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Blue Prism's losses widen

The software company achieved strong top-line growth, but coronavirus led to delayed pipeline conversions and smaller deal sizes
Blue Prism's losses widen

Blue Prism’s (PRSM) shares pulled back sharply on news that half-year statutory losses had widened, even though operating expenses had narrowed as a proportion of revenue. The software group, which specialises in robotic process automation (RPA), said that its exit monthly recurring revenue (MRR) growth rate was adversely impacted by the coronavirus, with more cautious clients leading to delayed pipeline conversions. But its customers have stuck around: the group posted a net retention rate of 110 per cent, as it continued to push its upsells, which represented almost two-thirds of the growth in MRR.  

IC TIP: Hold at 1150p

The size of Blue Prism's client base also grew to 1,864 as at the end of April, an increase of around two-fifths on the previous half year. 

Management doubled its research and development spend in the period to £8m, although it remains significantly lower than the £56m spent on sales and marketing. Still, the group said that it had reduced its operating cash outflow compared with the second half of 2019, and plans to reach the cash break-even point in 2021. 

Broker Investec forecasts a normalised pre-tax loss of £61.7m and a loss per share of 61.3p for October 2020, compared with losses of £72.6m and 80.3p in FY2019. 

BLUE PRISM (PRSM)   
ORD PRICE:1,150pMARKET VALUE:£1.06bn
TOUCH:1,116-1,282p12-MONTH HIGH:1,880pLOW: 775p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:169p*NET CASH:£140.8m**
Half-year to 30 AprTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201940.4-34.4-48.7nil
202068.5-41.4-50.4nil
% change+70---
Ex-div:na   
Payment:na   
*Includes intangible assets of £63.6m  , or 69p a share **Includes short-term investments