Email marketing campaigns may seem outdated in the world of digital advertising, but they remain a crucial promotional tool for the vast majority of companies. Plus, the increasingly technological know-how required to run an effective online ad campaign means more companies are turning to specialists. It seems dotDigital (DOTD) is reaping the benefits of this trend. The group signed over 200 new clients in the six months to December 2016, while average monthly billing increased by almost a quarter to £650.
The level of growth earned from existing customers is also impressive. The launch of new products and services sent recurring revenues up 71 per cent, so recurring revenue makes up over 81 per cent of group sales. And a reduction in customer churn has also helped the group maintain its margins.
Geographical expansion has also fuelled growth. In the reported period, the group established operations in Australia and signed its first partnership in Singapore. Management says this should increase brand awareness in the region and help build on the 139 per cent revenue growth reported in these results. In the US, sales growth was slower, but is expected to pick up in the second half of the year following changes in structure, pricing and the launch of product bundles.
Broker finnCap expects adjusted pre-tax profit of £7.8m for the year to June 2017, giving EPS of 0.5p (from £6.3m and 0.8p in FY2016).
DOTDIGITAL (DOTD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 60p | MARKET VALUE: | £177m | |
| TOUCH: | 59-61p | 12-MONTHHIGH: | 62p | LOW: 38p |
| DIVIDEND YIELD: | 0.7%** | PE RATIO: | 30 | |
| NET ASSET VALUE: | 9.3p* | NET CASH: | £18.9m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 12.9 | 3.3 | 1.0 | nil |
| 2016 | 15.0 | 4.3 | 1.2 | nil |
| % change | +17 | +29 | +19 | - |
Ex-div: na Payment: na *Includes intangible assets of £4.3m, or 1.5p a share **Excludes a special dividend of 0.41p a share | ||||
