Release Date: September 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Elixirr International PLC (ELXXF, Financial) reported a record half-year revenue of GBP53 million, representing a 28% absolute increase and 14% organic growth compared to the prior year.
- The company achieved an adjusted EBITDA of GBP15.1 million with a 29% margin, indicating strong profitability.
- Elixirr International PLC (ELXXF) was recognized for the first time on the World's Best Management Consulting Firms 2024 list by Forbes.
- Successful integration of acquisitions like Insigniam and rebranding of iOLAP to Elixirr Digital have enhanced the company's service offerings and market presence.
- The company reported a significant increase in free cash flow, achieving GBP7 million in H1 '24, doubling compared to H1 '23.
Negative Points
- The increase in UK corporation tax from 19% to 25% has resulted in a higher effective tax rate, impacting the adjusted diluted earnings per share growth.
- Despite strong revenue growth, the adjusted diluted earnings per share of 21.5p represented only a 16% increase compared to H1 '23, which is less than the profit before tax growth.
- The company's ambitious growth strategy to become a $1 billion company may face challenges in maintaining the same growth trajectory.
- There is a potential risk associated with the integration of acquisitions and ensuring consistent performance across the newly acquired entities.
- The company's focus on cyber security as a key future growth area may require significant investment and resources, which could impact short-term profitability.
Q & A Highlights
Q: Can you provide more details on the financial performance for the first half of 2024?
A: Graham Busby, Co-Founder, Chief Financial Officer, Executive Director: H1 '24 was a record half for Elixirr with half year revenues of GBP53 million, representing a 28% absolute increase and 14% organic growth compared to the prior year. Adjusted EBITDA was GBP15.1 million at a 29% margin, and adjusted diluted earnings per share increased by 16% to 21.5p. Free cash flow doubled to GBP7 million due to growth in EBITDA and improved working capital performance.
Q: How has the integration of Insigniam and iOLAP progressed?
A: Stephen Newton, Chief Executive Officer, Co-Founder, Executive Director: We have successfully integrated Insigniam into the Elixirr Group, seeing increased demand for their services. iOLAP has been rebranded to Elixirr Digital, further integrating and enhancing our digital capabilities.
Q: What are the key elements of Elixirr's growth strategy?
A: Stephen Newton, Chief Executive Officer, Co-Founder, Executive Director: Our growth strategy includes four pillars: stretching our partner team, promoting from within, hiring new partners, and growing through acquisitions. We have increased partner revenue targets and continue to see strong performance. Promoting from within remains vital, and we have made key hires, including a new General Counsel and a seasoned entrepreneur to drive new sales opportunities.
Q: Can you elaborate on the performance and future plans for the AI acquisition, Responsum?
A: Graham Busby, Co-Founder, Chief Financial Officer, Executive Director: Responsum has seen a significant uptick in client conversations. For example, a US telecoms leader used our AI solutions to increase sales prospecting productivity by 93% and reduce time to first contact by 90%, resulting in an 83% increase in revenue for AI-enabled reps in the following quarter.
Q: What is the outlook for the remainder of the financial year 2024?
A: Stephen Newton, Chief Executive Officer, Co-Founder, Executive Director: We remain confident in our outlook for FY '24, expecting revenue within the guidance range of GBP104 million to GBP110 million and maintaining a strong EBITDA margin of 27% to 29%. Our four-pillar growth strategy continues to deliver, and we aim to become a $1 billion company in the next few years.
Q: How has the equity incentive scheme impacted the company?
A: Stephen Newton, Chief Executive Officer, Co-Founder, Executive Director: The vesting of pre-IPO options has been a proud moment, bringing our equity incentive schemes to life and generating value for our team. We have controlled any dilution impact by using shares already purchased in the Employee Benefit Trust (EBT).
Q: What are the future growth areas for Elixirr?
A: Stephen Newton, Chief Executive Officer, Co-Founder, Executive Director: Cyber security is a key future growth area. We are exploring both organic and inorganic opportunities, including the recent hire of Joe Hubback, who brings extensive experience in cyber security and consulting.
Q: How has the acquisition of Insigniam impacted Elixirr's performance?
A: Graham Busby, Co-Founder, Chief Financial Officer, Executive Director: Insigniam has performed in line with high expectations, with significant increases in revenue and EBITDA margin. The integration has led to strong client relationships and several cross-selling opportunities.
Q: What steps are being taken to minimize share dilution while increasing earnings?
A: Graham Busby, Co-Founder, Chief Financial Officer, Executive Director: We focus on increasing the value of each share by minimizing dilution. This is achieved through controlled vesting schedules and using shares already purchased in the EBT.
Q: Can you provide an example of how Elixirr's AI solutions have benefited clients?
A: Graham Busby, Co-Founder, Chief Financial Officer, Executive Director: One example is a US telecoms leader that used our AI solutions to reduce the time for sales representatives to qualify and outreach prospects by 75%. This led to a 93% increase in sales prospecting productivity and an 83% increase in revenue for AI-enabled reps in the following quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
