Digital marketing technology and services provider Dotdigital (LON: DOTD) appears to be back on track in North America and product enhancements should help growth to continue.
In the year to June 2022, revenues grew by 8% to £62.8m, with a much improved second half performance in North America. Contracted recurring revenues are 10% higher at £49.6m, while total recurring revenues account for 94% of total revenues. Underlying operating profit was 6% ahead at £14.5m.
All three geographic regions grew their revenues last year. After a flat first half, North America grew by 3% year-on-year following the hiring of new management. EMEA growth was 8%, while APAC growth of 18% was much slower than in the past.
Average revenues per customer rose 17% to £1,461. Greater functionality is helping to add to this figure. An increasing proportion of revenues are coming from partners.
Net cash has increased to £43.9m. The dividend has been raised from 0.89p a share to 0.98p a share. That will not use much of the cash pile, so there is plenty left to finance further product development and acquisitions.
It may be difficult to find a suitable acquisition, but management would like to add to the functions Dotdigital can offer.
Further product launches, including the new CDXP customer experience platform, will enable organic growth to continue in the longer-term.
Momentum has continued into this year with revenues expected to grow to £67.5m, although pre-tax profit is only expected to be flat at £14.5m because of higher overheads.
The share price is 2.18% ahead at 84.4p, which is around one-third of the 2021 high, but it I still 20 times prospective earnings.
