Software firm confident on growth prospects after positive year
Software and IT business Castleton Technology said it expects to report revenue of not less than £26.3m and earnings of around £6.3m for its 2018/19 financial year, representing “continued good organic growth”.
In a trading update for the year to the end of March, the listed Sutton Coldfield-based firm, which supplies software and managed services to the public and not-for-profit sectors, said cash generation in the period was solid, resulting in operating cash conversion of not less than 95% of adjusted EBITDA, facilitating a continued reduction in the company’s net debt from the prior year.
In January, the company acquired Deeplake Digital in a £1.8m deal.
Deeplake Digital provides digital technology for landlord and tenant communication, specifically in the social housing sector, via SMS, e-mail and social media platforms using its own proprietary software.
Deeplake Digital has relationships with more than 90 housing associations, and the acquisition added 60 additional annual contracts with existing Castleton customers and 30 annual contracts with new customer names to Castleton.
Dean Dickinson, CEO of Castleton, said: “I am pleased with the progress Castleton has made over the past year, recording good organic growth in both revenues and profit, underpinned by continued solid cash generation.
“The group has achieved a number of key operational milestones, notably, the delivery of our integrated product suite for two customers, a significant contract win with Connect Housing Association for the fully integrated solution (Total Contract Value £1.3 million) and an additional managed services contract with DGHP for Unified Comms.
“The acquisitions of Deeplake Digital and our Indian development partner enhances our integrated offering and highlights our ability to develop new solutions.
“The market opportunity remains large and given the group’s established position serving the social housing sector and the cross-selling opportunities, the board continues to be optimistic about the group’s growth prospects.”
