Half-year Results

Celebrus Technologies plc (AIM: CLBS, "the Group", "Celebrus"), the AIM-listed data solutions provider, announces its half year results for the six months to 30 September 2023 ("H1 FY24").

Financial highlights

• Annual recurring revenue ("ARR") increased to £17.4m (H1 FY23: £15.8m, FY23: £16.7m)*
• Total Revenue of £13.0m (H1 FY23: £8.1m, FY23: £21.4m)
• Software Revenue (excluding third-party hardware) up 18 % to £7.3m (H1 FY23: £6.2m, FY23: £19.1m)
• Gross profit margin of 37.4% (H1 FY23: 38.3%, FY23: 60.2%) due to a high proportion of low margin third party hardware.
• Adjusted profit before tax** of £0.2m (H1 FY23: loss of £1.3m, FY23: profit of £3.8 million), and statutory profit before tax of £0.3m (H1 FY23: loss of £1.1m, FY23: profit of £2.4m)
• Diluted adjusted EPS of 0.56p (H1 FY23: loss of 4.49p, FY23: earnings of 7.74p) and diluted basic EPS of 0.65p (H1 FY23: loss of 3.35p, FY23: earnings of 5.18p
• Cash position of £14.7m (H1 FY23: £26.2m: FY23: £17.1m) with no debt
• Interim dividend of 0.92p per share, up 4.5% (H1 FY23: 0.88p)

Operational highlights

• Changed the company name to Celebrus Technologies plc after the period end as part of the simplification of the business and to build more focus around our mission to improve the relationships between brands and consumers via better data.
• Release of version 9.8 of the Celebrus Platform which included Celebrus Digital Analytics (CDA) and a variety of AI/ML capabilities such as Bot Detection and the ability to bring a customer's data models into Celebrus. Other product developments include the launch of revamped workbooks for Tableau and PowerBI for our customers.
• Establishment of a Customer Success team in Europe and the US to bolster our ability to expand relationships with customers as we focus on direct sales in a "land and expand" model.
• Key wins during and after the period end include a new banking customer in the US that has signed up for both marketing and fraud use cases, an upsell and expansion of a Top 10 global bank for a further three years.

Outlook

• Solid progress in the first half and the high visibility of opportunities expected to close in the second half underpin the Board's confidence in both achieving full year market expectations*** and continuing to drive growth in ARR.

Bill Bruno, CEO of Celebrus, commented:

"Several key steps have been taken to further our strategy in the first half of the financial year. Not only have we delivered the expected results and continue to remain confident in our ability to meet market expectations for the full year, but we have continued to invest in Sales and Marketing and are seeing the positive effects in the form of building pipeline momentum. A key investment at the beginning of the year was in Customer Success, and we have now built a Sales and Marketing machine that can focus on winning and expanding those wins as we land them. We continue to focus on driving ARR and our ability to build scalable, single-tenant, cloud-based environments for our Celebrus customers."

* ARR (Annual Recurring Revenue) is the amount of revenue at a point in time that is expected to recur within the next twelve months.

** Adjusted profit before tax and EPS are calculated before amortisation of intangibles, one-off reorganisation costs, foreign exchange gains/(losses) and share based payment charges.

*** For the purpose of this announcement, the Group believes market consensus for FY24 to be revenue of £32.1m, and adjusted profit before tax of £5.4m.

Operational review

Strategy

The mission for our business is to improve the relationships between brands and consumers via better data. Better data, from our perspective, is compliant, complete, accurate, timely, and usable in real-time. To support that mission, we continue to structure the business around our ability to automate and build efficiencies to make room for investment in higher-value activities.

Our product focus, further emphasised by the change in name of the Company, is to make Celebrus a platform that can deliver upon our mission in both the Marketing/Advertising and Fraud worlds. Regardless of the use case, the software we deliver and the environments we build are focused on getting the right data to the right place at the right time so something of value can be actioned from that data. Relationships between brands and consumers on the marketing side will improve because the Celebrus data will allow for a better customer experience. On the Fraud side, the Celebrus data will be used to protect people's hard-earned money and investments.

Our strategy as a business continues to build on the simple concept of selling more software. We aim to do so in a manner that allows us to get customers up and running quickly with a high level of automated support for the deployment. As such, we continue to invest in Celebrus Cloud as our primary option for deployment for new customers. Our "land and expand" approach to selling has allowed us to simplify how we position the platform and paved the way for our investment in this prior period into launching a Customer Success division. By combining our direct sales team, partner sales team, and customer success team, we feel we have built the appropriate sales infrastructure to take this business to the next level.

