The Panoply’s trading update reveals the business entered FY 21E with a £15m order backlog and that the group expects to report a strong trading performance for Q1 21E, having recorded £9.5m of new contract wins since the start of the year. A further positive is confirmation of a $5.2m contract win with a global philanthropic organisation by the group’s FutureGov unit (included within the £9.5m total). Against an ongoing backdrop of COVID19 driven uncertainty, this is a very positive announcement in our view. Noting that c70% of group turnover is now generated by public sector clients, we continue to believe The Panoply is well-placed to weather the COVID-19 pandemic and we maintain estimates following the release.
£15m order backlog entering FY 21E: Today’s announcement reveals that the group entered FY 21E with a confirmed order backlog deliverable in the year, including annualised recurring revenue of £15m. The business therefore commenced FY 21E with strong visibility on c40% of our revenue forecast for the year.
Strong trading performance expected for Q1 21E: The group has secured over £9.5m of new contract wins since April 1st 2020, the majority of which will be delivered in the current financial year. The announcement heralds management’s expectation of a “strong performance” in Q1 21E, with (proforma) year-on-year organic growth and margins expected at pre-COVID 19 levels. The group also expects to deliver continued profitability and strong cash generation for the current quarter.
Material contract win for FutureGov: Within the £9.5m of new business secured over the past eight weeks, a highlight was a $5.2m contract win by the FutureGov unit (Digital services for public sector and healthcare verticals) with a large global philanthropic organisation. The deal will see FutureGov support the client’s teams across eight EU capital cities to improve key local government services.
Overall a very positive announcement: We believe the announcement contains a number of positive messages. The business entered the current financial year strongly, and is winning new business despite the ongoing COVID-19 pandemic. The Panoply is therefore growing, profitable and cash generative, with a good visibility on current full-year financial performance.