Organic growth accounts for more than 50% of the year-on-year increase with the other 40% being the contribution from the acquisition of Gap Consulting in the first quarter of FY2019.  Maintaining organic growth in excess of 50% per annum is our new norm and sets us apart from many of our competitors.

Deepening relationships and extending services with our valued customer base has been a driver of organic growth and will continue to drive further growth in the coming years.  This growth has been further boosted by continued investment in our sales and marketing team through FY2019 resulting in 40 new customer adds delivering a significant expansion of our customer base that is now diversified in both market vertical and geography across the UK.

In FY2019 we delivered more than 100% growth in professional services revenue, increasing the proportion from 70% of total revenue in FY2018 to almost 80% in FY2019.  Despite the market shift to subscription licencing, licence revenues increased by than 140% to almost £2.0m in FY2019.

Our final quarter run rate revenue of almost £15m, combined with our track record of organic growth above 50%, underpins our plan to deliver over £20m organic revenue in FY2020.

Delivering such strong revenue growth in the last 12 months while maintaining a gross margin in excess of 40% is testament to the ongoing improvement of our operational processes and increasing focus on delivery quality. Coupled with the continuing commitment of all our Incrementalists we maintained billable utilisation of almost 75% throughout the year.  The FY2019 increase in revenue volumes at such sustained margins translated into almost £2.4m of additional gross profit compared with FY2018.

Incremental’s growth will continue in FY2020 and beyond.  Continued reinvestment of the returns is key to ensuring our supporting organisational infrastructure is suitably strengthened to deliver our full ambition.  Two thirds (£1.6m) of the additional gross profit generated in FY2019 was reinvested in expanding our sales and marketing teams, strengthening other supporting functions and expanding our office portfolio across the UK.

Following the additional £1.6m investment in our overhead base in FY2019, our EBITDA for the year still increased by 80% from FY2018.  At £1.8m, our EBITDA margin of 15%, is consistent with our FY2018 performance and remains ahead of many of our competitors that return less than 10%.   Returning 15% EBITDA margins while delivering organic growth in excess of 50% and investing significantly for continued future scale continues to demonstrate the potential of our business.

Whilst scaling the business at pace places significant pressure on working capital and cash, for the second consecutive year Incremental has converted 75% of EBITDA into operating cash flow.  The cash generated from operations has been reinvested in the business in FY2019, with key components being £0.5m spent on the fit-out of offices in Inverurie and Glasgow and a net £0.6m of acquisition and refinance costs being met out of cash within the business.

Continuing to deliver our current organic growth will result in Incremental achieving revenues of more than £20m in FY2020, with EBITDA of more than £3m.  The potential to significantly exceed these FY2020 targets is achievable through further acquisitions in the coming year.