AdvancedAdvT (ADVT) H1 2025 earnings summary

Executive summary

• Revenue from continuing operations rose 31% to £19.9m for the six months to 31 August 2024, with recurring revenue comprising 80% of the total.

• Adjusted EBITDA increased 8% to £4.0m, and pre-tax profit surged 147% to £8.3m, driven by operational improvements and contract renewals.

• Proforma revenue for the initial four acquired businesses grew 16.6% year-over-year, with adjusted EBITDA up 53.7%.

• Acquisition of Celaton, an AI-based process automation provider, for £4.8m in July 2024, contributed £0.6m revenue in two months.

• Cash position at 31 August 2024 was £83.3m, with a 9.8% stake in M&C Saatchi plc valued at £25.1m.

Financial highlights

• Gross profit increased to £12.9m from £9.1m compared to the previous six months.

• Adjusted operating cashflow was £4.7m, representing 117% cash conversion of adjusted EBITDA.

• Free cash flow from continuing activities was £6.0m, up from £4.4m in the prior period.

• Basic EPS rose to 5.89p from 2.36p, and profit after tax reached £7.9m, up from £3.1m.

• Net finance income was £1.9m, and a £4.26m fair value gain was recognized on the M&C Saatchi investment.

Outlook and guidance

• Current trading remains strong and aligned with strategic objectives, with continued growth anticipated.

• The company expects to leverage digital and cloud expertise, and recent inclusion on the G-Cloud14 framework is expected to support further growth.

• The Board is not recommending an interim dividend and will review dividend policy after significant capital deployment.