• | 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. |
• | 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. |
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 |
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 |
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 |
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 | % |
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 |
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 |
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 |
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 |
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 | % |