PCI-PAL PLC (AIM: PCIP), the global provider of secure payment solutions, is pleased to announce a trading update for the year ended 30 June 2020.
The Group continues to build strong momentum and has made further significant progress across its key growth metrics. The Board confirms that trading for the year ended 30 June 2020 was in line with current market expectations.
Significant full year revenue growth
PCI Pal expects to report revenues of approximately £4.4 million, an increase of over 55% on the prior year (2019: £2.8 million). This year on year growth in recognised revenue reflects the continued increasing value of the Company's Total Annual Contract Value (TACV 1 ) of contracts signed to date. TACV has grown considerably year on year with a 68% increase to £6.7 million (2019: £4.0 million).
In the period, the Group signed new contracts worldwide with a recurring Annual Contract Value (ACV 2 ) of £2.6 million (2019: £1.9 million). The Group had a particularly strong second half performance, considering over half of that period was during the height of COVID-19 impacts in both the UK and US. The Group signed £0.8 million ACV in Q4 alone. Of the new contracts signed across the year, greater than 80% continue to be generated from channel partners, which is where we continue to see the primary long term, global scale opportunity for the business.
As the first-to-market in our space with a true-cloud platform since October 2017, we have been able to lead the way in becoming the go-to-provider of choice to some of the largest and fastest growing CCaaS and UCaaS vendors in the world, while also positioning ourselves well for the rapidly-increasing number of larger enterprise-size contact centres who are looking to cloud-based solutions to secure their data. This was further evidenced in the year by the signing of two major enterprise-direct contracts won in the US and in the UK.
Balance sheet to support growth strategy
The Group strengthened its balance sheet in the period with a £5.0 million equity fundraising in March 2020. As well as providing additional balance sheet strength, this fundraising enables the business to further increase its push to accelerate penetration of the North American market, as well as reinforce its product management capabilities. We are therefore planning to create new specific roles within the Group during the year, whilst continuing to prudently manage our expenditure, as we maintain growth momentum and continue to move towards the point of profitability within FY22. The Group finished the financial year with cash of £4.33 million and a bank loan of £1.27 million (net cash £3.16 million), with a further £1.25 million of loan facilities still available to draw down.
PCI Pal's business model and technology mean that it is well positioned to minimise any negative impacts of the COVID-19 pandemic on the business.
Transition to homeworking
Prior to the pandemic, more than 60% of PCI Pal's employees were already working from home regularly; and we were able to quickly move the remaining staff to homeworking in late March 2020 with very little disruption. This enabled us to retain full capacity across all departments and regions, with no furloughs, during what continued to be a busy period operationally for the business.
Some extension to new business sales-cycles
PCI Pal's revenue model is based primarily on minimum committed licences, with fewer customers operating on usage-based models. For some of these usage customers we did see a reduction in call volumes, particularly in the retail sector, however we have now begun to see these volumes pick up as companies and their customers settle into the new norms. Apart from this short term decline we experienced little impact on our expected recognised revenues for FY20.
In terms of new business sales, we have seen some delays in decision-making and contract signing as a result of prospective customers prioritising their own handling of the pandemic. The majority of these instances have not resulted in lost sales, rather a delay to anticipated close dates. This has naturally had an impact on our Q4 new sales which would have been even stronger than reported above but for the pandemic. These delays will though have a knock-on impact in reducing recognised revenue in FY21 due to the nature of our revenue model.
Cloud capabilities protecting ability to deliver
As a cloud-only provider there is no necessity, or customer/partner expectation, for our people to attend customer or partner sites for delivery of our services. In fact, as a result of the pandemic we have been asked to accelerate some of our deployments to allow those customers to move their contact centres to homeworking, thereby allowing them to continue to take payments securely. Overall, we have seen no impact to our ability to deliver projects and successfully delivered services for 23 new customers between April and June 2020.
Customers adapting to homeworking
Longer term, we firmly believe that the need for our services is only further heightened when contact centre agents are required to work from home. It is extremely difficult to secure payment data for a homeworking agent without using technology such as our own. In April, and in response to the pandemic and homeworking demand, we launched our Rapid Remote offering that enables new customers to be live with secure payment services within 48 hours. Within 45 days of the launch we had signed over $0.2 million of new ACV directly linked to enquiries driven by this new product offering.
Guidance reflects continued global growth opportunity
FY20 has been a year of significant progress for the Group including strengthening our balance sheet with the fundraise. Nonetheless, given the COVID-19 pandemic, we are moving into FY21 with a careful and balanced approach to increased investment into our North American operation and expansion of our product management functions.
As we start FY21 with a strong level of TACV, and as referenced above, some of the ongoing delays in decision-making and contract signing have inevitably created some degree of uncertainty as to the timing of both new deals being signed and implementation timing of new and recent contract wins. Whilst we remain confident of delivering significant year on year growth in FY21, given the current environment, it is prudent to adjust our market guidance downwards for the year to account for these factors. As highlighted above, we are confident in the long term strength of our market opportunity and now expect to grow revenue by between 50 to 60% in FY21.
Analyst Briefing: 11.00 a.m. on Thursday 9 July 2020
An online briefing for Analysts will be hosted by James Barham, Chief Executive, and William Good, Chief Financial Officer, at 11.00 a.m. on Thursday 9 July 2020. Analysts interested in attending should contact Walbrook PR on [email protected] or 020 7933 8780.
Investor Presentation: 3.00 p.m. on Thursday 9 July 2020
The Directors will hold a presentation to introduce PCI Pal to investors and cover the trading update for the year and prospects at 3.00 p.m. on 9 July 2020.
The presentation will be hosted through the digital platform Investor Meet Company. Investors can sign up to Investor Meet Company and add to meet PCI-PAL PLC via the following link https://investormeetcompany.com/pci-pal-plc/register-investor . For those investors who have already registered and added to meet the Company, they will automatically be invited.
Questions can be submitted pre-event to [email protected]m or in real time during the presentation via the "Ask a Question" function.
1 TACV is the total annual recurring revenue of all signed contracts, whether invoiced and included in deferred revenue or still to be deployed and/or invoiced.
2 ACV is the contracted annual recurring licence revenue component of the contract.
For further information, please contact:
Via Walbrook PR
James Barham - Chief Executive Officer
William Good - Chief Financial Officer
finnCap (Nominated Adviser and Broker)
+44 (0) 20 7227 0500
Marc Milmo/Simon Hicks (Corporate Finance)
Richard Chambers (Corporate Broking)
+44 (0) 20 7933 8780
Tom Cooper/Paul Vann
+44 (0) 797 122 1972
About PCI Pal:
PCI Pal is a provider of secure payment solutions for contact centres and businesses taking Cardholder Not Present (CNP) payments. PCI Pal's globally accessible cloud platform empowers organisations to take payments securely without bringing their environments into scope of PCI DSS and other card payment data security rules and regulations.
With products served from PCI Pal's cloud environment, integrations with existing telephony, payment, and desktop environments are light-touch, ensuring no degradation of service while achieving security and compliance.