Netcall reports revenue gains but increased costs weigh on earnings
Netcall PLC on Wednesday hailed its ‘record pipeline’, as it upped its dividend and expressed optimism around digital automation demand in both the enterprise and public sector markets.
The Bedford, England-based customer engagement software provider reported £5.1 million in pretax profit for the financial year that ended June 30, down 20% from £6.3 million a year prior.
Revenue however improved 23% to £48.0 million from £39.1 million, as cloud services revenue advanced 48% to £29.3 million from £19.8 million. Netcall noted an acceleration in revenue as demand for its Liberty cloud platform ‘gained pace’, with organisations advancing automation and AI adoption.
The company added that recurring revenue improved to 80% of total revenue, up from 76%, and ‘enhancing revenue quality’.
The weaker earnings amid the stronger top line is owed to higher costs, as administrative expenses rose 25% to £34.9 million from £28.1 million.
Amortisation of acquired intangible assets doubled to £1.2 million from £581,000, and the company recorded a £819,000 loss under post-completion services and fair value adjustments, widening from £156,000.
Share-based payments also rose, up 43% at £929,000 from £651,000, and further hampering the bottom line.
Netcall lifted its final dividend by 5.6% to 0.94 pence from 0.89p. The company did not declare an interim dividend.
Shares in the company were 0.8% lower at 120.00 pence on Wednesday morning in London.
On current trading, Netcall said it has entered the new financial year with ‘strong momentum’ and a ‘record pipeline, with the business supported by increasing demand for digital automation and AI-enabled solutions across both the enterprise and public sector markets. It noted a contracted revenue order book of £79 million.
‘Revenue grew 23% to £48 million, driven by strong demand for our Liberty cloud platform and rising AI adoption across our customer base. Organisations are making an ongoing shift to automation and AI as they modernise operations, reduce complexity, and move from fragmented systems to unified platforms for customer engagement and workflow. Liberty is designed for this transformation and delivered another year of strong momentum,’ said Chief Executive James Ormondroyd.
‘We entered the new financial year with a record pipeline and a contracted revenue order book of £79 million, improving visibility. With the cloud investment programme complete, a strong balance sheet and clear momentum from expanding automation and cloud migrations, the group is well positioned to capitalise on the AI- and automation driven opportunities,’ Ormondroyd continued.
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