- Cash down after acquisition
- flat margin
Aim traded Marketing Automation Group Dot Digital (DOTD) wants its customers to realize that artificial intelligence (AI) can help them build more effective campaigns. According to the interim report, the company spent the first half of 2024 strengthening its “AI capabilities, personalization, and omnichannel capabilities.”
The company's marketing intelligence engine, known as WinstonAI, now offers grammar checking and rewriting services. Meanwhile, the group has also added a number of new personalization options for multimedia messaging (MMS) campaigns. In layman's terms, all of these enhancements are aimed at tailoring digital advertising to consumers, thereby increasing their chances of selling products and services.
Of course, this was much easier during the pandemic, as many brick-and-mortar stores were closed and there was nothing to do but scroll through the internet. Now that your audience isn't hooked, your campaigns need to be even more engaging.
In the first half of FY24, DotDigital acquired personalization software provider Fresh Relevance to “accelerate” its customer experience and data platform (CXDP) proposition. Purchase “added advanced complementarity” […] By incorporating technology into our products, we enable early new business and cross-selling success,'' CEO Milan Patel said in a statement.
The group ended the period with £37m in cash on its balance sheet, down from nearly £50m last year. However, the total gross profit margin was almost flat at 79%. Management said there was a “short period of normalization of working capital balances” following the acquisition by Fresh Relevance, but the group still held sufficient cash for further acquisitions.
Ultimately, growth depends on continued expansion of digital marketing budgets, which is not guaranteed in the current macroeconomic environment. The company's stock trades at 22x annual forward P/E, so I'm content to wait a little longer. Owned.
Latest IC View: Hold, 86p, November 7, 2023
| Dot Digital (DOTD) | ||||
| Order price: | 99p | market price: | £304m | |
| touch: | 98-99p | Highest price in 12 months: | 108p | Low: 68p |
| Dividend yield: | 1.0% | PE ratio: | twenty five | |
| Net asset value: | 30p* | Net cash: | £35.4m | |
| From six months to December 31st | Turnover (million pounds) | Profit before tax (million pounds) | Earnings per share (p) | Dividend per share (p) |
| 2022 | 33.8 | 7.42 | 2.17 | 0.00 |
| 2023 | 38.7 | 7.38 | 1.99 | 0.00 |
| % change | +14 | -1 | -8 | – |
| Former department: | Na | |||
| payment: | Na | |||
| *Includes intangible assets of £59.4m or 19.3 year average | ||||
