dotDigital Group PLC's (LON:DOTD) international expansion has progressed well in 2016, with half year revenues in the US up 49% to US$4.4mln.
In a trading update for the year to June, the bulk email specialist group confirmed that revenue was up 26% year-on-year, an increase of 21% in the UK and 58% in international territories.
Regarding Brexit, the group provided an early assessment of possible implications but assured investors that a diverse spread of clients across many sectors and geographies combined with the predicted growth of digital marketing channels, meant any impact would be limited.
Adjusted earnings (EBITDA) for the full year were also slightly ahead of market expectations, said the group.
Recurring revenues from enhanced product functionality, increased by 106% with overall monthly recurring revenues from the dotmailer platform’s Software as a Service technology usage was up 31%.
Average revenue per client continued to grow in line with targets and was up 29% at £575 per month compared to £445 in the previous period.
The group finished the year with a net cash balance of £17.2mln, implying a net cash inflow in the period of £5.3mln.
“This continued strong performance with revenue growth of 26% is again extremely encouraging and illustrates that our profitable organic growth strategy continues to deliver against strong contracted recurring revenues in the business,” said chief executive Milan Patel.
'Ringing endorsement' from Magento
While US expansion is clearly going well, the company has key six channel partners in Australia, several of which operate across the broader Asia Pacific region, and a strong sales pipeline has now started to be built from these relationships.
In November dotDigital was chosen by e-commerce technology behemoth Magento Commerce as one of only two “platinum partners”.
The other was online payments outfit PayPal, which, like Magento, was once part of eBay.
The company hailed the partnership as “a ringing endorsement” of the dotmailer platform, and also the company's ability to successfully support a growing international customer base.
Brokers remain upbeat
Shore Capital said: "Metrics are healthy across the board and the focus now will move to toward expectations for the year ahead which currently assume an acceleration of EBITDA growth to 28.6% from 13.7%. These look lofty but achievable to us."
"We still like the long term prospects for the company," continued the broker, "with high recurring revenue and growth metrics that most companies dream of, the company appears to executing well and maintaining high levels of growth."
-updates for July2016 trading update--