Netcall is still demonstrating strong performance, with double digit revenue growth for H1 (to December 31 2012) and H1 results that are “comfortably” in line with expectations. Even though it is slightly down on this time last year, the underlying growth figures indicate that this customer engagement software provider is building from a solid base and management is confident of a “successful outcome” to the year.
A 12% lift took revenue to £8.16m, of which 6% was organic. The overall revenue figure includes three months contribution from acquired public sector enterprise document management provider Serengeti Systems (see Netcall on acquisition trail, snares Serengeti). When you look under the covers, H1 revenue compares well with the year ago period when revenue was up 14% but only 2%-3% was organic (see here).
The company is moving forward on multiple dimensions. It is seeing momentum from new customers (private sector plus local authorities, housing associations and NHS Trusts where it is potentially coming up against the likes of Civica, which was one of the outcomes of the Serengeti acquisition), and additional sales to existing customers which was one of its goals. The refreshed product line up, including its expanded multi-channel interaction, business automation and workforce management solution and the launch of a major upgrade of its core platform that includes an embedded version of the Eden BPM suite, will also be helping move the business forward. And Serengeti is driving new and cross sales. It is also contributing to profits. PBT for the business as a whole was up 46% to £1.34m, with the operating margin up 3 percentage points to 90%.
There was one obvious omission in the H1 results. Although recurring revenue was highlighted (and was down slightly from 68% to 65% of total revenue), there was no direct reference to SaaS revenue which has previously been flat. Movement here would show that Netcall is proactively engaging with this essential new model.