Well-known brands snapped up marketing software tools from dotDigital (DOTD) as they rushed to launch email, mobile and social media campaigns in the reported period. Brisk demand helped the digital marketing group chalk up an 18 per cent increase in operating profit to £6.2m.
Management focused on signing high-value clients and selling additional functionality to existing customers. It landed Vogue UK and Dune, and drummed up about £575 in average monthly spend per client, a 29 per cent increase. Moreover, sales leapt 21 per cent in the UK and 58 per cent abroad. One bright spot was the US, where dollar revenue leapt 43 per cent and a recent hiring spree bodes well for future growth.
Monthly recurring revenue from the group's connector to the Magento e-commerce platform leapt a quarter to around £1,300 per client a month. Management hopes to replicate this deal with with other partners. It may also roll out a self-service platform in overseas markets to reduce the risks of expansion. Broker finnCap expects adjusted pre-tax profit of £7.7m in the year to June 2017, giving EPS of 2.3p, up from £6.3m and 1.8p in FY2016.
| DOTDIGITAL (DOTD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 53p | MARKET VALUE: | £156m | |
| TOUCH: | 52-54p | 12-MONTH HIGH: | 56p | LOW: 38p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 8p | NET CASH: | £17.3m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 9.5 | 2.4 | 0.8 | nil |
| 2013 | 12.2 | 4.0 | 1.4 | 0.10 |
| 2014 | 16.2 | 3.6 | 1.2 | 0.20 |
| 2015 | 21.4 | 5.2 | 1.6 | 0.36 |
| 2016 | 26.9 | 6.2 | 1.8 | 0.43† |
| % change | +26 | +19 | +12 | +19 |
Ex-div: 12 Jan Payment: 31 Jan †Excludes special dividend of 0.41p a share | ||||
