Sign up Australia
Proactive Investors - Run By Investors For Investors
Why invest in RDT?
Rosslyn Data Technologies PLC: THE INVESTMENT CASE

Rosslyn Data Technologies sounds confident note on outlook as it narrows full year losses

Rosslyn Data sees a strong chance of cash flow break-even and profitability in the current financial year
Rosslyn
INVESTMENT OVERVIEW: RDT The Big Picture
Rosslyn said its acquisition of Integritie will double the size of the business

Rosslyn Data Technologies PLC (LON:RDT) narrowed its full year loss and said it was confident about the year ahead after securing a broad pipeline of new business.

The provider of cloud-based data analytics platform RAPid reported a loss before tax of £0.4mln in the year ended 30 April 2017, compared to a £2.4mln loss the previous year, on tight cost controls.

Revenue dipped to £3.6mln from £3.9mln last year as the Brexit vote, US presidential election and difficult trading conditions for some of its partners led to a slowdown in the delivery of some larger contracts.

READ: Rosslyn bags three contracts worth £3.1mln

“Despite this we have been able to manage our cost base and we are now able to see a timeline when cash flow break-even and profitability occur; although we are not yet complete, we believe there is a strong chance of this occurring this new financial year,” said chairman John O’Hara in a statement.

Cash flows used in operating activities fell to £1.6mln from £2.8mln and the group ended the year with a net cash balance of £0.3mln, down from £1.9mln. But the company said it has adequate cash resources to take the group through to break-even and cash generation following a share placement in May.

Customer wins and strategic partnerships

During the period, the group attracted new customers, including a major logistics company and a global media brand.

Rosslyn, which began trading on London’s junior market AIM in April 2014, also agreed a strategic partnership with Dun & Bradstreet to provide self-service data and analytics to procurement professionals.

The direct sales operation achieved some notable contract wins in all regions including the UK, Continental Europe and the US. The average annual contract value has risen by more than 50% to between £50,000 and £77,000 since the group’s initial public offering.  

Another significant achievement for the group, the RAPid platform was recognised as one of the top cloud-based platform products by becoming a Microsoft Data Platform of the Year finalist in October.

Microsoft also recognised Rosslyn as a preferred partner, giving it a ‘co-sell recommended partner’ status.

WATCH: 'They add tremendous value to us' Rosslyn Data's Roger Bullen on Integritie acquisition

Rosslyn expects year of change as it expands with Integritie acquisition 

The current financial year is expected to be a “year of change” for the firm, the company said.

Rosslyn said its acquisition of Integritie, announced in May, will double the size of the business and deliver a number of new opportunities.

“Our partnership strategy continues to develop and is coming to fruition in the US; these partnerships have the potential to deliver the majority of our revenue over the coming years,” O’Hara said.

“This, alongside the strengthening traction within our direct sales, makes this an exciting year for us.”

Integritie’s speciality is analysing unstructured data and this will be an important add-on for Rosslyn, according to chief executive Roger Bullen.

“The customer base is complementary to our own and the acquisition will enable us to cross sell both structured and unstructured data services to an enlarged customer base.”

Another key attraction, Rosslyn said, is that it will reduce the reliance on large contracts with long sales cycles in its core data mining business, something that has led to uneven sales over the past three years.

The deal will generate a substantial increase in Rosslyn's recurring revenues, Bullen added, boosting the quality of earnings and reducing overall risk from the ‘reliance on the sale of cumbersome revenue items, the timing of which is always difficult to predict’.

Integritie made a loss of £2.4mln in 2015 on sales of £3mln.

Costs saving from merging the two companies are forecast at £0.8mln per year.

Integritie acquisition will complement the group's core products

The company’s core products are the RAPid Big Data platform, and RAPid Data Extract Studio (a new self-service tool).

Partnerships with the professional services firm PwC, the outsourcing specialist Genpact and Microsoft underline its credibility.

It has also won business from big blue-chip firms including Anglo American and Kingfisher, as well as an unnamed global manufacturer.

In April it underlined its appeal to big names with a data and analytics partnership with management information giant Dun & Bradstreet to help companies make sense of the welter of information stored within their business.

Demand for commercial information never greater

The company is borne of an era when IT teams are shrinking yet the demand for meaningful commercial information has never been greater.

This has led to a shift in data analysis with the departments, country offices and divisions of big firms carrying out their own number crunching rather than it being done centrally.

By extension, this means the process is being overseen by workers unfamiliar with the technology and coding needed to extract the data required of their particular part of the business.

Rosslyn has five interlocking technologies that make it easy for the lay user to do just that, and that is the core of the RAPid data analytics platform.

For example, one partner is using Rosslyn’s technology to deliver 11 client projects analysing more than £38bn (€50bn) of transactions. 

This growth of the size of the contracts and the expansion of the customer base is driving the higher annualised recurring revenue. 





Register here to be notified of future RDT Company articles
View full RDT profile View Profile

Rosslyn Data Technologies PLC Timeline

Related Articles

1504015163_Mirada.png
August 29 2017
“We are not expecting to stop here,” he told Proactive Investors. “The order pipeline is looking great. When I say great, I mean great.”
domain-names.jpg
August 25 2017
CentralNic has global ambitions and the purchase of a Slovakian top-level domain name business is the latest part of that growth plan
1507051266_SEB-slide-for-Proactive.jpg
October 04 2017
A blue-chip client base in Canada and a new JV designed to replicate that success in the US

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2017

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use