Last checked at 1 Mar 2022 07:00
1 March 2022
essensys plc
("essensys" or the "Group")
Trading Update for the six months ended 31 January 2022
- US recurring revenue growth continues, up 20%
- Resilient performance underpinned by customer demand
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, announces an unaudited trading update for the half year ended 31 January 2022 ("H1 FY22").
Group revenue performance was resilient, increasing by 3% to £10.9m. The US business continued to grow strongly with recurring revenue up 20% to £5.3m (H1 FY21: £4.4m).
Demand from existing and new customers continues to underpin future growth. During the first half, we added nine new customers, including a significant property company in Sweden that is expected to provide a long-term growth opportunity. We have seen good momentum for Connect sites in the US, offset however by the unexpected loss of a UK customer. The Group had 470 live Connect sites at the half year (FY21: 474); with a further 28 new sites contracted for delivery post half year end.
The Group's expansion and acceleration of its go-to-market activities has been delayed by continued COVID related uncertainty. This has also resulted in extended sales cycles leading to lower than anticipated sales bookings year to date. As a result, the Group's trading for FY22 is expected to be below current consensus market expectations.
For the half year period, Annual Recurring Revenue (ARR) run rate at £20.3m was slightly ahead of H1 FY21 (£19.9m) and adjusted EBITDA1 losses are expected to be slightly better than management expectations.
Net cash at half year end at £30.5m was significantly better than management expectations due to delayed deployment of funds and supports our continued ability to capture the long-term structural drivers in the flexible real estate market.
essensys continues to progress its plan to capture the global market opportunity in flexible workspaces, supported by the successful £33m fundraising in July 2021. Since the start of our financial year, we have appointed CEOs for Asia Pacific and UK & Europe, to support our long-term expansion. The APAC business is now fully operational with personnel in place in Singapore, Hong Kong and Australia. Investment in product development is progressing as planned.
Outlook
The Board remains confident in the Group's future growth which is underpinned by long-term structural drivers. Despite a delay in accelerated bookings growth due to the prolonged challenges caused by COVID, the pipeline for FY23 and FY24 is strong. The Group has seen pipeline opportunities continue to grow, particularly amongst large multi-site property organisations. Larger flexible operator customers are starting to expand once again. The Board now expects revenues for FY22 will not be less than £23.5m (FY21: £22m), with an adjusted EBITDA1 loss of not more than £7m.
Mark Furness, CEO commented:
"essensys has a resilient business model and we are well placed to deliver our long-term expansion plans. Our US business continues to grow strongly. Whilst COVID has undoubtedly had an impact on our recent sales performance, our pipeline for FY23 and FY24 remains strong, supported by positive market dynamics, existing customers returning to growth and exciting opportunities that are already underway. Our new product development activities are starting to deliver further new capabilities and we look forward to sharing more details in due course."
Notes
1 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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Singer Capital Markets (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 |
Ben Wright / Mark Whitmore |
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FTI Consulting |
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Jamie Ricketts / Eve Kirmatzis / Talia Jessener / Victoria Caton |
| +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.