LONDON (ShareCast) - (Sharecast News) - Secure payments company PCI-PAL reported a 74% improvement in revenue in its first half on Wednesday, to ?2m.
The AIM-traded firm said its gross margin improved to 67% from 51% year-on-year, adding that recurring revenues represented 85% of total revenue for the six month period ended 31 December.

It said new contract annual recurring licence sales totalled ?1.2m for the period, falling slightly from ?1.3m, while total annual recurring licence sales now stood at ?5.2m, reflecting a 53% increase year-on-year.

PCI-PAL reported a loss from operating activities of ?2.3m, narrowing from ?2.5m.

Cash stood at ?1.5m at period end, in line with the end of June, while net debt stood at ?0.02m, swinging from net cash of ?1.5m at the start of the period.

Deferred revenue was ?4m at period end, up from ?2.3m.

On the operational front, PCI-PAL said its recurring revenue model was proven, with record revenue growth year-on-year.

It reported a stand-out six month period for the North American business, signing 49% more annual recurring licence sales than the entire previous financial year in the region.

The company signed its second-largest contract in the United States in the half-year, with annual recurring licence sales of $0.57m, or ?0.43m.

A total of 82% of new sales contracts for the group were generated from channel partners, up from 75%, with customers live across all six of the global regional instances of the firm's platform across the Europe, Middle East and Africa, North America, and Australia and New Zealand geographies.

PCI-PAL won Partner of the Year for EMEA with Genesys AppFoundry, and announced new technology partnerships with Avaya and Cisco.

A new chairman was appointed with "significant" international technology industry experience, the board said.

Looking at its current trading, the company said the highlights since 31 December included the timing of large contract wins and delivery of contracts contributing to a delay in anticipated revenue against market expectations for the year.

A contract was won with a US subsidiary of a FTSE 100 company, displacing a competitor's legacy hardware solution.

It also announced further competitor displacement at a new reseller - a leading Genesys value added reseller in Ireland, which included the partnership's first signed customer deal.

A contract to provide PCI-PAL's 'Agent Assist' to an unnamed leading technical standards agency was also confirmed, while the company also launched PAI-PAL Digital, which it described as a secure payments offering for digital engagement channels including webchat, social media, SMS, email, and WhatsApp.

"I am pleased with the progress we have made in the first half of the financial year and can report continuing momentum in contracts being won as we enter the second half," said chief executive officer James Barham.

"We are now seeing the benefits of our software-as-a-service-based revenue model coming through, with revenue increasing significantly year-on-year.

"This revenue growth is underpinned by our growth in total annual recurring licence sales - a key growth metric illustrating the recurring nature of our revenue model."

Barham said that as a fast-growing, small technology company, PCI-PAL was facing challenges along the way - in particular around the timing of new deals being signed, and time to go live with new contracts.

"These timing delays will have an adverse impact on our revenue for the current financial year against market expectations which will have a consequential effect on our losses before tax which will be slightly higher than current market expectations.

"Given our pipeline and our continued optimism in delivering against this pipeline in the second half of the current financial year, we are confident that our total annual recurring licence sales at the year-end will put the company in a strong position as we enter the next financial year."

Barham added that PCI-PAL would continue our focus on scaling its capabilities across people, process, and technology as it executed against its strategic objectives and maintain the strong growth of the business.

"We will capitalise on the partnerships we have put in place, as well as our true-cloud platform, and our unique position as the only company in our space capable of delivering all of this globally."

At 1343 GMT, shares in PCI-PAL were down 18.92% at 33.65p.

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