Filed Pursuant to Rule 424(b)(3)
Registration No. 333-229213
PROSPECTUS SUPPLEMENT NO. 2
TO PROSPECTUS DATED APRIL 2, 2019

AMERICAN DEPOSITARY SHARES

endavalogoa06.jpg


REPRESENTING CLASS A ORDINARY SHARES

This Prospectus Supplement No. 2 supplements the prospectus, dated April 2, 2019, relating to the resale, from time to time, of the American Depositary Shares, or ADSs, each representing one Class A Ordinary Share, being offered by the selling shareholders identified therein. This Prospectus Supplement No. 2 is not complete without, and may not be delivered or utilized except in connection with the prospectus, including any amendments or supplements thereto. If there is any inconsistency between the information in the prospectus and this Prospectus Supplement No. 2, you should rely on the information in this Prospectus Supplement No. 2.
 
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 13 of the prospectus to read about factors you should consider before purchasing any of our securities.

This Prospectus Supplement No. 2 is filed for the purpose of including in the prospectus the results of Endava plc for the three and nine months ended March 31, 2019 set forth below, which were also reported in a Current Report on Form 6-K, which was filed with the U.S. Securities and Exchange Commission on May 21, 2019.
 
Neither the U.S. Securities and Exchange Commission nor any state or other foreign securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

_______________________
 
The date of this Prospectus Supplement No. 2 is May 21, 2019.
 
 
 
 
 
 
 






INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT

ENDAVA ANNOUNCES THIRD QUARTER FISCAL YEAR 2019 RESULTS

Q3 FY2019
24.7% Year on Year Revenue Growth to £73.1 million
23.2% Revenue Growth at Constant Currency
IFRS diluted EPS £0.11 compared to £0.08 in the prior year comparative period
Adjusted diluted EPS £0.19 compared to £0.13 in the prior year comparative period

London, U.K. – Endava plc (NYSE: DAVA) ("Endava" or the "Company") a global provider of digital transformation, agile development and intelligent automation services, today announced results for the three months ended March 31, 2019, the third quarter of its 2019 fiscal year ("Q3 FY2019").

"Endava continues to deliver strong results and I am pleased with our performance. Our revenue for Q3 FY2019 was £73.1 million, an impressive increase of 24.7% Year on Year on a reported basis from £58.6 million in the same quarter in the prior year. We continue to expand in all of our geographies and industry verticals." said John Cotterell, Endava’s CEO.

FINANCIAL HIGHLIGHTS:

•
Revenue for Q3 FY2019 was £73.1 million, an increase of 24.7% compared to £58.6 million in the same period in the prior year.
•
Revenue growth rate at constant currency (a non-IFRS measure) was 23.2% for Q3 FY2019 compared to 39.6% in the same period in the prior year.
•
Profit before tax for Q3 FY2019 was £7.6 million compared to £5.5 million in the same period in the prior year, or 10.4% of revenue compared to 9.4% in the same period in the prior year.
•
Adjusted profit before tax (a non-IFRS measure) for Q3 FY2019 was £13.2 million compared to £8.5 million in the same period in the prior year, or 18.1% of revenue compared to 14.5% in the same period in the prior year.
•
Profit for the period was £6.3 million in Q3 FY2019, resulting in a diluted EPS of £0.11, compared to profit for the period of £4.2 million and diluted EPS of £0.08 in the same period in the prior year.
•
Adjusted profit for the period (a non-IFRS measure) was £10.6 million in Q3 FY2019, resulting in adjusted diluted EPS (a non-IFRS measure) of £0.19 compared to adjusted profit for the period of £6.9 million and adjusted diluted EPS of £0.13 in the same period in the prior year.
•
Net cash from operating activities was £12.6 million in Q3 FY2019 compared to £7.9 million in the same period in the prior year.
•
Free cash flow (a non-IFRS measure) was £11.4 million in Q3 FY2019 compared to £7.2 million in the same period in the prior year.




