Skillcast Group (SKL) H2 2024 (Pre-Recorded) earnings summary

Executive summary

• FY24 revenue rose 17% to £13.2m; ARR grew 25% to £11.6m, and EBITDA returned to profit at £0.5m versus a £0.6m loss in 2023.

• Subscription growth and slower overhead growth supported £2m free cash flow; year-end cash was £9.1m, and the proposed full-year dividend rose 16% to 0.517p per share.

Financial highlights

• Revenue rose 17% to £13.2m; SaaS subscription revenue increased 29% to £11m and represented 83% of revenue, versus 76% in 2023.

• Professional Services revenue fell 18% to £2.3m, reflecting lower demand for bespoke e-learning work.

• Gross margin increased to 73.6% from 69.7%; SaaS gross margin rose to 80.1% from 73.9%, while Professional Services gross margin fell to 41.7% from 56.5%.

• Overheads rose 9% to £9.5m, below revenue growth; headcount was 120 at year-end, up 2%.

• Free cash flow was £2m versus a £0.3m outflow in 2023; net cash reached £9.1m from £7.2m, with receivables at £3.1m.

Outlook and guidance

• Trading began 2025 in line with expectations; ARR exceeded £12.1m at 31 March, up more than 20% YoY, and 3% price increases effective 1 January were well received.

• Operational gearing is expected to support further profit and EBITDA margin growth; profitability is expected to be weighted toward H2 2025 due to H1 pay rises and rebrand marketing costs.

• Medium-term aims include subscription revenue growth in the 20% range and margins at a similar level, targeting the Rule of 40 through product innovation and efficiency initiatives.

• Aida, trialled with more than 87 clients, was planned for launch in 2025; Professional Services has limited forward visibility.