Essensys Regulatory News (ESYS)

18 August 2020

essensys plc

("essensys" or the "Group")

Pre-Close Trading Update

Performance and growth in line with expectations

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 pre-close trading update for the financial year ended 31 July 2020.

Highlights

Revenue for the year was in line with market expectations at £22.4m, an increase of 9% (FY19: £20.6m). Recurring revenue increased by 18% to £19.3m (FY19: £16.3m) and represented 86% of revenue in the year (FY19: 79%).

Adjusted EBITDA1 is expected to be in line with market expectations.

The Group's US business continued to grow strongly with year-on-year recurring revenue increasing 43% to £8.0m from £5.6m in FY19.

Annual Recurring Revenue (ARR) run-rate as at 31 July 2020 was £19.7m, an increase of 14% on July 2019 (£17.3m).

Despite the challenges posed by the Covid-19 pandemic, the Group delivered 15 new Connect sites in the final quarter and closed the financial year with 419 live Connect sites, an increase of 17% year-on-year (358 as at 31 July 2019). The Group has an additional 26 new Connect sites contracted with the majority of these to be delivered in H1 FY21.

New product releases in the second half of the year have already started to generate new customer enquiries and contracted business. STEP, our proposition designed to help traditional office landlords provide more flexible tenant solutions and Smart Access, the Group's touchless access control solution, have both been very well received by our target audience with sales pipeline building strongly since their respective launches.

The Board is pleased with the continued progress made by the Group in FY20, demonstrating the resilience of its business model by delivering another year of profitable growth and expanding its customer base despite the significant challenges presented by the Covid-19 pandemic.

Net cash at year end was £8.4m and the Group remains debt free.

Outlook

The Board remains confident in the Group's future growth which is underpinned by long-term structural drivers, its high proportion of contracted recurring revenue and good pipeline visibility, notwithstanding the continued uncertainty resulting from the Covid-19 pandemic.

Mark Furness, CEO commented:

"Our performance in FY20 underlines the resilience of our business model and the long-term nature of our underlying growth drivers. This reflects two key factors; the continuation of supportive long-term industry trends, with the expansion of our customer base and new customer sites, and the accelerated migration of traditional real estate operators into the flexible workspace market.

Following our fundraise in April 2020 we have made good progress with delivery of the first phase of our international growth plan. This has resulted in the expansion of our US sales team to increase our reach into the traditional landlord and commercial real estate markets which has been further accelerated by the launch of STEP. Our growth trajectory remains clear and we expect to initiate the second phase of our plan, comprising the establishment of European and APAC operations, during the first half of FY21."

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.

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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.

Notes

1 Adjusted for share option charges