•
At March 31, 2019, Endava had cash and cash equivalents of £59.3 million, compared to £15.0 million at June 30, 2018. Net cash at March 31, 2019 was £59.3 million compared to net borrowing of £4.7 million at June 30, 2018.

OTHER METRICS:

•
Headcount reached 5,573 at March 31, 2019, with 5,012 average operational employees in Q3 FY2019, compared to a headcount of 4,700 at March 31, 2018 and 4,246 average operational employees in the third quarter of the prior year.
•
Number of clients with over £1 million in spend grew to 67 on a rolling twelve months basis at March 31, 2019 compared to 42 at March 31, 2018.
•
Top 10 clients accounted for 40% of revenue in Q3 FY2019, unchanged from the same period in the prior year.
•
By geographic region, 27% of revenue was generated in North America, 27% was generated in Europe and 46% was generated in the United Kingdom in Q3 FY2019. This compares to 25% in North America, 31% in Europe and 44% in the United Kingdom in the same period in the prior year.
•
By industry vertical, 53% of revenue was generated from Payments and Financial Services, 28% from TMT and 19% from Other. This compares to 54% Payments and Financial Services, 29% TMT and 17% Other in the same period in the prior year.







ABOUT ENDAVA PLC:
Endava is a leading next-generation technology services provider and helps accelerate disruption by delivering rapid evolution to enterprises. Using distributed enterprise agile at scale, Endava collaborates with its clients, seamlessly integrating with their teams, catalysing ideation and delivering robust solutions. Endava helps its clients become digital, experience-driven businesses by assisting them in their journey from idea generation to development and deployment of products, platforms and solutions. It services clients in the following industries: Payments and Financial Services, TMT, Consumer Products, Retail, Logistics and Healthcare. Endava had 5,573 employees as of March 31, 2019 located in offices in North America and Western Europe and delivery centres in Romania, Moldova, Bulgaria, Serbia, Macedonia, Argentina, Uruguay, Venezuela, and Colombia.
NON-IFRS FINANCIAL INFORMATION:
To supplement Endava’s Consolidated Statements of Comprehensive Income, Consolidated Balance Sheets and Consolidated Statements of Cash Flow presented in accordance with IFRS, the Company uses non-IFRS measures of certain components of financial performance. These measures include: revenue growth rate at constant currency, adjusted profit before tax, adjusted profit for the period, adjusted diluted EPS and free cash flow.

Revenue growth rate at constant currency is calculated by translating revenue from entities reporting in foreign currencies into British Pounds using the comparable foreign currency exchange rates from the prior period. For example, the average rates in effect for the fiscal quarter ended March 31, 2018 were used to convert revenue for the fiscal quarter ended March 31, 2019 and the revenue for the comparable prior period.
                                                                    
Adjusted profit before tax is defined as the Company’s profit before tax adjusted to exclude the impact of share-based compensation expense, amortisation of acquired intangible assets, realized and unrealized foreign currency exchange gains and losses, initial public offering expenses incurred, Sarbanes-Oxley compliance readiness expenses, fair value movement of contingent consideration, secondary offering expenses incurred and stamp duty on transfer of shares (all of which are non-cash other than realized foreign currency exchange gains and losses, initial public offering expenses, Sarbanes-Oxley compliance readiness expenses, secondary offering expenses incurred and stamp duty on transfer of shares). Adjusted PBT margin is adjusted profit before tax as a percentage of total revenue.





Adjusted profit for the period is defined as the Company's profit for the period adjusted to exclude the impact of share-based compensation expense, amortisation of acquired intangible assets, realized and unrealized foreign currency exchange gains and losses, initial public offering expenses incurred, Sarbanes-Oxley compliance readiness expenses, fair value movement of contingent consideration, secondary offering expenses incurred and stamp duty on transfer of shares (all of which are non-cash other than realized foreign currency exchange gains and losses, initial public offering expenses, Sarbanes-Oxley compliance readiness expenses, secondary offering expenses incurred and stamp duty on transfer of shares) together with the tax impact of these adjustments.

