28 August 2024

PCI-PAL PLC

("PCI Pal", the "Company" or "the Group")

FY24 Trading Update, New Partner Announcement, & Notice of Results

PCI-PAL plc (AIM: PCIP), the global cloud provider of secure payment solutions for business communications, announces a trading update for the financial year ending 30 June 2024.

Trading Update

The Board acknowledges that the timing of its trading update is later than prior years which is due to the Company's audit process taking longer than expected this year.

Reported revenue for the year is expected to be approximately £18.0 million, a 20% increase year on year (2023: £14.9 million).  This is c.£0.7 million below the level the Board had expected to report at the year end.  The majority of this revenue shortfall relates to a specific project where the customer has paid in full and, in the Board's opinion at the time, the Company had delivered the services and revenue could be recognised in FY24.  However, following commencement of the Company's annual audit, and discussions with its auditors, the Board has decided it is appropriate to defer the £0.7 million of revenue in respect of this specific project from FY24 into FY25.  The deferral of revenue into FY25 has no impact on cash and will be beneficial to the FY25 financial outlook.

Accordingly, the Company now expects to report an FY24 adjusted¹ loss before tax of approximately £0.6 million, with an adjusted² EBITDA profit of c.£0.9 million (2023: loss of £1.1 million).  The Group achieved an adjusted³ free cash inflow of approximately £0.9 million (2023: outflow £2.4 million), resulting in a strong year-end balance sheet, with net cash of £4.3 million. 

New business licence sales for FY24 were £3.8 million ACV (2023: £4.2 million) which, although 10% lower than FY23, is measured against a very strong prior year which included the signing of one of the Company's largest single contracts to date.  The Board is particularly pleased that the underlying trend of run rate new business is strong and ahead of the prior year with a 13% increase in new logo contracts signed in the year.  This has resulted in notably more consistent quarter on quarter new sales throughout the year. This cadence provides the Board with confidence in the opportunities for continued further growth into FY25 and beyond.

Partner Update

The Company's partner eco-system has continued to go from strength to strength and be the key driver of the Company's growing sales pipeline.  On 13 November 2023, the Company reported the addition of Zoom as a global reseller. The Board is now pleased to report that as expected, the Zoom integrated offering across both their CCaaS⁴ and UCaaS⁵ product suites is available across the North America and EMEA regions.  The Company has signed several new customers through this partnership since reaching full launch at the back end of H2.

Post period end, the Company has signed a major new global reseller contract with a US headquartered business communications vendor that has extensive CCaaS and UCaaS operations across the globe.  The new contract, which follows a lengthy procurement process by the partner to refine their focus to one single provider for secure payments, has immediately resulted in the signing of the partnership's first customer. The partner will now go through a full on-boarding process which will include a phased launch process of the integrated solutions across the next six months. 

Commenting on the revised results expectation, Simon Wilson, Chair of PCI Pal, said:

"The Board and Audit Committee is disappointed that the Company now does not expect to report a full year Group adjusted profit before tax, contrary to management expectations, due to the timing of revenue recognition relating to a specific customer. The fact that this revenue is now expected to be recognised in FY25 instead of FY24 does not detract from the successful operating outcome that the team has achieved this year, and the consequent substantial swing from negative to positive adjusted free cash flow."

Commenting on progress in the period, James Barham, Chief Executive Officer of PCI Pal, said:

"I am very pleased with the progress the business has made in FY24 with ARR continuing to grow at market leading rates, the launch of new product features and enhancements, and the addition of exciting new enterprise partners to our partner eco-system.  This progress has been achieved despite the distraction of the unfounded patent litigation that we were forced to deal with and successfully resolved as announced on 27 June 2024. 

"The settlement and full resolution of the patent case, together with the strength of the underlying business provides the Board with increased confidence in the future opportunities for the business. We are therefore focused on capitalising on the undoubted market opportunity before us as we look to deliver against our strategy of further growth, both organic and inorganic."

Notice of Results

The Company expects to announce its final results in mid-September 2024.

The Board believes that current market consensus for the year ended June 2024 are revenues of £19.1m and adjusted profit before tax of £0.1m.

¹ Adjusted profit/loss before tax is stated before exchange movements charged to the profit and loss account, exceptional items and expenses relating to share option charges.

²Adjusted EBITDA is the profit on operating activities before depreciation and amortisation, exchange rate movements charged to the profit and loss account, exceptional items and expenses relating to share options

³ Adjusted free cash in flow is net increase in cash excluding the net proceeds from the issue of equity and exceptional costs

⁴ CCaaS is Contact Centre as a Service

⁵ UCaaS is Unified Communications as a Service

For further information, please contact:

About PCI Pal:

PCI Pal is a leading provider of Software-as-a-Service ("SaaS") solutions that empower companies to take payments from their customers securely, adhere to strict industry governance, and remove their business from the significant risks posed by non-compliance and data loss. Our products secure payments and data in any business communications environment including voice, chat, social, email, and contact centre. We are integrated to, and resold by, many of the worlds' leading business communications vendors, as well as major payment service providers.

The entirety of our product-base is available from our global cloud platform hosted in Amazon Web Services ("AWS"), with regional instances across EMEA, North America, and ANZ.

For more information visit www.pcipal.com or follow the team on Linkedin: https://www.linkedin.com/company/pci-pal/