Cirata plc (CRTA) Earnings Call Transcript & Summary

Hello, and welcome to the Cirata Q3 Trading Update, and I'm joined by Ijoma, who will cover some of the financials as well. Really, what we outlined when we were appointed is that we need to build the foundations for growth. And we have been hard working establishing those foundations. But ultimately, our ambition remains unchanged to become market leader in the long term. In terms of some of the Q3 highlights, we're on track for where we thought we'd be in terms of the third quarter, and we're reaffirming the outlook for the second half of the year in terms of bookings and cash. And what I'd like to do in a couple of minutes is come back and give you an update of where we are on the turnaround work streams to ensure that we have the foundations in place for growth in FY '24. And with that, I'd like to hand over to Ijoma.

Thank you, Stephen. Hello, everyone. I'm going to walk you through our bookings performance in Q3 and then take you through our outlook for the rest of the year, and then move on to some thoughts on disclosures before handing back to Stephen to talk to you about business review. In Q3, as Stephen has already said, we closed the quarter with $1.7 million of bookings. Of this, 2/3 was in our Application Lifecycle Management business, and the 1/3 came in our Data Integration business. We closed 3 contracts, 2 of which we have already announced in Data Integration, and one was in professional services in our ALM business. Moving on to outlook. We are keeping our outlook unchanged for the year. By way of reminder, we're looking at $4.3 million to $6 million of bookings for H2 2023. And in terms of cash -- closing cash position at the end of December 2023, we're forecasting a range of between $16 million and $16.5 million. We can still see a path to the top end of that range. However, as we said before, our bookings tend to be lumpy, particularly for new bookings. We are focusing on getting the business to a much more predictable sales cycle. And we're doing that by growing the pipeline as well as broadening the pipeline. So overall, we are very encouraged by the quality of the pipeline. And in our view, the question is really around when rather than whether these deals are going to close. All right. Now moving on to our disclosures. As you would have seen in the last couple of months or so, we have been disclosing deals as we sign them. This was to provide a certain level of reassurance to the market and investors that customers had started reengaging with the business after the events of earlier this year. Moving forward, we are very committed to high levels of transparency when it comes to communicating with the market about business performance. So we will only announce material new customer wins and material renewals. We will also continue to provide quarterly updates by way of interim management statements. And for FY '24 outlook, we'll provide this with the issuance of our FY '23 results in early 2024. Thank you. Now I'll hand back to Stephen to walk you through business review.

Thanks, Ijoma. It's really helpful. In terms of business review, I think it's important to understand where we are on our progress, particularly around the turnaround plans, and that's what I'd like to highlight with a few slides. First of all, in terms of the Q3 actions, I think you'll get a sense of the velocity at which we're moving. We basically had our 100-day plan that was set out for the rest of the year, and we're tracking in terms of a monthly set of objectives and outcomes that we're seeking to achieve. Since the March 9 announcement, there's been a lot of changes in the company. Effectively, the Board has been refreshed; new management team, including myself, has been appointed; as you are aware now, the company has changed its name to Cirata; and today also, we made a lot of progress that we are sharing with investors around the turnaround plan. So I'm pretty pleased overall with the sense of velocity that we're establishing in the company and the forward progression as we put our plans in place for growth for the future. The first thing that we did was establish the platform for growth of the turnaround plan. And we've shared with you how we're fixing some of the key areas of the go-to-market like sales commission, sales training, territory allocation and also our engagement to ensure that we've got a scalable platform for growth in our sales and marketing functions. As we said before that with the March 9 announcement, effectively the company was put on the watchlist by some customers and partners and with the relisting of the company at the end of July and then obviously, in the summer period of August, it really has given us the month of September to fully reengage with our partners and customers. And that has happened. I'm pleased about the progress of that, and that's evidenced really in terms of some of the Q3 bookings and the early progress we made in Q4 when we announced HCSC and NatWest. And the final thing that's really important is to ensure that the execution improves significantly in the company, right across the board. And we've got plans in place to actually drive up the execution of the productivity and deliver really on the value creation strategies we set out to our investors. So overall, I think we're on track with our plans. There's no doubt about it that there's a lot to do. And we've got our arms around it, but we're building the foundations as we speak to assure that the company achieves growth in FY '24 and achieves its long-term ambition ultimately or becoming the market leader in our space.