Adjusted diluted EPS is defined as the Company's profit for the period adjusted to exclude the impact of share-based compensation expense, amortisation of acquired intangible assets, realized and unrealized foreign currency exchange gains and losses, initial public offering expenses incurred, Sarbanes-Oxley compliance readiness expenses, fair value movement of contingent consideration, secondary offering expenses incurred and stamp duty on transfer of shares (all of which are non-cash other than realized foreign currency exchange gains and losses, initial public offering expenses, Sarbanes-Oxley compliance readiness expenses, secondary offering expenses incurred and stamp duty on transfer of shares), divided by weighted average number of shares outstanding - diluted.

Free cash flow is the Company’s net cash from/(used in) operating activities, plus grants received, less net purchases of non-current assets (tangible and intangible).

In order for Endava’s investors to be better able to compare its current period results with those of previous periods, the Company has shown a reconciliation of IFRS to non-IFRS financial measures. Management believes these measures help illustrate underlying trends in the Company's business and uses the measures to establish budgets and operational goals, communicated internally and externally, for managing the Company's business and evaluating its performance. Management also believes the presentation of its non-IFRS financial measures enhances an investor’s overall understanding of the Company’s historical financial performance. The presentation of the Company’s non-IFRS financial measures is not meant to be considered in isolation or as a substitute for the Company’s financial results prepared in accordance with IFRS, and its non-IFRS measures may be different from non-IFRS measures used by other companies.










CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
Nine Months Ended March 31
Three Months Ended March 31
 
2019
2018
2019
2018
 
£’000
£’000
£’000
£’000
REVENUE
211,312

156,140

73,064

58,598

Cost of sales
 
 
 
 
Direct cost of sales
(127,356)

(96,104)

(44,330)

(35,783)

Allocated cost of sales
(11,050
)
(9,281
)
(3,745
)
(3,235
)
Total cost of sales
(138,406
)
(105,385
)
(48,075
)
(39,018
)
GROSS PROFIT
72,906

50,755

24,989

19,580

Selling, general and administrative expenses
(48,609
)
(31,755
)
(17,601
)
(13,705
)
OPERATING PROFIT
24,297

19,000

7,388

5,875

Net finance (expense) / income
(4,644
)
(1,030
)
216

(370
)
PROFIT BEFORE TAX
19,653

17,970

7,604

5,505

Tax on profit on ordinary activities
(3,874)

(3,893)

(1,290)

(1,286)

PROFIT FOR THE PERIOD AND PROFIT ATTRIBUTABLE TO OWNERS OF THE PARENT
15,779

14,077

6,314

4,219

Other comprehensive income
 
 
 
 
Items that may be reclassified subsequently to profit or loss:
 
 
 
 
Exchange differences on translating foreign operations
(2,365)

(1,108)

(3,027)

(1,363)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO OWNERS OF THE PARENT
13,414

12,969

3,287

2,856

 
 
 
 
 
EARNINGS PER SHARE:
 
 
 
 
Weighted average number of shares outstanding - Basic
49,072,773

45,100,165

49,500,875

45,100,165

Weighted average number of shares outstanding - Diluted
54,648,204

50,050,447

54,912,822

51,142,347

Basic EPS (£)
0.32

0.31

0.13

0.09

Diluted EPS (£)
0.29

0.28

0.11

0.08














CONDENSED CONSOLIDATED BALANCE SHEETS
 
March 31, 2019
June 30, 2018
March 31, 2018
 
£’000
£’000
£’000
 
 
 
 
ASSETS - NON-CURRENT
 
 
 
Goodwill
41,197

41,062

39,267

Intangible assets
28,800

30,787

30,051

Property, plant and equipment
9,359

8,584

8,350

Deferred tax assets
4,731

2,488

926

TOTAL
84,087

82,921

78,594

ASSETS - CURRENT
 
 
 
Inventories
—

16

57

Trade and other receivables
63,041

52,352

50,190

Corporation tax receivable
649

677

—

Cash and cash equivalents
59,339

15,048

9,462

TOTAL
123,029

68,093

59,709

TOTAL ASSETS
207,116

151,014

138,303

LIABILITIES - CURRENT
 
 
 
