Digital transformation services provider The Panoply has reported FY 2019 results ahead of our forecasts. The group made strong operational progress during the year, delivering double-digit customer growth (+18% YoY) and increasing commercial traction in the public and not-for-profit verticals. With a £5.7m net cash position, the group's financial position remains strong and management commentary on the outlook is positive. We maintain adjusted earnings estimates and continue to believe The Panoply is strongly placed to capture growth opportunities in digital transformation
Pro-forma revenue of £22.1m (+42% YoY) and adjusted EBITDA of £3.5m (+30% YoY, 15.7% margin) were ahead of our respective £21.1m and £3.0m estimates. At £5.7m, the closing net cash position was £0.7m better than we had forecast.
The group demonstrated strong operational progress in a number of areas in our view. The customer base grew to 191, an 18% improvement on the previous year. Public Sector and not-for-profit customers were a key growth driver, with the Public Sector and healthcare vertical expected to contribute around 45% of group turnover post the recent FutureGov acquisition. Post-IPO, in addition to making three acquisitions, the group won several new collaborative projects, including the Food Standards Agency, Cancer Research UK and Young Epilepsy in the UK and BBL Digital in Norway. Revenue visibility also improved, with 68% of customers billed in FY 2018 being billed in FY 2019.
The group closed FY 2019 with a net cash position of £5.7m, 12% of the current market capitalisation. With the addition of a £5m three-year revolving credit facility signed post-year end, we believe the group's financial position remains robust and provides the group with a strong base to capitalise on its inherent growth potential.
The outlook statement highlights that FY 2020E has started strongly. The business pipeline is growing, and a number of contracts have already been won. The release also confirms the Board's confidence in meeting (unchanged) market expectations for the full-year. Profitability is expected to be weighted to the second half, reflecting investments made in new service areas and allowing for cost increases from the enlarged central function.