Transcript Slide 1

Interims 2011
AIM Admission
The story so far
The Board
Simon Bird – Technical
Director
Peter Simmonds – CEO &
Finance Director
Skip Fidura – Client Services
Director
Tink Taylor - Business
Development Director
Company Summary
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B2B Digital Marketing products and services
Established 1999
135 staff
3500+ Clients
Winner - National Business Awards –Best Growth Strategy
Offices in Croydon, London Bridge, Manchester, Northampton &
Minsk
The Digital Journey
Conversion
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Some of our Clients
Some of our Clients
Significant Achievements last 18
months
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AIM Admission announced
Increased sales & software engineering teams
Grew client base significantly
Implemented Microsoft Dynamics CRM
Implemented Sage 200
Implemented new IT infrastructure
Successfully launched dotCommerce
Successfully launched dotSEO
Acquired Netcallidus
Created SEO team in Belarus
Maintained the high energy entrepreneurial culture
Our people are key to the success
o Young team - average age is 26
o Highly empowered
o All staff become option holders
o Focus on goal alignment
o We aim to hire the best people
o We aim to keep our good people
Financial Highlights – 2009/10 Full
Year
2010/11 Interims
o Revenues increased by 48% (From £2,785k to £4,123k)
o Profits after tax increased by 48% (From £520k to £771k)
o Up 56% excluding IFRS2 charge relating to options of £38k
o Strong growth in customer numbers
o An expansion of products and services
o New Offices in Belarus & Scotland
o Earnings per share up 50%
5 Year Financial Summary
£m
12 Months to
June 2010
12 Months to
June 2009
Yr to 30 April
2008
Yr to 30 April
2007
Yr to 30 April
2006
Turnover
6.0
4.2
2.5
1.2
0.8
Admin Costs
4.6
3.3
1.7
0.9
0.5
PBT
1.4
0.9
0.75
0.3
0.3
PAT
1.14
0.77
0.57
0.23
0.23
Cash Flow Summary
Low dependence on largest clients
• Largest Client less than 5% of total revenue
• Top 20 clients less than 15% of total revenue
• Largest Debtor less than £40k
• Client base spread across many sectors
• 51% of dotMailer customers on direct debit with 14 payment terms
Google rankings drive enquiries
Keywords
Google
email marketing
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email marketing software
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email marketing templates
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email marketing services
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bulk email marketing
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email templates
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email marketing campaign
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email marketing company
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email marketing solution
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email marketing solutions
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email marketing uk
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email marketing service
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email marketing agency
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Google rankings
Keywords
Google
ecommerce solutions
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ecommerce solution
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bespoke ecommerce
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ecommerce business solutions
1
ecommerce web site solution
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Google Rankings
Keywords
Google
design agency
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web design agency
14
website design agency
2
Google rankings
Keywords
Google
seo agency
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search engine optimisation agency
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seo agency in london
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seo agencies
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website seo services
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Google Rankings
Keywords
Google
strategic search engine marketing
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search engine marketing company
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search engine marketing
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internet marketing company
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search engine marketing companies
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search engine marketing firm
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search engine marketing service
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seo marketing
14
internet marketing
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Focus on recurring revenues
o dotMailer monthly recurring revenue continues to grow strongly
o dotSEO/Netcallidus recurring revenue now increasing significantly
o dotCommerce recurring revenue starting to build
Interims - Impact of new products on
growth
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New products showing good growth
Email marketing continues to perform strongly
Managed service aids retention
Search marketing boosted by Netcallidus acquisition
Project revenues declining in absolute terms and as a percentage
Recurring revenues increasing as a percentage of total revenue
Further organic growth opportunities
o dotMailer V5
o Currently in Beta testing, full launch early 2011
- powerful new editor
- intuitive new step process
- powerful split testing
o dotSurvey
o new product Beta launch in Q1 2011
o Saas version dotCommerce
o target Beta late 2011
- features now built for “bespoke” version
- powerful new editor in development
Further organic growth opportunities
o Open new partner distribution channels through development of
connectors to CRM tools eg Microsoft Dynamics
o Appointment of International resellers
o Opening of further sales offices in UK and International
o Edinburgh office opened on Tuesday this week.
Acquisition Targets
The target sectors selected for potential acquisitions are:
o SEO
o Mobile
o Word of Mouth Marketing …….. “Social”
o Surveys
o Analytics
o Usability testing
o Research
Acquisition Criteria
The “ideal” criteria agreed for acquisition targets are as follows:
o High proportion of recurring revenues ideally minimum 40% of total
o No more than 10% of revenue from one client
o Strong technology with ownership of IP
o Not dependant on one (few) key person(s)
o Client base closely matches the dotMailer/Group client profiles
o Turnover £1m plus or potential to be £1m plus inside two years
o Total consideration ideally 3-7 PE ratio
o Deferred consideration to ensure goal alignment to dotDigital
shareholders
o Consideration LT 50% cash with the remainder payable in shares
Acquisition of Netcallidus
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SEO has been our main focus
In depth discussions & negotiations with four targets
Compared each business against our criteria
In addition to financial criteria we wanted cultural fit & a scalable
infrastructure
o Netcallidus ticked all those boxes
Netcallidus – financial overview of
deal
Seeking goal alignment
Earnings enhancing v dotDigital shareholders
Shared vision for growth
Deal structure
5 x PAT for y/e June 2010 = (5x£230k) £1.15m
(Cash £1m)
Deferred consideration
4X PAT for y/e June 2011 less £1.15 paid so far
3X PAT for y/e June 2012 less previous payments
Deferred consideration split 60% dotDigital Shares 40% cash
Our commitment to life as a plc
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Orderly Market - Continual matching of buyers with sellers of shares
Executive directors shareholding - 49%
Acquisition concluded using blend paper & cash
Commitment to first class corporate governance and reporting
procedures
o Annual accounts produced to AIM standard
o AIM admission process conducted smoothly
o AIM Admission document published 14th march 2011
In conclusion
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High growth profitable business in attractive market sectors
Cash generative
Significant opportunities for organic & adjacent growth
Opportunities for international expansion
Opportunities for acquisitions & joint ventures
2011 will be a year of further investment for future growth:
Investment in marketing
Investment in people
Investment in products