Interims 2011AIM Admission The story so far
The Board
Simon Bird – Technical Director
Peter Simmonds – CEO & Finance Director
Skip Fidura – Client Services Director
Tink Taylor - Business Development Director
Company Summary
o B2B Digital Marketing products and serviceso Established 1999o 135 staffo 3500+ Clientso Winner - National Business Awards –Best Growth Strategyo Offices in Croydon, London Bridge, Manchester,
Northampton & Minsk
4
The Digital Journey
Conversion
Some of our Clients
Some of our Clients
Significant Achievements last 18 months
o AIM Admission announcedo Increased sales & software engineering teamso Grew client base significantlyo Implemented Microsoft Dynamics CRMo Implemented Sage 200o Implemented new IT infrastructureo Successfully launched dotCommerceo Successfully launched dotSEOo Acquired Netcalliduso Created SEO team in Belaruso Maintained the high energy entrepreneurial culture
Our people are key to the success
o Young team - average age is 26
o Highly empoweredo All staff become option
holderso Focus on goal alignment o We aim to hire the best
peopleo We aim to keep our good
people
Financial Highlights – 2009/10 Full Year
2010/11 Interims
o Revenues increased by 48% (From £2,785k to £4,123k) o Profits after tax increased by 48% (From £520k to £771k) o Up 56% excluding IFRS2 charge relating to options of £38k
o Strong growth in customer numbers
o An expansion of products and services o New Offices in Belarus & Scotland
o Earnings per share up 50%
5 Year Financial Summary
£m 12 Months to June 2010
12 Months to June 2009
Yr to 30 April 2008
Yr to 30 April 2007
Yr to 30 April 2006
Turnover 6.0 4.2 2.5 1.2 0.8
Admin Costs 4.6 3.3 1.7 0.9 0.5
PBT 1.4 0.9 0.75 0.3 0.3
PAT 1.14 0.77 0.57 0.23 0.23
Cash Flow Summary
Low dependence on largest clients
• Largest Client less than 5% of total revenue• Top 20 clients less than 15% of total revenue• Largest Debtor less than £40k• Client base spread across many sectors • 51% of dotMailer customers on direct debit with 14
payment terms
Google rankings drive enquiries
Keywords Google
email marketing 1
email marketing software 1
email marketing templates 1
email marketing services 1
bulk email marketing 1
email templates 6
email marketing campaign 1
email marketing company 1
email marketing solution 1
email marketing solutions 2
email marketing uk 1
email marketing service 1
email marketing agency 4
Google rankings
Keywords Google
ecommerce solutions 1
ecommerce solution 2
bespoke ecommerce 1
ecommerce business solutions 1
ecommerce web site solution 5
Google Rankings
Keywords Google
design agency 20
web design agency 14
website design agency 2
Google rankings
Keywords Google
seo agency 4
search engine optimisation agency 5
seo agency in london 1
seo agencies 3
website seo services 6
Google Rankings
Keywords Google
strategic search engine marketing 2
search engine marketing company 4
search engine marketing 5
internet marketing company 6
search engine marketing companies 6
search engine marketing firm 8
search engine marketing service 9
seo marketing 14
internet marketing 15
Focus on recurring revenues
o dotMailer monthly recurring revenue continues to grow strongly
o dotSEO/Netcallidus recurring revenue now increasing significantly
o dotCommerce recurring revenue starting to build
Interims - Impact of new products on growth
o New products showing good growtho Email marketing continues to perform stronglyo Managed service aids retentiono Search marketing boosted by Netcallidus acquisitiono Project revenues declining in absolute terms and as a percentage o Recurring revenues increasing as a percentage of total revenue
Further organic growth opportunities
o dotMailer V5 o Currently in Beta testing, full launch early 2011
- powerful new editor- intuitive new step process- powerful split testing
o dotSurvey o new product Beta launch in Q1 2011
o Saas version dotCommerceo target Beta late 2011
- features now built for “bespoke” version- powerful new editor in development
Further organic growth opportunities
o Open new partner distribution channels through development of connectors to CRM tools eg Microsoft Dynamics
o Appointment of International resellers
o Opening of further sales offices in UK and Internationalo Edinburgh office opened on Tuesday this week.
Acquisition Targets
The target sectors selected for potential acquisitions are: o SEOo Mobileo Word of Mouth Marketing …….. “Social”o Surveyso Analyticso Usability testingo Research
Acquisition Criteria
The “ideal” criteria agreed for acquisition targets are as follows: o High proportion of recurring revenues ideally minimum 40%
of totalo No more than 10% of revenue from one cliento Strong technology with ownership of IPo Not dependant on one (few) key person(s)o Client base closely matches the dotMailer/Group client
profiles o Turnover £1m plus or potential to be £1m plus inside two
yearso Total consideration ideally 3-7 PE ratio o Deferred consideration to ensure goal alignment to
dotDigital shareholders o Consideration LT 50% cash with the remainder payable in
shares
Acquisition of Netcallidus
o SEO has been our main focuso In depth discussions & negotiations with four targets o Compared each business against our criteriao In addition to financial criteria we wanted cultural fit & a
scalable infrastructureo Netcallidus ticked all those boxes
Netcallidus – financial overview of deal
Seeking goal alignmentEarnings enhancing v dotDigital shareholders Shared vision for growth
Deal structure 5 x PAT for y/e June 2010 = (5x£230k) £1.15m
(Cash £1m)Deferred consideration
4X PAT for y/e June 2011 less £1.15 paid so far3X PAT for y/e June 2012 less previous payments
Deferred consideration split 60% dotDigital Shares 40% cash
Our commitment to life as a plc
o Orderly Market - Continual matching of buyers with sellers of shares
o Executive directors shareholding - 49%o Acquisition concluded using blend paper & casho Commitment to first class corporate governance and
reporting procedureso Annual accounts produced to AIM standardo AIM admission process conducted smoothly o AIM Admission document published 14th march 2011
In conclusion
o High growth profitable business in attractive market sectors
o Cash generativeo Significant opportunities for organic & adjacent growtho Opportunities for international expansiono Opportunities for acquisitions & joint ventures
2011 will be a year of further investment for future growth: Investment in marketing
Investment in peopleInvestment in products