Proactis Holdings plc share price, company news, analysis and interviews

Proactis Holdings PLC, (LON:PHD), the business spend management solution provider, has announced that it has signed a 5-year contract with a transportation company in Germany to provide its business spend management solution. This contract win represents the third new customer in Germany to sign up under the Group’s new go-to market strategy.

The customer has selected Proactis to digitise its procurement processes and offers further potential for new business through invoice automation and workforce management.

As announced previously, the Group adopted a new go-to market strategy for each of its US, France and Germany territories designed to replicate that of the UK and the Netherlands. This contract builds upon the contracts already signed across those territories.

Tim Sykes, Chief Executive Officer at Proactis Holdings, commented:

“We are delighted to have been selected once again in Germany, following successes in North America last month and in both Germany and France late last year. 

We have demonstrated that our go to market strategy, our positioning and our solutions are relevant for our target market segment in each of the territories that we operate in and we can now see the momentum and volume of business increasing as pipeline starts to turn into contracts more regularly.

Whilst conscious that the pandemic continues to impact the pace of our progression, we grow more confident that the market opportunity for Proactis in each of the US, France and Germany is as great as it is in the UK and the Netherlands and that we will continue to see further acceleration of deal flow over the coming months.”

Proactis Holdings PLC (LON:PHD), the global spend management solution provider, has today provided an update on trading for the six-month period ended 31 January 2021.

Trading Update

The Group’s progression over the period has been strategically significant with encouraging commercial traction and growing pipelines in each of its operations in France, Germany and the US under the new go-to-market strategy. In addition, the Group signed its first bePayd contracts under both the buyer-funded and the Proactis-funded models.

The Board believes that delivering these milestones validates the Group’s strategy and provides confidence of sustainable momentum and progression in the second half of the year and beyond. 

New business deal intake for the period was strong with total contract value of £6.7m delivered, despite the persistence of previously announced COVID-19 related headwinds (H1 2020: £7.5m; H2 2020: £7.1m).  The Board expects to progress TCV in the second half of the year as the Group accelerates pipeline conversion in the US, France and Germany and as COVID-19 deferred contracts from the first half come through.

Customer churn for the six-month period of £1.5m (31 January 2020: £2.1m) was in line with the Board’s expectations and included £0.3m from Heightened Risk Accounts (“HRAs”) as defined in previous announcements.  Accordingly, the Board expects to be able to report further modest progression in the Group’s underlying ARR, building on that reported for the year ended 31 July 2020.

The Board expects to report revenues for the six-month period of £23.7m (H1 2020: £24.5m) and Adjusted EBITDA* of £6.2m (H1 2020: £5.6m), against a comparative period unaffected by COVID-19.  Operating margins have improved following the restructuring of the Group’s management team and operating cost base.

Net bank debt as at 31 January 2021 was £39.7m (31 July 2020: £37.1m).  The position has been impacted by lower cash levels in the Group’s outsourced sourcing business resulting from lower trading volumes impacted by COVID-19 as previously reported, and cash flow from upfront costs of the restructuring of its management team and operating cost base.

Outlook

The Group expects to be able to report performance in line with Board’s expectations for the period.  Whilst the Board is conscious of the ongoing impact that COVID-19 is having across the business, its confidence in the Group’s prospects for the mid-term has been strengthened further through the strategic milestones that have been achieved during the period.  The Board looks forward to continued progression.

Notice of Results

The Group currently intends to release its interim results for the six-month period ending 31 January 2021 on 29 April 2021.

Tim Sykes, Proactis Holdings CEO, commented:

“I am encouraged by the progress the Group has made during the period as our strategy becomes embedded within our teams across the Group.  We have met every milestone that we needed to in order to validate our strategy for mid-market business spend management solutions and for bePayd and we can now push forward with confidence to pursue the market opportunity we have.”

* Adjusted EBITDA is calculated by adjusting profit before taxation to exclude the impact of net finance costs, depreciation, amortisation, share based payment charges and non-core net expenditure.

Financial expectations noted above are unaudited.

The company went on to announce that it has signed a contract with Denbighshire County Council (“DCC”) to provide its early payment service, bePayd, into DCC’s supply chain.

bePayd will enable DCC’s suppliers to receive an automated notification of approved invoices with the option of accelerating payment before the pre-agreed contractual terms.  Proactis will fund the accelerated payment in exchange for a small discount paid by the supplier.

It is anticipated that bePayd will be offered, within the first year, to approximately 3,000 suppliers that generate over 50,000 invoices per annum with a spend value exceeding £100m.

Councillor Julian Thompson-Hill, Denbighshire County Council’s Lead Member for Finance, Performance and Strategic Assets, commented:

“The Council recognises the importance of its valuable supply chain, especially in these difficult times.  Proactis has recognised the needs of our suppliers and we are keen to be able to offer bePayd to them.”

