In This Article:
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Revenue: Slightly down year-on-year, with stabilization noted in Brand Addition.
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EBITDA: Flat year-on-year, with high EBITDA margins of 47% in Facilisgroup.
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Gross Margin: Improved from 33% to 35% in Brand Addition.
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Cash Position: Strong cash generation with increased distributions to shareholders through dividends and share buybacks.
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Capital Expenditure: Peaked in 2023, decreasing in 2024 and expected to decrease further in 2025.
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Client Retention: 98% retention rate in Facilisgroup, with excellent client retention in Brand Addition.
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Partner Numbers: Approximately 240 partners in Facilisgroup, targeting a market of 1,600.
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Dividends: 100% increase in dividends compared to the previous year.
Release Date: September 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Pebble Group PLC (LSE:PEBB) has a strong cash position and is debt-free, which supports its financial stability.
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The company has a global footprint with established operations in North America, Europe, and Asia, enhancing its market reach.
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Facilisgroup, a key part of the business, has shown a 15% CAGR since listing, with high EBITDA margins of 47%.
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Brand Addition has demonstrated excellent client retention and improved gross margins, moving from 33% to 35%.
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The company has increased shareholder returns through dividends and share buybacks, reflecting its cash-generative nature.
Negative Points
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EBITDA has remained flat year-on-year, indicating limited growth in profitability.
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The company faced a tough second half in 2023, with some customers reducing their spending.
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Revenue has slightly decreased, attributed to challenging comparisons from the previous year.
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There is a noted slowdown in decision-making for new client acquisitions in Brand Addition.
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The company has experienced attrition in its Facilisgroup partners, although efforts are being made to improve partner quality.
Q & A Highlights
Q: You mentioned improving the quality of the customer pool for Facilisgroup. Has this changed what a good partner looks like and how you recruit them? Also, has there been any change in the supplier pool for driving preferred spend? Lastly, how far can you push the gross margin for Brand Addition? A: We have refined our partner profile, focusing on businesses with over $2 million in revenue to ensure they benefit from our technology and can afford it. This change doesn't affect our addressable market but should reduce attrition. For preferred spend, we incentivize partners through rebates and events to increase engagement. Regarding Brand Addition, we aim for a 33% gross margin, acknowledging the need to price sensibly with large companies.