Contract wins

ARR increased to £17.4m (H1 FY23: £15.8m, FY23: £16.7m). During the period, we had some key wins such as a new Banking customer that is utilising a Celebrus Cloud deployment for both the Marketing and Fraud use cases. This is our ideal setup for customers and aligns with our go-forward strategy. We also secured one of the deals that was previously due to close in the last financial year, which included a significant amount of hardware for an on-premise environment.

Since the period-end we have seen a contract renewal and upsell with a Top 10 global bank for an additional three years which also includes new features such as our CX Vault capabilities, digital identity enhancements, and workbooks for Tableau.

Pipeline visibility, measurement and management continues to improve as well as the automation of some of the actions of our sales and customer success teams. This level of visibility and analysis has enhanced our ability to manage the business effectively and make quick decisions.

Celebrus

We continue to innovate the Celebrus platform. In the period we launched version 9.8 of the platform, and 9.9 is on the horizon. As always, features included in the release will come from our team's ideas, customer asks, partner feedback, and general industry trends.

In this most recent release, we brought several new capabilities to the market that have been met with significant excitement in the field. Namely, Celebrus Digital Analytics (CDA) and Bot Detection.

CDA provides organisations with access to a single source of truth for digital data without data connectivity or activation gaps. It removes the need to rely on third-party platforms that use a shared environment and funnel data through outside environments, thereby posing regulatory risks.

Celebrus advanced Bot Detection combines signals, biometrics, adaptive machine learning, and comprehensive data models to recognise genuine human behaviour in real time. Capturing all user interactions across devices and channels creates a complete customer profile to distinguish between real user behaviour versus bot activity.

We will continue to innovate in the data activation side of the platform, while ensuring that our differentiators on the data capture and contextualisation side remain prominent in the market.

Partnerships

We have continued to go to market with technology partners such as Teradata, Pegasystems, Salesforce, Snowflake, Adobe, and others. However, the focus for the prior period and through this current financial year has been in building out our Solution Integrator (SI) partner network with new additions such as Merkle and CX Forward. SI partners provide us with scalability for our own services teams, but they also are trusted advisors for many of the customers they work with and can help provide the value-based business cases for onboarding Celebrus.

M&A

As a Board we have aligned on profiles for potential acquisition targets that could provide good bolt-on technology to the Celebrus platform. While there is nothing imminent, we are making this more of a focus. As we began to sell more directly to customers, we soon realised that there would be more we would want to deliver for customers in the world of data activation. We will continue to explore this prudently.

People

A company is only as good as its people, and we are very lucky to have the global team we have in place. We have invested a lot of time and effort in the past year and a half in getting the structure correct in the business, getting people into the right roles, and identifying the areas in which we need to make further investment.

We have enhanced our training and development to ensure we are supporting our people and leadership around the globe, and making the business truly scalable, while also still supporting a hybrid way of working in all our key markets.

We also continue to work on improving our communication and connectivity globally as we grow to ensure that the stories, the wins, and the learnings are being broadly shared to everyone in the company as needed.

As mentioned in our Final Results announcement, during the period we commenced a search for a new Chair of the board to succeed Peter Simmonds when, in line with good corporate governance, he steps down towards the end of this calendar year, having served as Chair for almost nine years. We will provide a further update on thisin due course.

Current Trading & Outlook

Year-to-date progress and the high visibility of opportunities expected to close in the second half underpin the Board's confidence in achieving full year market expectations and the continued growth in ARR.

Financial review

Revenue and Gross Margin

Total revenue for the period was £13.0 million (H1 FY23: £8.1 million) with a gross profit of £4.9 million (H1 FY23: £3.1 million).

License revenue increased to £2.5 million (H1 FY23: £1.0 million), but with the revenue mix having a high proportion of low margin third-party product revenues the gross margin was 37.4%, similar to the 38.3% in the first half of last year which also had a high proportion of such revenues.

Software revenue (Revenue excluding third party hardware) was up 17.7% to £7.3 million (H1 FY23: £6.2 million) reflecting the impact of customer upsell in the period. The gross margin on Software revenue was 56.4% (H1 FY23: 53.1%).