Tim Sykes, Chief Executive Officer, commented:

“DCC is a long-standing and valued customer of Proactis and we are delighted that it has agreed to offer bePayd to its suppliers.  bePayd is a natural extension to the portfolio of Proactis’ existing solutions adopted by DCC and we expect that it can drive liquidity into the supply chain.  We will now work closely with DCC to design and implement bePayd’s roll-out and look forward to updating the market in line with progress.”

Proactis Holdings PLC (LON:PHD), the business spend management solution provider, has announced that it has signed its first contract for the provision of bePayd, its accelerated payment service, with Experbuy, a French company offering a business process outsourcing solution that enables companies to manage their tail spend purchases more effectively.

Experbuy is a subsidiary of EPSA, a group with international operations helping organisations increase performance and profitability through three major areas of expertise: support with purchasing, organisation, performance and change management issues; cost control through the optimisation of tax, social security and occupational accidents; and the marketplace (which Experbuy forms part of).

This contract enables Experbuy to deploy bePayd for use by its own suppliers which aggregate to approximately €180m of annual spend across 65,000 suppliers. 

bePayd allows suppliers to accelerate the payment of an approved invoice in return for a small discount and is primarily aimed at the long tail of small suppliers in the supply chain, a population that is currently underserved. bePayd is market-leading in its simplicity, speed and convenience without any detriment to security or risk and is entirely flexible down to single invoice level with extremely low values because of the end-to-end automation of the process. Funding of the early settlement can be provided by the customer (as is the case with Experbuy), Proactis (through a dedicated facility with HSBC) or a blended model.

Tim Sykes, Proactis Holdings CEO, commented:

“I am delighted to have signed our first bePayd contract with Experbuy, part of the EPSA Group. We look forward to working with Experbuy to drive take-up of this great service to suppliers over the coming months and beyond. As we look forwards, the solution has never seemed more relevant, and with a healthy pipeline of opportunities, we are optimistic about its prospects in 2021.”

Proactis Holdings PLC (LON:PHD), the business spend management solution provider, has announced the appointment of Nick Brown to the Board as Independent Non-Executive Director, with immediate effect.

Nick has over 27 years’ experience in senior positions within software and technology companies with a strong track record of delivering successful turnaround and growth outcomes internationally.

Nick is currently Group Managing Director of GB Group plc, an AIM listed software company with international operations that delivers location, identity and fraud software and solutions in high growth markets. Nick was recruited to design and deliver a turnaround plan for GB Group plc and is part of the executive team which took the business from a market capitalisation of circa £5 million to £1.5 billion, successfully growing the business into Europe, USA, Asia and Australasia, while continually maintaining leading levels of employee and customer satisfaction across the Group.

Prior to his current role, where he has worked for 13 years, Nick was General Manager, Partner Programmes and Head of Mid-Market Sales at Sage UK. Nick has also held senior sales and marketing positions at large technology businesses Microsoft Business Solutions and Fujitsu Services.

Following his appointment, Nick will become Chair of the Remuneration Committee and a member of the Audit Committee. The appointment is in line with the Board’s previously stated intention to transition to a board where at least half its members, excluding the Chairman, are independent non-executive directors.

Alan Aubrey, Non-Executive Chairman commented:

“The Board is very pleased to welcome Nick to Proactis Holdings. He brings with him significant industry and public company experience and I have no doubt his skillset will be a valuable addition to the Board as the Company enters the next stage of its growth.”

Proactis Holdings PLC, (LON:PHD), the business spend management solution provider, has announced that it has signed a 3-year contract with a major German DIY retailer to provide its business spend management solution.

As announced previously, the Group adopted a new go-to market strategy for each of its US, France and Germany territories which is designed to replicate that of the UK and Netherlands.  This contract win represents a strategically important milestone, being the second new customer in Germany to sign up under that new strategy.

The solution will be deployed in Germany initially before being rolled out into new territories through Central and Eastern Europe.

Tim Sykes, Chief Executive Officer at Proactis Holdings, commented: 

“The fact Proactis has been selected by a major German multi-national retail business demonstrates the quality of our offering. The win is further validation of our new go-to-market strategy in Germany and highlights the relevance of our solution for that market. We are excited to establish a long-term partnership with this customer and look forward to supporting its deployment of our software throughout Europe.”

Proactis Holdings PLC (LON:PHD), the business spend management solution provider, has announced its audited results for the financial year ended 31 July 2020.

