16 October 2023

TPXimpact Holdings PLC

("TPX", "TPXimpact", or the "Company")

First Half Trading Update & Disposal of TPXimpact Norway

Strong first half trading in line with expectations; full year targets reiterated

TPXimpact Holdings PLC (AIM: TPX), the technology-enabled services company focused on people-powered digital transformation, is pleased to provide an update on its first half trading for the period ended 30 September 2023 ("H124") and announce the disposal of TPXimpact Norway AS.

First Half Trading

The Group's strong trading performance in H124 has been encouraging and in line with management expectations. The Board expects to report first-half revenues of £41-42 million which would equate to like-for-like¹ revenue growth of around 20% for H124. Like-for-like¹ Adjusted EBITDA margins are expected to increase to 4-5% in H124 from less than 3% in H123.

New business wins in H124 amounted to £105 million and the pipeline for new business remains robust. Net debt (excluding lease liabilities) was c. £13 million at 30 September 2023 (compared with £17.9 million at 30 June 2023) and the Company has comfortably satisfied its H124 banking covenants.

The Board expects to release the Group's interim results for H124 in early December 2023 and will provide more detail in due course.

Outlook

The Board reaffirms its FY24 targets of 15-20% like-for-like¹ revenue growth and Adjusted EBITDA margins of 5-6%. These targets would equate to FY24 revenue in the range of £80-85 million and Adjusted EBITDA in the range of £4-5 million. Management are targeting net debt (excluding lease liabilities) to be in the range of £11-12 million at 31 March 2024 and, therefore, a net debt to Adjusted EBITDA ratio of <2.5x by the end of the financial year, or shortly thereafter.

The outlook for FY25 is also maintained with like-for-like revenue growth of 10-15% and further margin improvement of 2-3% on top of that achieved in FY24.

¹Like-for-like performance excludes the Questers business (sold on 15 September 2023) and TPXimpact Norway (sold on 13 October 2023) from H124 results and FY24 targets and comparative figures.

Disposal of TPXimpact Norway AS

The Board has assessed the prospects of the TPXimpact Norway business and concluded it is unlikely to contribute to the Group's targets for revenue growth and margin improvement, in part due to a lack of scale that introduces elevated risk in the event key clients or staff are lost. The Group has therefore disposed of its equity interests in TPXimpact Norway AS to companies controlled by the following managing partners of TPXimpact Norway AS: Anders Rygh (ARygh Holding AS), Geir Ødegård (Produco Invest 1 AS ) and Lars Christian Torhaug (T5 Invest AS) for a nominal consideration of £1.00. This disposal is considered a related party transaction and the directors consider, having consulted with its nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

The disposal further reinforces the Board's strategy to simplify the business and focus the Company on its core strengths of Digital Transformation and Digital Experience in the UK, whilst de-risking the Group's future performance.

TPXimpact Norway has 12 employees who provide strategic consulting services to local clients in Norway. For the year ended 31 March 2023, TPXimpact Norway generated £2.0m of revenue, £0.2m of Adjusted EBITDA and £0.2m of profit after tax. Gross assets as at 31 March 2023 were £2.7m (including £1.9m of goodwill and intangible assets).

Björn Conway, Chief Executive Officer at TPXimpact, said:

"I am pleased by the progress we have made in the first half of the financial year in executing our strategy and three-year plan. Trading has improved and we are beginning to achieve efficiencies across the Group and capitalise on the sizeable market opportunity available to the Group.

The disposal of TPXimpact Norway, as well as the recent sale of Questers for £7.5 million, is firmly aligned with our strategic vision for TPXimpact by enabling us to concentrate our resources and energies around those prospects within the UK public sector and broader digital transformation market where there is considerable scope for further growth."

- Ends -

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. The person responsible for this announcement is Steve Winters, Group CFO.

About TPXimpact

TPXimpact exists to transform the organisations, services and systems that underpin society and that drive business success. It applies strategic and creative thinking, technology, innovative design and user-centred approaches to bring about numerous improvements which together multiply the impact of change.

The Company works closely with its clients in agile, multidisciplinary teams that span organisational design, technology, and digital experiences. It shares a deep understanding of people and behaviours and a philosophy of putting people and communities at the heart of every transformation.

The business is being increasingly recognised as a leading alternative digital transformation provider to the UK public services sector, with 72% of its client base representing the public sector and 28% representing the commercial sector in the year ended 31 March 2023.

More information is available at www.tpximpact.com.