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RNS Number : 0467L
Panoply Holdings PLC (The)
28 April 2020
This announcement contains inside information
28 April 2020
The Panoply Holdings PLC
("The Panoply", or the "Group")
Trading and COVID-19 Update
The Panoply Holdings PLC, a digitally native technology services
group, today announces a trading update for the year ended 31 March
20 20 (FY20).
The Board expects to report R evenue and Adjusted EBITDA
performance in line with market expectations. Revenues in the
second half increased to approximately GBP18m (H1: GBP13m), driven
by new client wins along with Brexit and election related
stability. On a pro forma basis, including the acquisition of Ameo,
revenue for H2 would have been approximately GBP 21 .8m .
During the year the Group completed two acquisitions in the
public services sector: FutureGov, a leader in digital service
design; and Ameo, a consultancy specialising in delivering business
change. These acquisitions, alongside developments made across the
Group's existing business, have significantly strengthened The
Panoply's public sector offering, which now represents
approximately 70% of the Group's revenues on a pro forma basis
(FY19: 56%). With the Group able to collaborate effectively across
its constituent companies, The Panoply represents a compelling
end-to-end offering for organisations in this sector looking to
embrace digital transformation at pace.
Financial position
A s at 31 March 2020 the Group's balance sheet had retained cash
reserves of approximately GBP 4. 5m and a net debt position of GBP
0. 5m. As of 24 April the Group held GBP 6.2m of c ash and cash
generation is expected to remain strong as trading profits from the
final quarter are realised. Following the year end the Group has
agreed a GBP1.5m overdraft facility with HSBC and is in early
discussions about extending the Revolving Credit Facility in order
to provide sufficient financial flexibility should it be required
for further acquisitions or otherwise.
Pleasingly, the acquisitions made by the Group to date have
traded in line with expectations and so it is anticipated that
further consideration will become payable on publication of the
full year result. This is expected to be in line with previous
guidance of approximately GBP17m. Any consideration will be
satisfied by the issue of new shares in The Panoply based on the
share price at that time and in accordance with the pre-announced
formulas subject always to a minimum floor of 74p.
COVID-19
The Group's top priority is the health and safety of its team,
clients and the communities in which it operates in and it
implemented remote working ahead of government guidance. As an
agile technology services group, The Panoply has been able to
continue operating effectively during this period and its teams are
continuing to fully service clients. At present, the Group has not
seen a net negative impact on revenue and staff utilisation remains
greater than 70%, which is in line with previous periods.
The Group is proud to be working with a number of clients on the
COVID-19 emergency response. FutureGov have been working with
Camden Council, having together designed and built an open source
directory of service tool, "Beacon", which helps the council and
local public service partners understand the needs of vulnerable
residents, matching them to the relevant support. FutureGov and
Notbinary have built both ventilator and PPE 'dashboards' in order
to help manage the effective supply of these crucial products,
whilst Notbinary has created a system with the Competition and
Markets Authority via the Department for Business, Energy &
Industrial Strategy which allows businesses to be held to account
for unfair behaviour during the crisis.
Human+ & FutureGov along with other industry partners are
proud to be working with NHSx to assist NHS efforts to support
vulnerable people during COVID-19. The Group will be supporting the
development and execution of user-centred design, Intelligent
Automation and Artificial Intelligence. This includes user
research, robotic process automation (RPA) and service design
support to help evaluate and design remote care and digital mental
health solutions, as well as data coalition and automation
opportunities, across the NHS.
The Group continues to closely monitor and manage its costs
throughout this time of increased uncertainty in order to be
prudent, with a hiring freeze in place and careful management of
any discretionary spending. The Group has also introduced a number
of additional short-term data points to the range of KPIs monitored
to provide greater visibility throughout the Group. To date the
Group has not furloughed any staff and in the UK, where there are
very small pockets of underutilised staff, they have been
encouraged to volunteer in their communities on full pay.
Outlook
There are several factors which should reassure the Group's
employees and shareholders that the business has the resilience to
be ready to capitalise on opportunities when they emerge. The
majority of revenues are generated from existing client
relationships and the Group continues to win business currently
scheduled for completion in the balance of the year.
The Group is therefore confident in its decision to continue
making investments in the business in FY2021 and that its growth
strategy over the longer term will continue to see consistent
investment in innovation and through further acquisitions to
support its growth in the following years. In line with its
entrepreneurial values, the Group will continue to invest in
business opportunities developed by its talented and innovative
employees. The Board believes pursuing these opportunities is in
the best interests of all stakeholders and the right strategy to
ensure the Group's long term, sustainable success.
In the first half of FY2021 the Group anticipates revenues to
exceed the prior period and for the business to remain profitable
and cash generative. Whilst the increase in public sector work is
expected to more than mitigate the softening in demand from clients
in other sectors, given the nature of public sector work the Group
expects margins to be somewhat lower than previously. Some of the
work is being done on an entirely pro bono basis.
It is difficult to predict how the developing situation will
impact the behaviour of clients and therefore, given the lack of
visibility on the period beyond H1, the Group is suspending future
guidance. Notwithstanding this, the Group is confident that it will
remain cash generative and EBITDA profitable for FY21 . The Board
recognises the importance of dividend income to shareholders but,
in light of the current uncertainty, is not intending to pay a
dividend for FY20 and is currently reviewing when to commence
dividend payments.
Neal Gandhi, CEO of The Panoply, commented :
"I am pleased with the progress that we made last year and
honoured to now be supporting a number of public sector businesses,
including NHSx, tackling the COVID-19 pandemic. Notwithstanding the
challenging macro-economic environment we currently face, we are
well structured to continue to provide our services to clients, and
believe that this situation will ultimately bring greater focus to
the benefits of digital transformation and accelerate demand for
our services further."
Enquiries:
The Panoply Holdings
Neal Gandhi (CEO) Via Alma PR
Oliver Rigby (CFO)
Stifel Nicolaus Europe Limited +44 (0)207 710 7600
(Nomad and Broker)
Fred Walsh
Alex Price
Alma PR panoply@almapr.co.uk
(Financial PR) +44(0)203 405 0205
Susie Hudson
Josh Royston
Harriet Jackson
The person responsible for making this announcement is Oliver
Rigby, CFO.
About The Panoply
The Panoply is a digitally native technology services company,
built to service clients' digital transformation needs. Founded in
2016, with the aim of identifying and acquiring best-of-breed
specialist information technology, design and innovation consulting
businesses across Europe, the Group collaborates with its clients
to deliver the technology outcomes they're looking for at the pace
that they expect and demand.
More information is available at www.thepanoply.com
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END
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