Netcall shares dip 7% as costs outstrip revenue growth

Netcall shares dropped on Wednesday after the company’s six month results to 31 December showed a 78% decrease in profits compared to the same period the previous year.

The fall in profits to £181,000 came despite the software company’s revenues increasing by 32% to £10.7m over the period as cost of sales rose by 49% to £1.0m and administrative expenses jumped 40% to £9.1m, offsetting the sales gains.

Of the company’s revenues for the period, MatsSoft, which was acquired by Netcall in August, contributed £2.2m, driving organic revenue growth of 5%.

The year saw the release of Netcall’s Liberty 4 software, which is a new version of the company’s customer engagement platform, as well as its entry into the low-code software market through the acquisition of MatsSoft.

Henrik Bang, chief executive of Netcall, said: "The combination of our powerful low-code and Liberty customer engagement platforms creates a unique offering and significantly increases our addressable market."

The Liberty platform is a cloud-based software package intended to create smooth customer service interactions as communication switches between channels, while MATS's low-code allows businesses to implement applications and solutions with minimal coding knowledge.

2Our Liberty business continues its successful transition to the cloud, delivering good growth in revenues and profits and we enter the second half with a considerably increased sales pipeline and much excitement for the accelerated growth opportunity available," said Bang.

The company has experienced strong trading and received significant orders for low-code software from both new and existing customers in the months following 31 December, as well as continued demand for its Liberty platform.

As of 1526 GMT, Netcall’s shares were down 7.80% at 46.10p.