Proactis reports "substantial" progress

Proactis said there has been no disruption to customer serviceProactis said there has been no disruption to customer service
Proactis said there has been no disruption to customer service | other
Software firm Proactis said all of its staff have transitioned to working from home with minimal disruption from the Covid-19 crisis.

The Wetherby-based firm, whose customers include Grant Thornton, Marshalls, Air France, Chelsea FC and Savills, said it has dealt with the immediate effect of the coronavirus crisis "extremely well" and the recurring revenue, long-term contract business model is proving resilient at this stage.

Tim Sykes, chief executive, said: "Our team is performing well, remaining highly connected and there has been no disruption to customer service.

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"We remain vigilant to any indicators of risk, particularly around staff welfare, deferred pipeline build, reduced volume in transactional-priced contracts and potential delays to implementation projects which may have a more significant impact on the business if the crisis persists."

The firm said it has made substantial progress during the first period of its new strategy and this has continued.

"Whilst mindful of the wider economic outlook, the group’s return to organic growth in its annualised recurring revenue coupled with its forward revenue visibility, profitability and solid financial position provides me and the board with confidence that the group can now move forward confidently to execute its strategy and realise its potential," said Mr Sykes.

"Accordingly, at this stage, the board maintains its guidance for the full year outturn.”

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In the half year to January 31, reported revenue fell 3 per cent to £24.5m due to high customer churn in prior years, which has since improved.

The group reported solid new business deal activity with 29 new name deals, including APHP Hopitaux de Paris in France, State of Connecticut in the US and The Christie NHS Foundation Trust in the UK.

Proactis said retention rates have improved across the core business.

"The group announced a refreshed strategy and has made substantial progress against this in the period, which has resulted in significantly improved new business performance and also in customer retention," said Mr Sykes.

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The firm reported strong upsell activity with existing customers with 70 deals in the period, up from 54 in the previous half year period.

Analyst Andrew Darley at FinnCap said: "Positive interims for the period detail performance in line with unchanged expectations, and the confrontation of the three themes which had concerned investors: covenant headroom; churn; and growth.

"Churn has been arrested, with retention improved across the business."