12 November 2024

TPXimpact Holdings PLC

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

Major Contract Win

First Half Trading Update & Notice of Results

Awarded digital transformation contract with MHCLG worth up to £19 million over 3 years

First half trading in line with market expectations; full year targets reaffirmed

TPXimpact Holdings PLC (AIM: TPX), the technology-enabled services company focused on people-powered digital transformation, is pleased to announce a major contract award from the Ministry for Housing, Communities and Local Government ("MHCLG") and provides an update on its trading performance for the first half of the financial year ending 30 September 2024 ("H125").

Major Contract Award

The award from MHCLG of up to £19 million over three years provides TPXimpact with a pivotal role in supporting the delivery of MHCLG's ambitious digital reform programme to modernise the planning systems utilised across England. A future state of data-driven, standards-based systems will be more efficient and robust, whilst making it easier for citizens and communities to engage in planning and development. This initiative is well-aligned with the Government's mission to promote sustainable economic growth and the cost-effective delivery of new housing to meet urgent national demand.

First Half Trading Update

Trading performance in H125 was in line with the update issued on 10 September 2024. The Board expects to report first-half revenues of almost £38 million, down approximately 9% on H124. Adjusted EBITDA margins are expected to increase to c. 6% (H124: 4.8%).

New business wins accelerated to £26 million in Q2 from £9 million in Q1. This positive momentum has continued into Q3 with new business of £24 million already won in the quarter, including the £19 million award from MHCLG.

Net debt (excluding lease liabilities) was less than £8 million at 30 September 2024 (H124: £12.8 million), giving rise to a leverage ratio (net debt to rolling 12 month Adjusted EBITDA) of around 1.6x, a significant improvement from a year ago.

Outlook

The Company is well-positioned to support the Government's five missions for a better Britain and its focus on sustained growth over the course of the Parliament. As the MHCLG win amply illustrates, there is plenty of opportunity for TPXimpact to play a major part in the Government's digital transformation initiatives as and when they materialise. There is improved visibility in relation to Central Government spending plans following the conclusion of the Departmental Spending Reviews and the Chancellor's Budget announced on 30 October. We expect this to feed through to new initiatives in the next financial year, with an increase in activity in the second half of the current year.

Our confidence in the Company's long-term growth prospects therefore remains strong and the Board reaffirms its FY25 target of flat revenue growth, with an adjusted EBITDA target of £7-8 million in line with consensus estimates. The Board also remains positive about the outlook for FY26, with like-for-like revenue growth targeted at 10-15% and an Adjusted EBITDA margin target of 10-12% compared to 5.5% in FY24.

Björn Conway, Chief Executive Officer at TPXimpact, said:

"I am pleased with our progress in the first half of FY25, despite a challenging market environment. The Chancellor's Budget announced on 30 October provided improved visibility in relation to Central Government spending plans for the next financial year, which should result in an uplift in activity in the second half of this financial year. The Company has continued to improve profitability in the first half of the year, despite top-line challenges. The increased momentum in new business wins, combined with the impact of the business improvement and cost saving actions conducted in August and September, provides a solid foundation for the second half of the year.

"I am especially pleased to announce the Ministry for Housing, Communities and Local Government (MHCLG) win which exemplifies the strength and depth of our expertise in digital transformation capabilities and, in particular, planning reform. This award of up to £19 million builds on the success of our existing two-year partnership with MHCLG where we have demonstrated our ability to deliver tangible outcomes that align with the government's evolving policy agenda.

"As we stand at the mid-point of our three-year strategic plan, I remain confident in our ability to execute our strategy successfully and deliver on our objectives. The opportunity for TPXimpact remains very positive and we look forward to continued progress in the coming months."

Notice of Results and Presentations

TPXimpact will announce its interim results for the six months ended 30 September 2024 on Thursday 28 November 2024.

Björn Conway, CEO, and Steve Winters, CFO, will be hosting live online webinars on the day of results for analysts and retail investors at 9.30am and 11:30am, respectively.

If you would like to register for the analyst webinar, please contact tpx@almastrategic.com.

Retail investors who are interested in attending the presentation can register with  Investor Meet Company for free at:  https://www.investormeetcompany.com/tpximpact-holdings-plc/register-investor

Investors who already follow TPXimpact on the Investor Meet Company platform will automatically be invited.

Attendees will have the opportunity to ask questions to management as part of the event, with feedback collected following the meeting. If there isn't time to address your question live, please send it to tpx@almastrategic.com, and we will respond to you directly.

A recording of the Investor Meet Company webinar will be posted shortly after the event on the Group's website.  

- 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.

Enquiries:

 About TPXimpact

We believe in a world enriched by people-powered digital transformation. Working in collaboration with organisations, we're on a mission to accelerate positive change and build a future where people, places and the planet are supported to thrive.

Led by passionate people, TPXimpact works closely with its clients in agile, multidisciplinary teams; challenging assumptions, testing new approaches and building confidence and capabilities. Combining our rich heritage with expertise in human-centred design, data, experience and technology, we work to create sustainable solutions with the flexibility to learn, evolve and change.

The business is being increasingly recognised as a leading alternative digital transformation provider to the UK public services sector, with over 90% of its client base representing public services.

More information is available at www.tpximpact.com.