Aim-listed Attraqt, a visual merchandising business which has worked on websites for business including Kate Spade, Screwfix and the Tate, has seen an eye-popping increase in revenues after making an attractive acquisition.
Attraqt bought competitor Fredhopper earlier this year for £25m, from software company SDL, and the effects of that deal were evident in the company's half-year results this morning.
For the six months ending in June, Attraqt managed to increase revenues by 224 per cent to £5.5m as recurring revenues lifted 194 per cent to £4.7m.
The business has not quite managed to reach profitability yet, as adjusted earnings before interest, tax, depreciation and amortisation (Ebtida) were negative £0.5m. However this did close the gap slightly from the £0.8m losses last year.
The group did manage to sign 13 new logos over the period, including Arc’teryx, Auchan, Brora, Hunter Boots, Specsavers, and The White Company. This brings the group's total to more than 230, and the average new contract value up from £38,000 to £54,000.
Why it's interesting
According to analysts at N+1 Singer, the results show the “transformational impact” of the Fredhopper deal.
“We are excited about the group’s opportunity to address the 56,000 online retailers it can target with its technology,” said analyst Tintin Stormont.
Since the end of the first half, Attraqt has also secured its second-largest ever logo win with an unnamed global sportswear manufacturer.
The business has invested to protect itself from potential clouds on the horizon, in the shape of consolidation in the e-commerce platform vendor space.
According to N+1, Attraqt's technology sits on top of e-commerce platforms and disruption in this space could potentially lead to “higher than normal churn”.
But Attraqt has mitigated by investing £0.5m in sales and account management resources.
What Attraqt said
“I am delighted to report that the integration of the Fredhopper business has been achieved whilst maintaining significant sales momentum. The group is already reaping the benefits of the increased scale and improved access to the enterprise retail market that this acquisition has brought,” said chief executive Andre Brown.
“The momentum has continued post period with the signing of the second largest logo in the group’s history, plus contracts across a variety of territories.
This momentum, underpinned by high recurring revenue and a strong pipeline for new business in the second half of the year, gives us confidence in the ongoing success of Attraqt for the remainder of 2017.