Big Technologies confident after strong first half

Big Technologies reported a 27% improvement in first-half revenue on Thursday, to £222.9m, following new contract wins and an increase in business from existing customers.

The AIM-traded firm said its monthly recurring revenue was £4.3m in the six months ended 30 June, which was 43% higher than it reported a year ago.

It said its gross margin was stable at 71.4% in the first half, versus 71.3% in the same period last year.

The board said its “scalable” software-as-a-service-like operating model meant that increases to labour, freight and manufacturing costs had been offset by the additional profit earned on incremental revenue.

Adjusted EBITDA margins rose to 60.1%, from 56.7% in the first half of last year, due to increased scale and “favourable” foreign exchange movements.

Big Technologies said its adjusted operating profit rose 36% to £12.1m year-on-year.

The company’s adjusted cash generated from operating activities totalled £11.3m, including an investment in working capital and long lead-time inventory to support future growth.

It described a “significant” net cash balance of £56.9m at period end on 30 June, which the board said provided support for the firm’s future growth objectives.

Looking ahead, Big Technologies said “active engagement” was continuing with a number of potential new customers, which were expected to contribute to revenue from 2023.

It noted a new contract win using its “periodic biometric detection device”, with first revenue expected in November this year.

Based on its current monthly recurring revenue, the board said it expected the group to deliver a full-year revenue of at least £48m, with an adjusted EBITDA margin higher than 58%, ahead of current market expectations.

It said its long-term customer relationships and focus on high levels of customer service allowed the board to remain confident in the longer-term prospects for growth.

“I am very pleased with our continued growth in revenue and profit during the first half of the financial year, which clearly illustrates the progress we are making against our strategic objectives,” said chief executive officer Sara Murray.

“The successful implementation of a significant national monitoring contract in New Zealand received positive feedback from the end customer and diversified our global footprint and enhanced our strong reputation in the criminal justice sector.”

Murray said that, against a backdrop of external challenges, the firm had continued to support new and existing customers with its technologies.

“Market drivers remain strong and we are confident of delivering further growth in the second half of 2022 and beyond.”

At 1112 BST, shares in Big Technologies were up 5.55% at 290.25p.

Reporting by Josh White at Sharecast.com.