Buying cloud communications business Comapi last November has facilitated dotDigital’s (DOTD) transition from an email marketing platform to an omnichannel group. Comapi brings conversational messaging to marketers across channels including Facebook messenger and mobile; that's particularly relevant as dotDigital looks to expand into the 'mobile first' Asian market.
Indeed, international diversification is integral to the group’s growth strategy. Within the broader Asia Pacific region, management is focusing on improving sales through partnerships and e-commerce integration; this could bear fruit in coming months.
Meanwhile, dotDigital is helping European customers to comply with the EU’s new data privacy rules – effective from May. Still, some have already lengthened their purchasing cycles ahead of GDPR – a trend to monitor once the regulation has been widely adopted.
At 89p, the shares trade on an expensive multiple of 30 times FinnCap’s forecast earnings for the year to June 2018. But EPS is expected to grow at a compound annual rate of 26 per cent between 2017 and 2019, which justifies the premium. Buy. HC
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