Loss before tax £25.8m (2018: profit before tax £3.8m)

· Net bank debt reduced to £36.5m (31 January 2019: £39.3m)

· Net cash flow from operating activities £11.9m (2018: £8.4m)

Operational highlights:

• Completed Operational Review in the period and implemented new strategic plan
• Good level of new deals signed, with 60 new names added (2018: 64)
  Increased up-selling to existing customers with 127 deals secured (2018:113)
• First sale completed by German commercial team during September 2019, demonstrating early success of recent restructuring and new strategic plan
• Committed overdraft facility of £20m signed to support the delivery of the Group’s supplier paid accelerated payments solution, bePayd – which is now live.
• Strengthened Board with appointment of Independent Non-Executive Director and CFO
• Acquisition of Esize, a recognised territory leader in the Netherlands, has performed very well

Formal Sales Process (“FSP”)

· The Board has thoroughly reviewed and assessed the credibility of a number of expressions of interest (“EOIs”) following the Company’s announcement of the FSP on 29 July 2019. Certain EOIs have led to more advanced discussions including the provision of certain detailed financial information with regard to the business in a dataroom. The process remains ongoing. The Board reiterates that there can be no certainty that any offer will be forthcoming or the terms of any such offer.

Tim Sykes, Proactis Holdings CEO commented:

“The results for the period are in line with the Board’s expectations. Following the completion of the Operational review announced in April 2019, the management team has been working incredibly hard to assess and rectify the issues identified and that have impacted overall Group performance over the last two financial years. This has included managing leadership change throughout the regions affected as well as through the business as we build teams that are capable of executing the Group’s new go to market strategy. The Board is confident that this capability is now in place and the whole team can execute efficiently to deliver a substantial and high growth company. We are seeing relevant progress already with pipeline starting to build and an encouraging level of order intake in the new financial year.

“The Group has been profitable and cash generative in the period under review, and the long-term prospects are exciting. With a strong ARR giving high levels of visibility, and a proven, highly relevant end-to-end offering, we begin the new financial year in line with management’s expectations and with optimism for the Group’s potential.”