Borrowings
29

19,744

23,612

Trade and other payables
43,983

40,243

32,843

Corporation tax payable
2,045

1,488

644

Contingent consideration
1,211

5,259

4,947

Deferred consideration
1,516

4,401

2,851

Other liabilities
248

—

—

TOTAL
49,032

71,135

64,897

LIABILITIES - NON CURRENT
 
 
 
Borrowings
1

20

34

Contingent consideration
—

7,251

6,751

Deferred consideration
—

—

1,238

Deferred tax liabilities
2,380

2,832

2,621

Other liabilities
67

277

267

TOTAL
2,448

10,380

10,911

EQUITY
 
 
 
Share capital
1,085

996

996

Share premium
16,451

2,678

2,678

Merger relief reserve
4,430

4,430

4,430

Retained earnings
133,219

59,260

52,959

Other reserves
2,692

4,410

3,707

Investment in own shares
(2,241
)
(2,275
)
(2,275
)
TOTAL
155,636

69,499

62,495

TOTAL LIABILITIES AND EQUITY
207,116

151,014

138,303









CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
     Nine Months Ended March 31
  Three Months Ended March 31
 
2019
2018
2019
2018
 
£’000
£’000
£’000
£’000
OPERATING ACTIVITIES
 
 
 
 
Profit for the period
15,779

14,077

6,314

4,219

Income tax charge
3,874

3,893

1,290

1,286

Non-cash adjustments
18,270

4,453

4,965

1,781

Tax paid
(3,641
)
(3,688
)
(730
)
(1,414
)
UK research and development credit received
1,278

1,854

1,278

—

Net changes in working capital
(11,271
)
(215
)
(493
)
2,074

Net cash from operating activities
24,289

20,374

12,624

7,946

 
 
 
 
 
INVESTING ACTIVITIES
 
 
 
 
Purchase of non-current assets (tangibles and intangibles)
(5,153
)
(3,680
)
(1,189
)
(919
)
Proceeds from disposal of non-current assets
33

2

8

8

Acquisition of business / subsidiaries (net of cash acquired)
(3,142
)
(25,423
)
(3,142
)
(8,031
)
Interest received
286

30

160

7

Net cash used in investing activities
(7,976
)
(29,071
)
(4,163
)
(8,935
)
 
 
 
 
 
FINANCING ACTIVITIES
 
 
 
 
Proceeds from borrowings
3,500

22,979

—

—

Repayment of borrowings
(23,538
)
(28,094
)
(12
)
(14,451
)
Interest paid
(280
)
(413
)
(58
)
(210
)
Grant received
1,784

147

—

147

Net proceeds from initial public offering
44,828

—

—

—

Issue of shares
85

—

85

—

Net cash from financing activities
26,379

(5,381
)
15

(14,514
)
Net change in cash and cash equivalents
42,692

(14,078
)
8,476

(15,503
)
 
 
 
 
 
Cash and cash equivalents at the beginning of the period
15,048

23,571

51,044

25,066

Exchange differences on cash and cash equivalents
1,599

(31
)
(181
)
(101
)
Cash and cash equivalents at the end of the period
59,339

9,462

59,339

9,462






RECONCILIATION OF ADJUSTED FINANCIAL MEASURES TO COMPARABLE IFRS FINANCIAL MEASURES

RECONCILIATION OF REVENUE GROWTH RATE AT CONSTANT CURRENCY TO REVENUE GROWTH RATE AS REPORTED UNDER IFRS:

 
Nine Months ended March 31
Three Months ended March 31
 
2019
2018
2019
2018
REVENUE GROWTH RATE AT CONSTANT CURRENCY
34.4
%
34.6
 %
23.2
%
39.6
 %
Foreign exchange rates impact
0.9
%
(0.4
%)
1.5
%
(3.0
%)
REVENUE GROWTH RATE AS REPORTED UNDER IFRS
35.3
%
34.2
 %
24.7
%
36.6
 %


