Dotdigital Group plc

("Dotdigital" or the "Group")

FY22 Trading Update

Growth across all key global regions and strong profitability

Dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of an omnichannel marketing automation and customer engagement platform, is pleased to provide the following trading update for the year ended 30 June 2022 (FY22), ahead of the publication of its full year results in November. The trading performance in this statement is based on unaudited management accounts.

Highlights

Notes

1.Market Consensus for revenue for the year ended 30 June 2022 is £62.6m

2. ARPC means Average Revenue Per Customer (including new customers added in period and existing customers)

3. EBITDA is earnings before interest, tax, depreciation and amortisation and adjusted for acquisition costs and share-based payments

4. Operating profit is adjusted for acquisition costs and share-based payments

Overview

The Board is pleased to report a strong commercial performance and growth across all key global regions in the year to 30 June 2022 having addressed the challenges of the first half.

A particular highlight of the last six months has been the progress we have made in building out our team in North America, with management now in place to lead the execution of our growth strategy in the region. We have also been successful in recruiting new talent beyond the senior team. Competition for labour remains high, however, we are seeing improvements in conditions across our territories, with several of our competitors now focused on controlling their substantial overheads.

In the period, we continued to see an acceleration in the shift towards digital marketing across industries as consumers become more and more demanding of relevant and personalised experiences and businesses become more aware of the potential for capturing additional value from new and existing customers through using tools like Dotdigital's Engagement Cloud.

Customers are increasingly adopting an omnichannel approach, with email remaining strong in terms of growth and importance to our customers in their overall marketing strategies. Email volumes grew 22% in the period, as budgets increase, and industries start to normalise post pandemic.  

Both the B2B and B2C markets are increasingly moving towards data, platform adoption and automation, which are areas Dotdigital has invested heavily in, and where it excels. With a massive ongoing shift in consumer behaviour towards digital channels and cost effectiveness and measurability becoming more and more desirable to marketeers, digital marketing budgets as a proportion of overall marketing budgets are only likely to continue to grow, creating a favourable backdrop for Dotdigital.

We are pleased that John Conoley has joined as Non-Executive Chair bringing a wealth of experience in growing international companies to the Dotdigital Board. We are making good progress in identifying a new Chief Financial Officer and will update the market on this appointment in due course.

Outlook

With the challenges of the first half of the year addressed, particularly in the US, and on the back of a strong end to the period, we enter the new financial year with confidence. We continue to invest in the business, in line with budget, with a focus on internal talent development, building our partner network and ensuring we have the right infrastructure in place to drive international growth opportunities.

The uncertain external environment will need to be monitored carefully, but market trends continue to develop in our favour and our product is built to meet and surpass the needs of modern marketeers. With a diverse customer base, healthy customer retention levels, strong pipeline, and talented teams in place across our territories to deliver against our strategy, we are optimistic about achieving continued strong sales and profitability growth in FY23 and beyond.

Milan Patel, CEO of Dotdigital, commented:

"The Group has delivered a strong trading period, with growth at the top end of expectations and profitability ahead of expectations.

"The market opportunity remains buoyant, underpinned by the structural move to digital marketing. According to the 28th Edition of The CMO Survey published in February 2022, digital marketing spend, which currently accounts for 57.1% of marketing budgets, is expected to grow by 16.2% over the next year. Our best-in-class Engagement Cloud is ideally positioned to support a growing and diversified customer base, the value of which is demonstrated through our consistently high retention rates and increasing functionality revenues.

"We remain cognisant of broader macro-economic uncertainty but enter the new financial year in a position of strength across our markets. Supported by high levels of recurring revenue and strong profitability, we remain focused on executing against each pillar of our growth strategy: Product Innovation, Geographic Expansion, and Strategic Partnerships. We look forward to the future with confidence."

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