AdvancedAdvT (ADVT) H2 2024 earnings summary

Executive summary

• Revenue from continuing operations reached £21.1m for the eight months to 29 February 2024, with 77% recurring revenue and adjusted EBITDA of £4.4m, both ahead of expectations.

• Pre-tax profit from continuing operations was £5.2m, up from £1.4m in the prior 12 months; basic EPS rose to 5p from 1p.

• Cash at period end was £82.1m, following acquisitions and the sale of a non-core asset, Synaptic, for £3.7m, generating a £2.2m gain.

• Five businesses were acquired for £26.8m net, with four forming the core platform; Celaton, an AI-based automation platform, was acquired post-period for £4.8m.

• The group transferred its listing to AIM in January 2024 and continues to hold a 9.8% stake in M&C Saatchi plc.

Financial highlights

• Adjusted EBITDA from continuing operations was £4.4m, with a 97% cash conversion rate.

• Free cash flow from continuing activities was £4.5m.

• Net finance income was £2.3m; profit before tax from continuing operations was £5.2m.

• The M&C Saatchi stake increased in value by £2.6m to £20.8m.

• No dividend is recommended; policy to be reviewed after significant capital deployment.

Outlook and guidance

• The group is trading in line with Board expectations for the current financial year, with continued improvement in performance and new long-term contracts secured.

• Management expects further margin improvement as integration and optimisation of acquired businesses progresses.

• Substantial cash reserves and a disciplined M&A approach position the group for further synergistic acquisitions.