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DotDigital en route to omnichannel

The email marketing group achieved strong organic growth, and progressed its shift to omnichannel through M&A
February 27, 2018

DotDigital’s (DOTD) top-line momentum in the first half was buoyed by 17 per cent organic revenue growth to £17.5m. The group also pursued M&A opportunities to accelerate its shift from an email marketing platform to a “fully-fledged omnichannel offering”, including the November deal to acquire Comapi – a cloud communications specialist – for £10.7m.  

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Overall, international sales contributed 25 per cent of total sales, up from 22 per cent a year earlier. The European and Middle Eastern region grew at a double-digit rate, even with delays incurred by the forthcoming General Data Protection Regulation (GDPR). The group is helping customers to ensure GDPR compliance and expects normal spending to resume after more guidance from the regulator, although there are still concerns over the extension of some European customers’ sales cycles ahead of the launch of the EU’s data privacy laws in May.

Meanwhile, US revenues climbed an eye-catching 44 per cent to $3.3m (£2.36m), supported by successful partnerships with e-commerce platforms Magento and Shopify. The star performer, though, was dotDigital’s newest geography: Asia Pacific. Driven by sales in Australia, revenues here climbed 75 per cent, albeit from a low base, to A$0.9m (£0.5m).

Analysts at FinnCap forecast adjusted pre-tax profits of £10.1m and EPS of 3p for the year to June 2018 – up from £8.2m and 2.4p a year earlier.

DOTDIGITAL (DOTD)   
ORD PRICE:89pMARKET VALUE:£263m
TOUCH:88-90p12-MONTH HIGH:106pLOW: 65p
DIVIDEND YIELD:0.6%PE RATIO:35
NET ASSET VALUE:11p*NET CASH:£10.5m
Half-year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201615.04.31.2nil
201718.84.31.4nil
% change+25+2+9-
Ex-div:na   
Payment:na   
*Includes intangible assets of £17.2m, or 5.8p a share