SmartSpace EBITDA loss widens as it focuses on recurring revenue

(Sharecast News) - Building and commercial space management software company SmartSpace Software reported a 64% improvement in recurring revenues in its final results on Monday, to £2.4m.
The AIM-traded firm said its full-year revenues from continuing operations fell to £4.6m for the year ended 31 January, from £5.1m a year earlier, with the board putting the decrease down to the Covid-19 lockdowns.

It said its exit annualised recurring revenue at year-end was 50% higher at £3m, while software-as-a-service (SaaS) revenue making up 49% of total revenue for the year, compared to 26% in the 2020 financial year.

Total gross profit was 28% higher than the prior year at £2.6m, as the company's gross margin improved to 57% from 41%, driven by the increase in high-margin SaaS revenues.

SmartSpace said its adjusted EBITDA loss, meanwhile, widened to £2.1m from £1.7m, although its loss per share from continuing operations improved to 7.54p from 8.05p.

Total lossed per share came in at 7.89p, narrowing from 41.7p a year earlier.

Cash and cash equivalents at year-end on 31 January came in at £4.5m, up from £2.6m on 31 January 2020.

"Whilst the ongoing pandemic continues to create uncertainty for the group, the board is optimistic for the group's prospects for the 2022 financial year and beyond," said chief executive officer Frank Beechinor.

"Covid-19 has changed working practices and many businesses have indicated plans to reduce their real estate.

"This will result in more people than available desks which, in turn, creates a significant opportunity for SmartSpace."

Beechinor said that as businesses reopened and staff returned to the office, its customers were turning their attention to preparing for returning to the office in a "controlled and Covid-19 secure" manner, which the company's products were "ideally poised" to assist with.

"Indeed, we have already received increased Space Connect orders for projects that had been delayed during the most recent lockdown.

"Our markets in Australia and New Zealand remain strong and the US has also held up well.

"In the UK, we have seen a noticeable increase in activity since the Government published its route map out of lockdown."

At 0906 BST, shares in SmartSpace Software were down 1.01% at 141.55p.