Castleton Technology plc (AIM: CTP), the software and managed services provider to the public and not-for-profit sectors, announces its audited final results for the year ended 31 March 2018.
Financial Highlights
- Revenue up 15% to £23.3 million (FY17: £20.3 million) of which 60% is recurring (2017: 65%)
- Adjusted EBITDA* up 17% to £5.1 million (FY17: £4.4 million)
- Operating cashflow pre exceptionals up 13% to £5.2 million (FY17: £4.6 million)
– Post exceptionals at £4.5 million (FY17: £3.8 million) - Operating cash conversion pre exceptionals consistently strong at 101% (FY17: 105%)
– Post exceptionals at 88% (FY17: 86%) - Total net debt reduced from £9.0 million to £6.3** million
- Basic EPS up 786% to 5.23 pence from 0.59 pence for FY17
Operational Highlights
- 77% of new product and service sales were to existing customers showing significant progress in cross-selling strategy
- 40% of customers now taking more than one product or service, up from 35% in FY17
- Secured significant multi-year and multi-product contracts throughout the year, including:
– 7 year, £2.6 million contract with North Hertfordshire Homes for the provision of a fully managed hosted desktop service
– 10 year contracts with both Co-operative Housing Ireland (“CHI”) and Circle VHA, Ireland, for the integrated product suite, with CHI’s on a hosted basis
– Existing customer New Gorbals added four additional solutions to now have the complete solution set - Acquisition of Kinetic Information Systems Pty Ltd (“Kinetic”), the leading provider of software solutions to the Community Housing sector in Australia, for an initial cash consideration of AU$2.0 million (£1.14 million)
– Strategic acquisition to enable Castleton to leverage Kinetic’s market leading status and enhance the Group’s existing operations in Australia’s growing Community Housing sector - Post year end acquisition of exclusive and perpetual licence in relation to the platform upon which Castleton’s modelling solution, is based, for £1.6 million in cash and shares, as announced today
– No more licence fees payable, thereby enhancing the Group’s margin by c.£0.3 million per annum
– Licence enables Castleton to use, modify, maintain, distribute and sell the platform
Corporate Highlights
- Removal of all evergreen options from Company’s balance sheet
- Establishment of new Long-Term Incentive Plan to incentivise certain members of the Company’s management team expected to be instrumental in the creation of long-term value for shareholders
Dean Dickinson, CEO of Castleton, said: “We are pleased to report that Castleton has continued to perform well in delivering another year of significant organic growth in both revenues and profit, underpinned by ongoing excellent cash generation. The Group has also achieved a number of key operational milestones, notably the delivery of our integrated product suite on two milestone contracts and the acquisition of Kinetic, enhancing our existing operations in Australia’s growing Community Housing sector.”
“We have begun to capitalise on cross-selling opportunities with an impressive 77% of new sales being to existing customers, though there is still significant opportunity to further penetrate our customer base. We also continue to see success in winning significant, multi-year contracts with new customers. The market opportunity remains large and given the Group’s now established position as a ‘one stop shop’ serving the social housing sector, the Board is very optimistic about the Group’s continued growth prospects.”
*Before net finance costs, depreciation, amortisation, exceptional costs and share based payment charges
**Excluding £1.6 million owed in respect of exercise of options held by MXC Guernsey Limited, as announced on 21 February 2018
The Annual Report and Accounts for the year ended 31 March 2018 will be posted to shareholders at least 21 days prior to the AGM and a copy is available on the Company’s website at www.castletonplc.com.
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