Newly-listed robotics firm raises guidance after solid start to 2017
Companies: Blue Prism Group Plc
Shares in Blue Prism jumped 11% in early trading on Wednesday after the Robotic Process Automation provider gave a bumper trading update for Q1, reporting that current full-year revenue will now be "materially" ahead of existing expectations after solid trading.
The Board said that positive trading momentum had continued into the new financial year, with the company securing 83 new software deals. 49 were new customers and 34 were upsells to existing customers.
Taking into consideration the above trading performance in the first quarter of the current financial year the Board now anticipates revenue for the full year will be materially ahead of existing market expectations.
Blue Prism shares are currently at c.£5 and have increased a staggering 337% in the past 12 months, giving a market cap of £307m. The share price clearly has strong momentum, and according to Northland Capital, Blue Prism needed to do better than the existing forecasts to warrant the current valuation, and it has.
Last week, Northland Capital said Blue Prism's revenue growth was being fueled by expansion into the United States, with the US going from 10% of revenues to c.30%, and the sales team there now bigger than in the UK.
"In 2016, revenues improved from £6.1m to £9.6m, while the underlying pre-tax loss jumped from £700,000 to £4.4m. That growth in revenues was even more impressive because the 2015 figure included a one-off licence worth £800,000. Total contracted revenues, stretching out over a number of years, are £35.2m."
Most of the new customers are coming from the partner network, which includes Accenture, Deloitte, IBM and specialist retailers.
Despite losses widening between 2015 and 16, Northland says Blue Prism has plenty of cash to cope with losses over the next two or three years, and as development costs are written off immediately, capital investment is minimal:
"The year started with £946,000 of monthly recurring revenues, which is equivalent to £11.4m annually, not that far away from the £14.1m of revenues forecast for 2017. That is an upgrade from the former forecast revenues of £13m, although the loss is unchanged at £8.1m because of the immediate expensing of sales commissions."
CEO Alastair Bathgate said he was pleased that the strong momentum achieved in 2016 was continuing in the new financial year:
"We have a strong pipeline and look forward to the remainder of 2017 with confidence."