As brands vie for millennial customers, dozens have turned to dotDigital (DOTD) to launch marketing campaigns across smartphones, email and social media. The provider of intuitive marketing software and managed services signed up more than 200 new clients including Paul Smith, TUI Travel and Stagecoach in the reported period. The upshot was a 30 per cent rise in operating profits to £3.3m.
Management's focus on winning higher value accounts, selling new products to existing customers and inking longer-term contracts drove the average monthly spend of dotDigital's clients up 31 per cent to £525. The increase also reflected soaring usage of connectors to the Magento e-commerce platform. And recurring monthly revenues from dotmailer, the group's flagship offering, leapt 35 per cent to £10m.
The company continued its international expansion: it opened a regional office in Australia and US sales soared 91 per cent. But investments in sales teams were slower than expected. That threatens to temper earnings growth in the coming financial year.
Broker N+1 Singer expects sales and cash profits to grow at compounded annual rates of 22 per cent and 25 per cent respectively over the next three years. It forecasts EPS of 1.8p in the year to June (FY2015: 1.6p).
| DOTDIGITAL (DOTD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 45.5p | MARKET VALUE: | £134m | |
| TOUCH: | 45-46p | 12-MONTH HIGH: | 55p | LOW: 29p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 7.5p | NET CASH: | £14.8m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 10.0 | 2.5 | 0.8 | nil |
| 2015 | 12.9 | 3.3 | 1.0 | nil |
| % change | +29 | +30 | +35 | - |
