10 September 2024
TPXimpact Holdings PLC
("TPX", or the "Group", or the "Company")
Trading Update
FY25 revenue growth now expected to be flat, reflecting current market conditions
FY25 Adjusted EBITDA target maintained at
TPXimpact Holdings PLC (AIM: TPX), the technology-enabled services company focused on people-powered digital transformation, provides a trading update in advance of the Company's Annual General Meeting ("AGM") on 26 September 2024.
Market conditions
The pipeline of new business opportunities in our core client sector of Central Government (65% of FY24 Group revenues) has remained strong despite the General Election in July. However, additional approvals processes introduced following the Chancellor's announcement on 29 July 2024 of a
Current trading
In the Preliminary FY24 results announcement on 9 July 2024, the Company indicated a stronger weighting than usual of both revenue and profit to the second half of the year due to the timing of the snap General Election on 4 July 2024 and the expected clarity this would bring to the second half of the year, whilst noting that the summer months were vulnerable to more subdued spending patterns in the post-General Election period. Actual results for the summer period have reflected this expectation, although the restrictions on spend imposed by Central Government are proving to be more prolonged and severe than management had previously anticipated. The Company now expects to report first half revenues down c.8-10% against last year, with a return to growth in the second half of the year.
New business won in the first two months of Q2 FY25 amounted to
Continuing our three-year strategy to simplify the business, and recognising the challenges of the current market environment, the Company has taken action to further improve its operational efficiency, primarily in relation to staff costs. On an annualised basis, these actions are expected to save well over
Outlook
Given these factors, the Company now expects to report flat revenue growth for FY25 (FY24 revenue:
With respect to FY26, the Board is maintaining its targets of like-for-like revenue growth of 10-15% and an Adjusted EBITDA margin of 10-12%. The Board remains confident that the Company is strongly positioned in its key markets, with significant opportunities in digital transformation and responsible AI.
Björn
"The July General Election promised stability in the second half of the year and we were encouraged by the alignment between our service offerings and the new Government's manifesto pledges. However, it has become increasingly evident that the current public sector focus on budget constraint and spending controls will persist until after the conclusion of the Government's Spending Review and Autumn budget statement on 30 October.
"Our response is to ensure the capabilities and services we offer, and our cost base, is correctly aligned with our revenue expectations and the execution of our 3-year strategy.
"Whilst this is a difficult time for our people, it is very important that we maintain a sustainable business model for all our stakeholders and continue to deliver positive impact for our clients whilst providing a supportive environment to our teams in line with our B-corp principles. As ever, I am grateful to the professionalism and dedication of all our people in these challenging times.
"The Board remains very confident that the services we offer, founded upon the breadth and depth of talent within our businesses, will continue to be an attractive and value-added proposition for our clients. Irrespective of the short-term market factors at play, we firmly believe that Digital Transformation will continue to be a major part of Central Government strategy, and public services more widely, for the foreseeable future."
This announcement contains inside information under the
- Ends -
Enquiries:
TPXimpact Holdings Bjorn Conway, CEO Steve Winters, CFO
Stifel Nicolaus Europe Limited (Nomad and Joint Broker) Fred Walsh Ben Good Sarah Wong
|
Via Alma Strategic
+44 (0) 207 710 7600 |
Dowgate Capital Limited (Joint Broker) James Serjeant Russell Cook
|
+44 (0) 203 903 7715 |
Alma Strategic Communications (Financial PR) Josh Royston Kieran Breheny |
tpx@almastrategic.com +44 (0) 203 405 0209
|
About TPXimpact
We believe in a world enriched by people-powered digital transformation. Working in collaboration with organisations, we're on a mission to accelerate positive change and build a future where people, places and the planet are supported to thrive.
Led by passionate people, TPXimpact works closely with its clients in agile, multidisciplinary teams; challenging assumptions, testing new approaches and building confidence and capabilities. Combining our rich heritage with expertise in human-centred design, data, experience and technology, we work to create sustainable solutions with the flexibility to learn, evolve and change.
The business is being increasingly recognised as a leading alternative digital transformation provider to the
More information is available at www.tpximpact.com.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.