Trading Update

25 August 2020

Proactis Holdings PLC

Trading Update

Proactis Holdings PLC, the business spend management solution provider, provides an update on trading for the financial year ended 31 July 2020.

Trading Update

The Group's performance was in line with board and market expectations for the year despite the emergence of the COVID-19 global pandemic during the period, demonstrating the resilience of the Group's business model.

New business deal intake for the year was at a record high as the Group secured a 29% increase in total contract value ("TCV") of £14.6m (2019: £11.3m). The Board maintains its expectation of increased levels of TCV over the coming years, with a growing pipeline and momentum building following the roll-out of the Group's new go-to-market strategy.

The Board expects to report revenues of £49.2m for the year and adjusted EBITDA of £11.8m.

Net bank debt as at 31 July 2020 was £37.1m (31 July 2019: £36.5m) with the year-end position impacted by the timing of settlement in certain accounts receivable balances as well as lower transaction volumes due to COVID-19 in the Group's outsourced services business. If volumes had been at the same level as prior period reporting dates, net debt would have been approximately £36.0m.

This encouraging performance has been achieved despite the impact of COVID-19 which has caused slower pipeline conversion of the Group's new supplier-paid solution, bePayd, with prospects temporarily shifting priorities. The Board remains encouraged by the levels of interest in this solution and anticipates progress in the near term.

Overall, the outlook for the new financial year remains encouraging, although the Board remains cautious given the macro-economic backdrop and associated risk across new business trends, project implementation deferrals, volume-based contracts and customer solvency. The Board looks forward to the next 12 months and is confident of delivering significant value with the business now well positioned and with a pipeline that is building.

Tim Sykes, CEO commented:

"We delivered an encouraging new business performance in the period against a challenging macro-economic backdrop, demonstrating the effectiveness of our strategy, the resilience of our business model and the ability of our teams to deliver despite a change in working practices.

"Moving forwards, we expect to make further progress in growing the rate of new business intake and we will continue to focus on retention and margin improvement to drive cash flow, whilst maintaining a measured level of investment to support our long-term growth ambitions.

"There can be no certainty about the impact that the pandemic will have on our markets. Demand has been marginally subdued through this period and sales processes have been more challenging because of competing priorities but the Group is well-positioned to continue to capitalise on the opportunities available to it. Accordingly, we expect to continue to make further progress and we remain confident in our ability to accelerate growth whilst further improving profitability and cash flow."

Financial expectations noted above are unaudited and are subject to the completion of year-end financial close and audit processes.

The information contained within this announcement is deemed to constitute inside information for the purposes of article 7 of the market abuse regulation (EU) no. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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Notes to Editors:

Proactis creates, sells and maintains software and services which enable organisations to streamline, control and monitor all indirect expenditure. Its solutions are used in approximately 1,100 buying organisations around the world from the commercial, public and not-for-profit sectors.