Financial highlights:

Post period end highlights:

Tim Sykes, Proactis Holdings CEO commented:

“Despite the challenging macro-economic environment, we have executed our strategy well as we drive the Group toward a return to growth in FY21 and beyond.  Our strategy is to replicate the go-to-market strategy of the UK and Netherlands in each of the US, France and Germany and we have made substantial headway with first sales of our mid-market single platform solution in Germany and France.

Although we are encouraged by the progress that we have made, we are also mindful of the impact of COVID-19 which is slowing the rate of commercial progress – whilst our pipeline is strong, demand continues to be marginally subdued through this period and sales processes are more challenging because of competing priorities. Despite these challenging market conditions, we are prudently managing our costs such that the Board continues to expect to meet our earnings forecast for FY21.

Notwithstanding this, the Group’s new business performance is encouraging and combined with our return to organic growth in underlying ARR are material indicators of our progress.  Our business has proved to be robust through this extraordinary period and our pipeline and forward revenue visibility positions us well for the future. We’re in an exciting growth market and are poised to accelerate our growth, earnings and cash flow over the coming years.”

Proactis Holdings PLC, (LON:PHD), the business spend management solution provider, has announced that it has signed a 7-year contract with Union Sanitaire et Sociale Aude Pyrénées (“USSAP”) to provide its business spend management solution.

As announced previously, the Group adopted a new go-to market strategy for each of its US, France and Germany territories designed to replicate that of the UK and Netherlands. This contract win represents a strategically important milestone, being the first new customer in France to sign up under that new strategy.

The solution will cover the contract to order process and will initially be deployed with 100 users with an expectation to increase the number substantially during 2021.

USSAP is a not-for-profit organisation in the medical and health sector located in the South-West region of France consisting of 60 self-managed locations and approximately 1,700 employees.

Ms. Valliere, Chief Financial Officer at USSAP, commented:

“After a year and a half researching the market, USSAP selected Proactis because of its experience with major players in the healthcare sector such as UniHA and AP-HP.  We particularly appreciated the ergonomy and intuitive use of the Proactis solution and, as a non-profit association, we also seek value. The ability to implement the Proactis solution quickly and without additional integration and training costs was crucial.”

Tim Sykes, Chief Executive Officer at Proactis Holdings, commented:

“This contract win is a crucial proof point in Proactis’ strategy to sell its single business spend management solution internationally. We are delighted to have been selected by USSAP in France following our success at DWIYDAG in Germany.”

Proactis Holdings plc (LON:PHD), the business spend management solution provider, has provided the following update on trading for the financial year ended 31 July 2020.

Trading Update

The Group’s performance was in line with board and market expectations for the year despite the emergence of the COVID-19 global pandemic during the period, demonstrating the resilience of the Group’s business model.

New business deal intake for the year was at a record high as the Group secured a 29% increase in total contract value (“TCV”) of £14.6m (2019: £11.3m). The Board maintains its expectation of increased levels of TCV over the coming years, with a growing pipeline and momentum building following the roll-out of the Group’s new go-to-market strategy.

The Board expects to report revenues of £49.2m for the year and adjusted EBITDA of £11.8m.

Net bank debt as at 31 July 2020 was £37.1m (31 July 2019: £36.5m) with the year-end position impacted by the timing of settlement in certain accounts receivable balances as well as lower transaction volumes due to COVID-19 in the Group’s outsourced services business. If volumes had been at the same level as prior period reporting dates, net debt would have been approximately £36.0m.

This encouraging performance has been achieved despite the impact of COVID-19 which has caused slower pipeline conversion of the Group’s new supplier-paid solution, bePayd, with prospects temporarily shifting priorities. The Board remains encouraged by the levels of interest in this solution and anticipates progress in the near term.

Overall, the outlook for the new financial year remains encouraging, although the Board remains cautious given the macro-economic backdrop and associated risk across new business trends, project implementation deferrals, volume-based contracts and customer solvency. The Board looks forward to the next 12 months and is confident of delivering significant value with the business now well positioned and with a pipeline that is building.

Tim Sykes, Proactis Holdings CEO commented:

“We delivered an encouraging new business performance in the period against a challenging macro-economic backdrop, demonstrating the effectiveness of our strategy, the resilience of our business model and the ability of our teams to deliver despite a change in working practices.

“Moving forwards, we expect to make further progress in growing the rate of new business intake and we will continue to focus on retention and margin improvement to drive cash flow, whilst maintaining a measured level of investment to support our long-term growth ambitions.

“There can be no certainty about the impact that the pandemic will have on our markets. Demand has been marginally subdued through this period and sales processes have been more challenging because of competing priorities but the Group is well-positioned to continue to capitalise on the opportunities available to it. Accordingly, we expect to continue to make further progress and we remain confident in our ability to accelerate growth whilst further improving profitability and cash flow.”

Financial expectations noted above are unaudited and are subject to the completion of year-end financial close and audit processes.