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Blancco Technology sees 'strong' revenue growth in first half

By Josh White

Date: Tuesday 18 Feb 2020

Blancco Technology sees 'strong' revenue growth in first half

(Sharecast News) - Data erasure and mobile device diagnostics company Blancco Technology Group reported "strong" revenue growth of 19% in its interim results on Tuesday, to £17.4m, or 16% growth at constant exchange rates.

The AIM-traded firm said its enterprise revenue increased 28%, or 26% at constant currencies, to £6m for the six months ended 31 December, while mobile revenue was ahead 15% or 10% at constant exchange rates, to £5.8m, which was driven by the acquisition of Inhance Technology.

Its IT asset disposition revenue was 15% higher, or 13% at constant currencies, to £5.6m.

The company's adjusted operating margin improved to 14.3% from 11.6% year-on-year, while adjusted EBITDA rose 29% to £4.4m.

Diluted earnings per share were 106% higher year-on-year at 1.4p, while the company's gross debt cleared during the period post the July placing, as it swung to net cash of £5.4m from net debt of £2.3m.

Cash generation from operations was weaker in the first half, as the board had anticipated, due to acquisition-related costs and outflows from the newly-implemented employee bonus scheme, as adjusted operating cash flow fell 19% to £1.4m.

On the operational front, Blancco said the first phase of the ZroBlack innovation had been released, and led to a number of significant contract wins as new and existing customers moved to warehouse-based diagnostics and data erasure.

It said Inhance's operations had been fully integrated following the acquisition in July, while the company also achieved 'Advanced Technology Partner' status with Amazon Web Services, as its channel sales strategy progressed further.

The firm acquired minority interests in Blancco Japan and Blancco APAC, leaving the 20% holding of Aucnet in Blancco Japan as the only interest held in a group company by a third party.

Blancco was accredited with a Green Economy Mark by the London Stock Exchange during the half -year, and also continued its investment in research and development, with its intellectual property position strengthened further with five new patents filed in the period, primarily relating to its mobile product.

Looking at its current trading, Blancco said its revenue growth was continuing in line with market expectations for the 2020 financial year, with revenues from contracts won through ZroBlack innovation starting in the third quarter.

Blancco added that its enterprise operations continued to lead its segments for growth.

"We remain absolutely focused on our growth strategy, as demonstrated by these results with strong revenue and profit growth in all of our segments and in all of the geographies in which we operate," said chief executive officer Matt Jones.

"The acquisition of Inhance and IP relating to ZroBlack have been integrated quickly and to plan, with both attracting robust demand from both existing as well as new clients in the mobile sector."

Jones said Blancco continued to benefit from the "strong tailwinds" driven by regulation governing the ownership and retention of data, and from increasing awareness of the importance of environmental considerations in terms of enterprises recycling aging technology.

"The second half of the financial year has started with good momentum and in line with expectations.

"The board is confident that Blancco is well placed to deliver sustained levels of revenue growth going forwards."

At 1156 GMT, shares in Blancco Technology Group were up 9.28% at 206p.

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