Peppermint Technology’s revenue is up by around 10% for the year ended June 2018, climbing from £5,613,390 to £6,196,664, driven primarily by an increase in recurring revenue.
Recurring revenue represents 80% of total revenue, up from 78% in the previous year, which reflects new customer wins and organic growth in the existing customer base.
The company made a loss of £1,888,481 after taxation – while the loss is fairly considerable, that figure represents an improvement on the figure of £2,114,526 in the 2017 fiscal year. However, its liabilities exceed its assets by £2,692,353 – an increase from last year’s figure of £2,413,699. Staff costs remain high but are down almost 5% to £4,115,718, which is around 66% of total revenue.
On 22 June 2018 the company issued £1.5m of deep discounted loan notes for cash of £1m to fund its expansion.
As part of the business review of the 2018 accounts and as we reported near the time, Peppermint observes that on 18 January 2019 the group secured a £7.9m strategic investment from Accel-KKR. The investment comprised venture debt (£5.5m) and shareholder loan stock (£2.4m) and the company repaid in full its existing euro denominated bank loan.
“The investment has considerably increased the cash available to the group,” Peppermint says in the review. “This will support management’s strategy of growth, further development of our Legal SaaS platform, scaling resources to deliver a brilliant customer experience and solidifying a market-leading position in the legal IT sector.”
Notably during the 2018 financial year, eight customers completed their implementation and go-live of Peppermint CX.
Speaking to Legal IT Insider about the results, Gary Young, Peppermint CEO, said: “Our cash position is really strong as a result of our recent strategic investment from existing investors and Accel-KKR and it gives us the capacity and firepower to continue to invest and accelerate some of the things we’re doing.
“Since I arrived, we’ve hired around a dozen people into strategic roles including Nicki Grundy (chief financial officer) and Tony Cox (chief sales officer). We have other new roles to announce soon.
“Alongside the dozen we’ve already hired, we’re recruiting into sales and marketing and have hired two new sales people. We shall look to hire one more.”
Young continued: “A number of new clients were brought on in the last financial year and we had a lot of project activity.”
Grundy told us: “The increase is really revenue driven, the improvement comes from bringing new clients on board and from organic growth.”
She added: “There won’t be any dividend paid: all the investment will be paid into the business and it will be used to drive future growth for Peppermint. We have changed some of our commercial offering and what we expect going forward is for FY19 to be relatively flat and in 2020 we’ll start to see a return on investment thanks to the changes we’re making.
“We’ve moved away from our old pricing model so that it builds revenue over a project as opposed to annually in advance – so phased in smaller instalments.”
Young said: “That is proving popular with larger clients with lots of legacy systems and multiple migrations,” adding, “Strategically we want our software to be easy to buy, easy to implement and easy to consume.”
While Young says the approach is still very much to sell Peppermint as a platform and “there seems to be a strong demand for that single platform play”, the CRM system is still available separately. “For those who are looking just to implement a new, modern CRM system, we have the opportunity of working with Microsoft and partnering with them to deliver that. We are seeing demand for both.”
Young says they are now seeing interest from larger firms than before, including a number of prospects in the UK top 50.
This article was first published in the April issue of the Orange Rag.