Revenues in line, EBITDA and cash exceed market expectations
Allocate Software (AIM: ALL), the leading provider of workforce and compliance optimisation solutions, today provides the following positive update on trading for its financial year ended 31 May 2014. The Company’s audited results will be announced on 21 July 2014.
Overview
Allocate delivered another strong performance with full year revenues in line and EBITDA and cash ahead of market expectations.
Healthcare – UK Healthcare bookings exceeded revenue, driven by Allocate Cloud demand
The Healthcare business, the Group’s main division and primary growth driver, produced another successful year and has continued to perform strongly. During the period, this division secured a significant number of contracts with both new customers and also for new products. Healthcare revenue has risen to 86% of Group revenue from 79% in 2013.
UK Healthcare bookings again exceeded revenue, driven principally by the accelerating deployment of the Allocate Cloud, which the Company launched in June 2013.
Adoption of Allocate Cloud has exceeded management’s expectation with the number of new customers secured in 2014 being significantly higher than that in the prior year. The adoption rate is high due to the reliability, ease of deployment, cost saving and security offered by the service. All Allocate Cloud customers secured in 2013 have either renewed their agreement or are in the process of doing so. This means that over one third of Allocate’s NHS HealthRoster customers are now operating on the Allocate Cloud.
HealthRoster, Allocate’s core application, has maintained its strong growth with the number of new HealthRoster customers secured by the Company consistent with each of the prior two years. The high win rates of previous years have been maintained, as has the previous years’ rate of competitive displacements. Additionally, the number of HealthRoster renewals significantly exceeded the number secured in the prior year with renewals continuing at the previously announced 100% rate.
The migration to HealthRoster V10 which was launched two years ago continues in line with management’s plans. The number of HealthRoster V10 customers that are now live on the platform represents approximately 33% of the HealthRoster installed base, the number contracted and in process is over 50%. HealthRoster V10 adoption is key to sales momentum and the Company now has the platform required to be able to cross-sell new product lines to its installed base of customers.
SafeCare All-the-Time, the Company’s new suite of applications which have been developed to support the drive within the NHS to improve the transparency of staffing levels, has been well received by customers and prospects. In 2014, some 15% of Allocate’s NHS customers contracted for the first product of the new suite to be offered. On 5 June 2014, the full suite was announced and has already generated significant interest from the customer base. SafeCare All-the-Time will be an important growth driver in the next few years.
Sales of Allocate’s Medics applications have progressed with the total number of new agreements secured slightly short of expectations due to a change in product mix; however these applications did achieve a high renewal rate of annual subscriptions.
As stated in the Company’s interim results on 20 January 2014, sales of the Patient Flow and Emergency department product lines have been slower than expected with decision making cycles being longer than originally anticipated. The year has shown strong levels of customer interest, but results have not met expectations.
The Company’s international Healthcare operations continue to grow and again delivered results that have met management’s expectations with both the Nordic and Australian regions achieving year-on-year growth.
As the Company enters the new financial year, the UK and Swedish Healthcare pipelines are strong, driven by high levels of customer engagement showing significant interest in our solutions.
Defence and Maritime- Long-term key customers continue to anchor strong position in sector
As stated in the Company’s interim results on 20 January 2014, licence revenues from Allocate’s defence and maritime divisions are harder to predict and no new customers were secured during the period. Notwithstanding, Allocate continues to maintain a strong position in the Defence and Maritime sector, with long-term key customers in the UK and Australia utilising its solutions and the Group’s solution capabilities remain strong. In 2014 the two divisions combined accounted for 14% of Group turnover.
Ian Bowles, Chief Executive Officer of Allocate commented
“2014 was another strong year for Allocate, underpinned by compelling levels of organic revenue growth and a significant increase in profits and margins. We have responded quickly to the evolving requirements of the NHS and during the year have designed, built and deployed the capability to provide the safe staffing reporting required of all NHS Trusts by NHS England and NICE. Our core offering, HealthRoster, has maintained its market leading position. We have secured the same number of new HealthRoster customers as in each of the last two years and continued to renew 100% of HealthRoster term licenses. We more than doubled the number of Cloud customers as well as the number of customers that are now live on the V10 platform.
“Allocate closes the financial year 2014 with high levels of customer engagement and we remain confident that we are well positioned to continue to meet their needs and deliver on the strategy that we have laid out.”
Allocate Software
Ian Bowles – Chief Executive Officer
Chris Gale – Chief Financial Officer
Martin Jeffries – Marketing Director
Tel: +44 (0) 20 7355 5555
Numis Securities
Nominated adviser – Simon Willis / Richard Thomas
Corporate Broking – James Black
Tel: +44 (0) 20 7260 1000
FTI Consulting
Matt Dixon / Chris Lane Tel: +44 (0) 20 3727 1000
About Allocate Software plc
Allocate Software plc is the leading workforce optimisation software applications provider for world-wide organisations with large, multi-skilled workforces. With a blue chip client base spanning the public and private sector, its key vertical markets include: Healthcare and Defence.
At the core of the business is Allocate’s workforce optimisation software, which organisations use to deploy the right people with the right skills, to the right place at the right time. Headquartered in London, Allocate provides services and support to its increasing international customer base through regional offices in the UK, Sweden, USA and Australia.
Allocate is quoted on the London Stock Exchange (AIM: ALL). For further information please visit www.allocatesoftware.com
