itim Group plc (LON:ITIM) a SaaS based technology company that enables store based retailers to optimise their businesses to improve financial performance, has announced its unaudited interim results for the 6 months ended 30 June 2023.
Financial Highlights
| · | Group revenue of £7.4m (Half Year 2022 (“HY22”): £6.8m, Full Year 2022(“FY22”): £14.0m) |
| · | Booked Recurring Revenue of £6.4m (HY22: £5.6m, FY22: £11.8m) |
| · | Recurring revenue percentage of Group revenue was 86% (HY22: 82%, FY22: 84%) |
| · | Annual recurring revenue (“ARR”)1 of £13.2m (HY22: £12.6m, FY22: £13.2m) |
| · | Annual growth in ARR1 5% (HY22: £19%, FY22: 19%) |
| · | Adjusted EBITDA2 (£0.2)m (HY22: £0.3m, FY22: £0.2m) |
| · | Adjusted EBITDA2 margin (3)% (HY22: 5%, FY22: 2%) |
| · | (Loss)/profit before tax (£1.1)m (HY22: (£0.4)m, FY22: (£1.3)m) |
| · | Cash £2.7m (HY22: £5.3m, FY22: £3.9m) |
| · | Earnings per share (3.02) pence (HY22: (1.20) pence, FY22: (2.20) pence) |
| · | Adjusted Earnings per share3 (3.02) pence (HY22: (1.06) pence, FY22: (2.01) pence) |
Full year numbers quoted above are audited and half year numbers quoted above are unaudited
1. Annual recurring revenue
2. EBITDA has been adjusted to exclude share-based payment charges, exceptional items, along with depreciation, amortisation, interest and tax from the measure of profit.
3. The profit measure has been adjusted to exclude exceptional items and share option charge
CEO Statement
The Group is pleased to report an increase in revenue in the period despite the well documented challenging market conditions for retail companies.
Revenue for the six month period was £7.4m (HY22: £6.8m) an increase of 9%, of which recurring revenues were £6.4m (HY22: £5.6m) representing 86% of sales and underpinning future sales. Adjusted EBITDA (EBITDA excluding share-based payment charges and exceptional items) fell to a loss of £0.2m (HY22: £0.3m) as a result of investment in R&D and in building and protecting our staff base. Cash balances totalled £2.7m at the period end (FY22: £5.3m) reflecting investment in anticipated product development. Adjusted loss per share was 3.02p (HY22: loss 1.2p).
The wider retail market has remained challenging for most operators however there are signs that omni channel retailers are beginning to fare better than their peers. With this in mind, the Group relaunched its consultancy business as a complement to its technology offering and to enable our customers to gain the maximum benefit from it.
The Group continues to benefit from its well established client base with 80 customers resulting in strong recurring revenues. Whilst new business remains a priority, the Group has significant opportunity to upsell and cross sell within its customer base enabling organic growth.
The Directors believe that the investment in the business over the past two years has positioned itim for future growth, created essential USPs in the market and broadened its offering with the potential to increase revenues from new and existing customers.
As a result of this investment and in the Directors’ opinion:
1. itim is one of a few companies that can deliver a single unified sales (commerce) platform to support omni-channel retailers. Retailers no longer need to have separate platforms for selling in stores (EPOS), or selling online (e-commerce), or selling to B2B, or wholesale customers – itim can support all these in one platform. This is seen as a significant USP for omni channel retailing.
2. itim has enhanced its merchandising, stock management and optimisation solutions, again to support retailers selling across multiple channels. Numerous sales channels makes this much more complex, which itim is well positioned to be able to address.
3. itim is a market leader in Price and Promotions optimisation helping retailers increase cash generation, by either reducing the markdowns and discounts they give away or improving recoveries from suppliers through its advanced invoice matching, supplier funding tracking and a supplier payments platform.
4. itim is a leader in improving digital supplier collaboration through a series of portal applications built on its Electronic Data Interchange history. This is coming to the fore due to the rise in marketplaces.
The Board is resolutely focused on profitability and creating shareholder value and is taking the necessary steps to reduce investment in product, driving services revenues and returning the business to cash generation. Whilst this will impact the rate of subscription revenue growth it should result in higher margins and increased profitability.
Finally, I would like to thank our employees and our partners for the continued support they give to this business and the commitment and faith they show that we will be a successful business.
