Interim Management Report for the six months ended 30 September
2008
Strong first half financial performance in line with
the Board’s expectations, integration of strategic acquisition
proceeding to plan
Alterian plc (“Alterian” or “the Company” or
“the Group”), a leading international software company providing an
Integrated Marketing Platform, announces its interim results for
the six months ended 30 September 2008.
FIRST HALF FINANCIAL HIGHLIGHTS
Strong revenue performance in line
with the Board’s expectations :
- Revenue at £10.3m (2007: £5.3m). Up 19% from
organic growth and £4m from acquisitions. Gross margin remains high
at 87% (2007: 88%).
- Operating Loss before tax and integration
costs reduced to £1.3m (2007: £1.6m), after planned increased
investment in broadening the channels to market.
- Integration costs following acquisition of
£1.0m giving a loss before tax and after integration costs of £2.2m
(2007: £1.5m).
- In line with historical trends revenue will
be heavily weighted to the second half due to concentration of
receipts under long term contracts and renewals in the fourth
quarter.
£5.7m of cash (2007:£5.9m) after £1.8m relating to
acquisition and integration spend.
Recurring revenues from existing
contracts estimated on the basis of previous experience at £60m to
£70m over the next 5 year period (see page 6).
FIRST HALF OPERATIONAL HIGHLIGHTS
Acquisition of Mediasurface plc
successfully completed on 7 July 2008. Integration now complete and
delivered on budget. No unexpected problems and positive response
from customers.
Strong Sales Momentum &
Distribution Channel Growth
- Approximately 100 new end users (60%
database/email and 40% web content management).
- Development of Marketing Agency and Systems
Integrator channels significantly enhanced through Mediasurface
acquisition.
- New partners signed in all major territories,
including a Master Reseller in India.
Product Development
- Roll out of Alterian’s database engine with scaling to the
largest marketing databases in the US as well as reduced total cost
of ownership for smaller databases.
- First integrated offering combining Mediasurface and Alterian
products released – “Alterian Engage” integrates web content
management and email marketing.
MANAGEMENT ACTIONS IN RESPONSE TO ECONOMIC
CONDITIONS
- Cost efficiencies implemented
reducing annualised operating costs by circa £0.8m (in addition to
the annualised savings of circa £2m as a result of the integration
of Mediasurface).
- New solutions launched focusing
on Alterian’s competitive strengths in “rapid time to value” and
“low total cost of ownership” products in high payback areas of
marketing.
- Focus on ensuring high current
client satisfaction to underpin continued high contract renewal
rates and further product up-sell.
- An acceleration of new business
lead generation activity.
Commenting on trading for the period
and outlook, David Eldridge, Alterian Chief Executive Officer
said:
“We have had a very good first half. In
spite of the more challenging economic environment, Alterian
delivered strong revenue growth in line with plan and our
competitive market position continues to improve.
We successfully completed the acquisition
of Mediasurface plc and executed the integration plan on time and
on budget. The acquisition results in our becoming a stronger
Company increasingly focused on the growing on-line marketing
segment. Following the acquisition Alterian has combined the web
content management software offering from Mediasurface with
Alterian’s database marketing and analytics capability, which has
already produced a positive response from clients across the
enlarged business. This follows our successful moves into
email marketing, marketing process management and marketing
optimisation.
In line with previous guidance and
historical trends revenue in the current year will be heavily
weighted to the second half due to the concentration of receipts
under long term contracts and renewals in the fourth
quarter.
Our revenues have remained robust during a
period of increasing economic difficulties and we have a strong
pipeline. Customers are increasing financial scrutiny over
buying decisions and it is possible that there will be some changes
in the rate and timing of pipeline conversion. However,
Alterian’s products are focused on low total cost of ownership and
on delivering cost efficiency in the higher payback areas of
marketing activity which are continuing to attract spend, including
on-line marketing. We are continuing to achieve our targets for new
business, as well as for receipts under long term contracts and
renewals and have not experienced the cancellation of existing
projects. A significant proportion of Alterian’s business is
in US dollars.
On the basis of the strong first half
performance, a high recurring revenue base, a strong pipeline
and competitive position and cost efficiencies implemented, the
Board is targeting continued good progress in revenues and profits
in the second half.”
To read the rest of the statement,
including the Company's interim financial accounts, please download
the full document here: Interim
Results for the 6 months ended 30 September
2008.
To view a presentation on the results, please click
here: 2008
Alterian Interim Results.