Annual Recurring Revenue

Annual recurring revenue increased during the period to £17.4 million (30 September 2022: £15.8 million, 31 March 2023: £16.7 million). The Board is confident of further growth in ARR in the second half as a result of the signing of new contracts currently under negotiation.

Administration expenses and Profit before Tax

Administration expenses increased to £4.9 million (H1 FY23: £4.3 million). Excluding items such as net foreign exchange differences and share-based payments, Operating expenses were £4.9 million (H1 FY23: £4.5 million). After holding Operating expenses flat in the prior full year as a result of investment into new systems and efficiencies from team restructurings, the increased expense reflects further ongoing investment into customer facing roles in the first half of FY24.

The Profit before tax was £0.2 million (H1 FY23: loss of £1.1 million), and the Adjusted Profit before tax was also £0.2 million (H1 FY23: loss of £1.3 million). The adjustments include a share-based payment charge of £0.3 million (H1 FY23: £0.5 million), and a foreign exchange gain of £0.5 million (H1 FY23: £0.8 million).

Balance Sheet, Cash and Interest income

Trade receivables at the period end were £13.9 million (H1 FY23: £1.8 million); the majority of these result from contract wins and invoicing towards the end of the period. In relation to certain of these contracts, especially those with a third-party hardware component, trade creditors were £5.3 million (H1 FY23: £0.2 million).

The Group has no overdue receivables of any significant size, and no bad debt losses have been recorded in the period.

The cash balance at the half year end was robust at £14.7 million, and the Group remains debt-free.

The group has a strong focus on maximising interest income from cash holdings and in the period earned interest income of £0.3 million (H1 FY23: £0.1 million).

Dividend

As a Group, Celebrus continually monitors the balance between delivering on a progressive dividend policy whilst at the same time balancing investment in the business for future growth.

During the period, the Group paid a final dividend of 2.15p per share.

For this current half year, the Board is pleased to declare an interim dividend of 0.92p per share, a 4.5% increase over the comparative period last year. This will be paid on 12 January 2024 to members on the register as at 8 December 2023. The shares will become ex-dividend on 7 December 2023.

Consolidated income statement

for the period ended 30 September 2023 (unaudited)

Earnings / (loss) per share from continuing operations attributable to the equity holders of the parent

Other comprehensive income:

Items that will not be reclassified to profit or loss

Consolidated statement of changes in equity attributable to Equity Holders of the Parent

for the period ended 30 September 2023 (unaudited)

Notes to the financial statements

Change of name of Company

On 17 November 2023, the Company changed its name from D4t4 Solutions plc to Celebrus Technologies plc. With the repositioning of the Company over the last two years to being predominantly a software business and recognising that the Celebrus platform will be the principal driver of future growth and shareholder value creation, the new name better reflects the substance of the Group's activities.

Basis of preparation

These consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the UK and on a historical basis, using the accounting policies which are consistent with those set out in the Group's annual report and accounts for the year ended 31 March 2023. The interim financial information for the six months to 30 September 2023, which complies with IAS 34 'Interim Financial Reporting', has been approved by the Board of Directors on 27 November 2023.

The unaudited interim financial information for the period ended 30 September 2023 does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the year ended 31 March 2023 are extracted from the statutory financial statements which have been filed with the Registrar of Companies and contain an unqualified audit report and did not contain statements under Section 498 to 502 of the Companies Act 2006.

Business and geographical segments

The Group operates as a single business with no separation into divisions or allocation or people or assets to a particular division or product group. The management team is responsible for all products with no individual having responsibility for a particular product or product group. This is consistent with the internal reporting for management purposes. Management does however monitor revenues by revenue type due to the differing margins of each revenue type.

The revenue analysis set out below is consistent with that provided to the Board of Directors.

The geographical revenue segment is determined by the domicile of the customer.

Administration expenses

An interim dividend of 0.92p per share will be paid on 12 January 2024 to Members on the Register as at 8 December 2023. The shares will become ex-dividend on 7 December 2023.

Investor presentation and Capital Markets Day

The investor presentation will be available on the company's investor website https://investors.celebrus.com/ later today.

Bill Bruno (CEO) will host a live presentation for the Group's Capital Markets Day via the Investor Meet Company platform on Thursday 30 November at 10.00am GMT.

Investors can sign up to Investor Meet Company for free and add to meet Celebrus via: