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 six months ended 30 June 2024.
Financial Highlights
· Group revenue increased by 19% at £8.8m (HY23: £7.4m), driven by both new contract wins and higher levels of service revenue
· Annual recurring revenue (ARR)1 of £13.2m
· Significant increase in adjusted EBITDA2 to £1.2m (HY23: loss of (£0.2m), FY23: £0.7m) through increased sales activity in H1 24, while maintaining a tight control of costs
· Materially improved adjusted EBITDA2 margin of 13% (HY23: (3)%, FY23: 4%)
· (Loss)/profit before tax (£0.1m) (HY23: (£1.1m), FY23: (£1.1m))
· Adjusted Earnings per share3 0.18 pence (HY23: (3.02p), FY23: (2.86p))
· Strong cash generation in the period, resulting in net cash of £3.0m (FY23: £1.9m, HY23: £2.7m)
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
Ali Athar, CEO of itim Group, commented: “I am pleased to report that itim is gaining significant traction in the market. Our half-year results demonstrate measurable progress across key metrics and we are delighted to report a significant increase in revenue, a positive EBITDA return and a strong cash position.
“As a consequence of the positive momentum, including new contract wins, in addition to encouraging trading since the beginning of H2, the Board anticipates delivering full year results ahead of current market expectations.”
CEO Statement
I am pleased to report that our Company is gaining significant traction in the market. Our half-year results demonstrate measurable progress across key metrics. In the three years since our successful IPO, we have strategically invested the capital raised to expand our product portfolio and enhanced our core capabilities.
Revenue for the six month period was £8.8m (HY23: £7.4m) an increase of 19%, of which recurring revenues were £6.6m (HY23: £6.4m) representing 75% of sales and underpinning future sales. Adjusted EBITDA (EBITDA excluding share-based payment charges and exceptional items) increased significantly to £1.2m from a loss of £0.2m last year. The loss before tax has been reduced materially to £0.1m (HY23: loss £1.1m). Cash balances also improved to £3.0m at the period end (FY23: £1.9m). Adjusted profit per share was 0.18p (HY23: loss 3.02p). (For adjustments see Financial Highlights).
Our recent announcements underscore the growing confidence that both existing customers and prospects are placing in our platform. This positive momentum is a testament to our team’s dedication and the value we deliver to our clients.
We have also refined our branding and positioning to better communicate our unique value proposition. When retail executives ask us, who we are, and what we do, and what makes us different:
The answer is clear.
We are ‘retail engineers’ specialising in the transformation of retail businesses into high-performing organisations through technology enablement. Our mission is to guide retailers towards omni-channel excellence and facilitate their transition to a customer-centric Unified Retail Business Model.
Our definition of high performance is ambitious yet achievable: for our clients – we target sales increases of 30-50% and profit improvements of 50-100%. While these figures may seem bold, our case studies demonstrate their feasibility. We believe that recent technological advancements have created a once-in-a-decade opportunity for a step change in retail productivity.
Our Approach
We focus on five areas to drive transformational change:
· Enhanced Customer targeting and engagement
· End-to-end process integration for increased efficiency and effectiveness
· Elevated omni-channel service and convenience to improve customer experience
· Digital connectivity with consumers (mobile) and suppliers (marketplace strategies)
· AI-driven optimisation of critical processes:
o Sales & Marketing
o The Assortment (Merchandising)
o The intake of stock
o Stock and space distribution
o Price and promotions
These efforts culminate in a significant performance uplift for our clients.
This is enabled by our UNIFY platform, with its four pillars of sales, stock, price & supply, which supplements or replaces elements of the retailer’s system stack, as appropriate. We have 80 customers using elements or the end-to-end platform. We do this cost-effectively with minimum CAPEX expenditure.
Our Unique Market Position
Our approach distinguishes us from competitors in several key ways:
1. As retail engineers, we go beyond consulting to provide actionable solutions
2. We build upon retail expertise and best practices to deliver tangible results
3. Our focus is on the end-to-end operating model, and end-to-end processes, which is different from competitors, who as best of breed providers, focus on functional excellence
4. We are not software salesmen, but use our UNIFY platform to supplement and replace part of a retailer’s system stack to deliver end-to-end excellence
5. Our emphasis is on delivering outcomes, with software serving as a critical enabler
The recent appointment of a former McKinsey partner as non-executive Chairman reinforces our commitment to delivering high-value solutions and strengthening our services revenue. This strategic move, coupled with our growing subscription revenues should take us to the goal of becoming cash generative again and over the coming years see more retailers move onto our platform.
In conclusion, I am excited about the future of our Company. We have a clear vision, a defined purpose, a unique market position, and a growing base of supportive customers. Our value proposition is both exciting and tangible, and I am confident in our ability to drive continued growth and success in the retail transformation space.
Outlook
As a consequence of the positive momentum, including new contract wins, in addition to encouraging trading since the beginning of H2, the Board anticipates delivering full year results ahead of current market expectations.
