Markets have been volatile in recent months. And amid such uncertainty, highly rated companies – particularly those that are also acquisitive – face even greater pressure to keep investors happy. Any bad news, however minor, can trigger a considerable decline in the shares.
It wasn’t, thus, hugely surprising to see dotdigital’s (DOTD) shares dip 5 per cent following a broadly positive half-year trading update to December 2018. The reason? Comapi, the cloud communications business that dotdigital acquired in November 2017, saw a shortfall in revenues – the consequence of “challenging retail market conditions”. Comapi is the company’s lower-margin segment, meaning it had a dampening effect on overall adjusted cash profits.
That said, dotdigital’s core business outperformed – meaning profits were still in line with market expectations. Meanwhile, revenues rose 33 per cent to £24.9m. Organic revenues climbed 15 per cent to £20.1m. And, indicating continuing diversification, international revenues represented 30 per cent of sales (excluding Comapi) – up from a quarter.
