Proactis set to gain work from Brexit

Proactis said revenue rose 106 per cent to 52.2mProactis said revenue rose 106 per cent to 52.2m
Proactis said revenue rose 106 per cent to 52.2m
Software firm Proactis said the complexities of leaving the EU will hand the firm more work as customers attempt to make their businesses Brexit compliant.

The Wetherby-based firm is keen to help customers, who include Grant Thornton, Marshalls, Air France, Chelsea FC and Savills, prepare themselves for Britain’s departure so they can trade successfully after Brexit.

The group’s chief financial officer Tim Sykes said: “Our product is designed to help difficult transactional processes, so taking a country out of the EU actually helps us.

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“We don’t have exports - business is dealt with by service providers in that country.

“The opportunities are quite high. People will need help to make their business Brexit compliant. The complexities of Brexit facing our customers gives us more work.”

He was speaking as the group announced annual results for the year to July 31. Underlying pre-tax profits almost trebled to £12m following strong growth in new business.

Revenue rose 106 per cent to £52.2m.

The firm said its retention performance has recovered to more normal levels after a disappointing period. The group expects to see a return to sustainable organic growth with significant opportunities in the US and North West Europe.

“We’ve returned to normalised levels,” said Mr Sykes.

“We shouldn’t see that size of loss again.”

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Shares in software firm Proactis plunged 35 per cent in April on the news it had lost Shell and BP as clients.

The firm said it had expected to lose the two oil companies as clients over the long term as they consolidated the number of software providers they use, but the axe fell sooner than expected.

Chief executive Hamp Wall said: “The group’s new business performance is as strong as we had planned for and our retention performance has recovered to more normalised levels after a disappointing period.”

The group reported a strong performance in the UK and hit its first year target in the EU and the US.

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Mr Wall said: “I remain encouraged by the progress the group has made during the year and the results of the substantial effort of our team.

“This has been the first full year of ownership of Perfect which has dramatically changed the group’s profile and has accelerated its strategy.”

Mr Sykes added: “Last year’s deal was transformational in size and scale. The EU and the US are 10 times the size of the UK market so the opportunity is massive.”

The group’s biggest markets are the UK, France, Germany, the US and the Netherlands.

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Mr Sykes said: “We are lucky in that we don’t have to go anywhere else.”

Analyst Andrew Darley at FinnCap said: “Post acquisition expectations of a year of cost management and delivery of synergies in 2018, before driving for revenue growth from the combined group in 2019, are on track.

“While the unexpected customer churn revealed in April was a setback, prelims reveal strength in profitability and underlying cash generation. With the opportunity globally to export the success of the solution set as experienced in a series of core verticals in the UK, to the US, France and Germany in particular, we look forward to news flow of contract wins.”

He said that the management team can now focus beyond driving the business combination, and specialist staff are now in place to advance the significant market opportunity.

Mr Darley at FinnCap reiterated his 250p target share price.