RECONCILIATION OF ADJUSTED PROFIT BEFORE TAX AND ADJUSTED PROFIT FOR THE PERIOD:

 
Nine Months Ended March 31
Three Months Ended Mar 31
 
2019
2018
2019
2018
 
£’000
£’000
£’000
£’000
 
 
 
 
 
PROFIT BEFORE TAX
19,653

17,970

7,604

5,505

Adjustments:
 
 
 
 
Share-based compensation expense
8,690

1,026

3,680

306

Amortisation of acquired intangible assets
2,609

1,804

857

844

Foreign currency exchange (gains) losses, net
(1,262
)
545

(121
)
64

Initial public offering expenses incurred
1,055

2,472

—

1,787

Sarbanes-Oxley compliance readiness expenses incurred
1,227

—

529

—

Fair value movement of contingent consideration
5,805

—

—

—

Secondary offering expenses incurred
306

—

306

—

Stamp duty on transfer of shares
385

—

385

—

Total adjustments
18,815

5,847

5,636

3,001

ADJUSTED PROFIT BEFORE TAX
38,468

23,817

13,240

8,506

 
 
 
 
 
PROFIT FOR THE PERIOD
15,779

14,077

6,314

4,219

Adjustments:
 
 
 
 
Adjustments to profit before tax
18,815

5,847

5,636

3,001

Tax impact of adjustments
(3,661
)
(745
)
(1,312
)
(359
)
ADJUSTED PROFIT FOR THE PERIOD
30,933

19,179

10,638

6,861

 
 
 
 
 
Diluted EPS (£)
0.29

0.28

0.11

0.08

Adjusted diluted EPS (£)
0.57

0.38

0.19

0.13











RECONCILIATION OF NET CASH FROM OPERATING ACTIVITIES TO FREE CASH FLOW

 
Nine Months Ended March 31
Three Months Ended March 31
 
2019
2018
2019
2018
 
£’000
£’000
£’000
£’000
 
 
 
 
 
Net cash from operating activities
24,289

20,374

12,624

7,946

Adjustments:
 
 
 
 
Grant received
1,784

147

—

147

Net purchases of non-current assets (tangible and intangible)
(5,120
)
(3,678
)
(1,181
)
(911
)
Free cash flow
20,953

16,843

11,443

7,182


SUPPLEMENTARY INFORMATION

SHARE-BASED COMPENSATION EXPENSE
 
Nine Months Ended March 31
Three Months Ended March 31
 
2019
2018
2019
2018
 
£’000
£’000
£’000
£’000
 
 
 
 
 
Direct cost of sales
3,587

686

1,648

205

Selling, general and administrative expenses
5,103

340

2,032

101

Total
8,690

1,026

3,680

306


DEPRECIATION AND AMORTIZATION
 
Nine Months Ended March 31
Three Months Ended March 31
 
2019
2018
2019
2018
 
£’000
£’000
£’000
£’000
 
 
 
 
 
Direct cost of sales
2,870

2,371

1,011

821

Selling, general and administrative expenses
3,030

2,081

972

944

Total
5,900

4,452

1,983

1,765


















EMPLOYEES, TOP 10 CUSTOMERS and REVENUE SPLIT
Six Months Ended December 31
Nine Months Ended March 31
Three Months Ended March 31
 
2019
2018
2019
2018
 
 
 
 
 
Closing number of total employees
5,573

4,700

5,573

4,700

Average operational employees
4,821

3,829

5,012

4,246

 
 
 
 
 
Top 10 customers %
36
%
43
%
40
%
40
%
Number of clients with > £1m of revenue
(rolling 12 months)
67

42

67

42

 
 
 
 
 
Geographic split of revenue %
 
 
 
 
North America
27
%
19
%
27
%
25
%
Europe
28
%
35
%
27
%
31
%
UK
45
%
46
%
46
%
44
%
Industry vertical split of revenue %
 
 
 
 
Payments and Financial Services
53
%
58
%
53
%
54
%
TMT
27
%
28
%
28
%
29
%
Other
20
%
14
%
19
%
17
%