There are a few things that stand out from today’s first half results from robotic process automation (RPA) technology designer Blue Prism (PRSM:AIM). You can read more about RPA at the foot of this article, but back to today’s figures, revenue up 133% shows more impressive growth.
The company’s 209 new contracts is its biggest six month scoop of new business to date, while there is welcome evidence that both new customers are signing on, while the company is also successfully upselling to existing ones.
Today's results have got investors excited again after a spell of presumably profit taking in a relatively illiquid stock. 80%-odd of the shares are held by executives and institutions, while the Exchange Market Size (EMS) - how much stock market makers will guarantee trading - is just 100 shares.
The stock is up close on 5% at 805p.
Most impressive stat
But there is an even more impressive stat; £1.72m. That is the exit run rate of monthly recurring revenue, or in other words, how much income is already signed off on contracts each month going forward. Six months ago the exit run rate was £946,000, and six months earlier still it stood at £662,000. That's astonishing growth.
Annualised, today's £1.72m works out at £20.6m, although clearly not all of that will fall into this year.
81% of FY rev in bag, with six months to run
But some simple sums show that the company has already basically guaranteed 81% of the £20m of revenue it had been expected to deliver this year to 31 October 2017? with six months of the year still to run. That’s worked out by adding the four months of £1.72 run rate revs to the £9.3m earned in the first half, which comes out at £16.2m.
Investec has upped its full year estimate today from £20m to £21.5m, which looks comfortably doable. For context, Investec 2017 was anticipating just £14.1m this year in January. In full year 2018 Investec has just 22% revenue growth pencilled in still, to £26.3m.
That too looks well within Blue Prism’s reach. It looks to me that a busy spell of forecast upgrades (seven now since the firm’s March 2016 IPO) is far from over.
Automating the mundane - what is RPA
RPA software works by mimicking computer keyboard inputs a human would perform on an application user interface (UI) to perform routine rule-based clerical administration tasks. Not only does this improve input accuracy and speed, it also helps customer organisations reduce running costs by freeing the human workforce to concentrate on other valued-added tasks.
The key to Blue Prism rapid success is its extensive channel partner network of IT-based consultancies and infrastructure groups that resell the platform. Partners include many blue-chip global organisations such as Accenture, Deloitte, Capgemini, Hewlett Packard Enterprise and IBM.
