INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024
The last six months have seen a strong performance across the business with the evolution of a clear strategy to capture a significant market opportunity. The Company has delivered double digit revenue growth across all areas of the business and notable EBITDA growth in excess of 30%.
Financial Highlights
- Revenue from Continuing Operations* up 14% to £21.0m (H1 2023: £18.4m), with growth across all areas
- Recurring revenue now 81% of total, up from 76% in H1 2023
- Adjusted EBITDA** from Continuing Operations* up 31% to £3.9m (H1 2023: £3.0m)
- Profit before tax from Continuing Operations* up 14% to £2.3m (H1 2023: £2.0m)
- Basic EPS of 5.4p (H1 2023: 4.5p)
- Recurring revenue continues to increase across the Group, providing high levels of visibility for the second half of FY24 and beyond:
- Insurance Annualised Premium Income ("API") increased by c.14% to £33.8m (H1 2023: £29.6m)
- Benefits Platform Annual Recurring Revenue ("ARR") increased c.15% to £6.3m (H1 2023: £5.5m)
- Pay & Reward ARR increased c.6% to £0.7m (H1 2023: £0.6m)
- £5.2m of cash generated from operations, with cash and deposits at 30 June 2024 of £23.1m (31 December 2023: £20.1m), and debt free
- Interim dividend increased by 11% to 6.5p (H1 2023: 5.85p), reflecting the Board's continued confidence in the Group's performance and prospects
*Continuing Operations excludes the results of Let's Connect, which was disposed of on 9 July 2024
**Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation of intangible assets, goodwill impairment, share-based payment expenses, corporate acquisition costs and restructuring costs; this definition remains unchanged from previous periods
Operational Highlights
- New annualised insurance sales up 21% to £6.9m (H1 2023: £5.8m), a result of improved productivity alongside the growth in the size of the field sales team
- Disposal of Let's Connect post the period-end has resulted in a simplified Group structure, enabling greater focus on core areas of the business
- Remaining business now has c.80% of recurring revenues and is no longer impacted by the seasonality of Let's Connect
- 36 new client wins in the period (H1 2023: 36)
- Year on year retention rates for insurance remained strong at over 80%
- 100% of Sage Employee Benefits clients and c.40% of the Hapi Enterprise client base migrated across to next generation Hapi 2.0 platform, with full migration anticipated by the end of the year
Post-Period Trading and Outlook
- Strong new insurance sales have continued at the start of H2 2024, with retention rates remaining robust
- Trading in Q3 2024 continues to be in line with management's expectations. This combined with the Group's growing proportion of recurring revenues underpins the Board's confidence in achieving market expectations for the full year
