It is my pleasure to introduce this year’s preliminary results, the first since I took over as Chairman.
It is yet again hugely satisfying for the Board to present a year of strong, profitable and cash-generative growth for the Group.
The year has seen further development of our product offering, investment in sales and marketing and the completion of the acquisition of Archer Digital which joined the IMI family in September 2015.
IMImobile helps organisations to address the changing demands of consumers. Their customers increasingly expect communication via their preferred mobile channels, and we help companies to manage the complexity that this creates. We have been through another year of significant change in all markets and our software and solutions are vital to organisations looking to undertake any form of digital transformation. According to Gartner’s 2016 CEO survey 50% of CEOs expect digitalisation to transform their industries by 2020.
In the year to 31 March 2016 revenue grew by 26% to £62m and gross profit grew by 22% to £37m. It has been particularly satisfying to have achieved growth in all regions and business units of the Group during the year. We have continued to make controlled investment in product, and sales and marketing activities, which we expect to deliver further profitable growth in future years.
The acquisition of Archer Digital consolidates our position in Africa and provides a platform to develop our Enterprise business in the region. It offers access to key customer sectors beyond existing mobile operator clients to our portfolio of software products and solutions. The acquisition has bedded in well and the early signs are positive.
The acquisition of Textlocal in October 2014 has also continued to deliver against expectations with good growth in the core UK business and international expansion into the Indian market during the year.
The executive team continue to review potential acquisition targets and the Board is confident that the executive team have the requisite track record and experience in executing an acquisition growth strategy as opportunities arise.
Cash generation has been strong during the year, with cash generated from operations of more than £10m. The Group remains debt free, having settled the consideration for Archer Digital from existing resources.
Our balance sheet is strong with net cash of £15m, providing the Board with the flexibility to invest in the business as well as return capital to shareholders via on market purchases of IMImobile shares. Over the last six months there has been a lot of M&A activity in our sector and we believe that the landscape will continue to evolve in the next 12 months. We have, and will continue to, review acquisition opportunities to optimise value for shareholders but only if they deliver superior and sustainable long-term returns which are in keeping with our acquisition parameters.
In the absence of significant acquisition opportunities and in accordance with our own strict return parameters, the Board will review all the options available to it, including a return of capital, taking into account the financial resources of the Company, the Company’s share price and future funding requirements in order to provide the best possible returns for our shareholders.
Our strategy of creating intellectual property in software and mobile technologies which can be deployed in global markets is unchanged, and the executive and management teams continue to successfully execute against this. Our people are one of our greatest assets and I would like to thank the entire IMI team for their continued dedication and hard work, and to congratulate them on yet another successful year. The strategy relies on keeping and attracting talented executives and it is incumbent upon me to ensure we have the appropriate rewards and incentives in place for executives and employees to share in the success of the Company. This will be reviewed over the coming months.
In summary, our core product offering and associated services are better than ever and position the Group well for continued growth in all of the regions in which we operate.
I also would like to take this opportunity to thank Vish, founder of the Company, who has stepped aside as Chairman. He provided a true long-term vision for the management of the Company and I am grateful that Vish remains very much involved with IMImobile in the role of Non-Executive Director. As a result, we will continue to receive the benefit of his strategic and management guidance as and when necessary.