Last checked at 18 Feb 2021 07:00
18 February 2021
essensys plc
("essensys" or the "Group")
Trading Update for the six months ended 31 January 2021
Strong US growth continues and UK performance resilient
essensys plc (AIM:ESYS), the leading global provider of mission critical software-as-a-service (SaaS) platforms and on-demand cloud services to the flexible workspace industry, is pleased to announce an unaudited trading update for the half year ended 31 January 2021.
The Group has delivered a robust performance in the first half of the year with revenue in line with management expectations at £10.6m. Despite the continued impact of Covid-19 the Group's US business continues to grow strongly with half year recurring revenue increasing 18% to £4.42m from £3.76m whilst the UK business continues to prove its resilience.
Connect site churn remains very low at 3% year to date. The Group closed the half year with 431 live Connect sites, a net increase of 8% year-on-year (400 as at 31 January 2020), and has an additional 38 new Connect sites contracted for delivery.
On a constant currency basis1, Group revenue was £10.8m (H1 FY20: £11.4m) with recurring revenue slightly ahead of the prior year at £9.8m (H1 FY20 £9.7m). New site openings continue to be impacted by the pandemic which resulted in an expected reduction in non-recurring revenues during the period. Marketplace revenues were also moderated as significantly reduced occupancy in customer sites led to reduced service utilisation.
Annual Recurring Revenue (ARR) run rate at £19.9m was slightly ahead of H1 FY20 (£19.7m) (on a constant currency basis). Adjusted EBITDA2 for the half year is expected to be in line with management expectations.
Net cash at half year end was in line with management expectations at £5.9m.
Throughout the period the Group has continued to increase its investment in go to market activities and product development to reflect the growing market opportunity. This is resulting in an increase in pipeline opportunities, particularly amongst more traditional property owners and operators who are increasingly providing flexible workspace solutions. During H1 FY21 the Group signed contracts with 18 new customers including a number of high value strategic accounts which are expected to provide significant long-term expansion opportunities. The Group's new integrated software platform is expected to be launched in March 2021, as planned.
Notwithstanding continued uncertainty around the short-term impact of Covid-19, the Group continues to expect current year financial performance to be in line with market estimates.
Mark Furness, CEO commented:
"In what has been a challenging year for the flexible workspace sector we are pleased to continue to deliver results in line with expectations. The strength of our US business, high levels of recurring revenue and very strong retention rates have underpinned our performance.
Despite the short-term effect of Covid-19, the longer-term impact will be increased adoption of flexible workspace solutions by companies of all sizes. We continue to see traditional landlords and commercial real estate companies accelerate the development of their own flexible workspace products and services, which we believe will be a key driver of our future growth.
The strength of our performance during the ongoing pandemic and the increasing market opportunity, allied to contracted new Connect sites, a healthy pipeline and new product development, provide us with confidence in the long-term opportunity for essensys."
Notes
1 Revenue translated into GBP using the average exchange rate for the comparative prior period
2 Adjusted for share option charges and exceptional costs
The information contained within this announcement is deemed to constitute inside information for the purposes of article 7 of the market abuse regulation (EU) no. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
For further information, please contact:
essensys plc |
| +44 (0)20 3102 5252 |
Mark Furness, Chief Executive Officer |
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Alan Pepper, Chief Financial Officer & Chief Operating Officer |
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N+1 Singer (Nominated Adviser and Joint Broker) |
| +44 (0)20 7496 3000 |
Peter Steel / Harry Gooden / George Tzimas |
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Berenberg (Joint Broker) |
| +44 (0)20 3207 7800 |
Richard Kauffer / Tejas Padalkar / Alix Mecklenburg-Solodkoff |
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FTI Consulting |
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Jamie Ricketts / Eve Kirmatzis / Debbie Oluwaseyi Sonaike / Talia Jessener |
| +44 (0)20 3727 1000 |
About essensys plc
essensys is the leading global provider of mission-critical SaaS platforms and on-demand cloud services to the high growth flexible workspace industry. essensys' software was specifically designed and developed to help solve the complex operational challenges faced by multi-site flexible workspace operators as they grow and scale their operations. The Group's technology allows operators to deliver a range of differentiated, flexible and customer-specific services to a broad base of tenants across multiple locations and helps operators to manage the cost, operational and technological challenges they typically encounter.
essensys' two SaaS platforms, Connect and Operate, address these complex operational challenges, and reduce costs by simplifying the day-to-day management of flexible workspaces and the provision of on-demand IT, technology and infrastructure services to tenants. essensys' platforms automate key tasks and processes and help flexible workspace providers deliver highly efficient, customer-centric workspace solutions and member experiences with enterprise class services.