REG - Big Technologies PLC - Trading Statement

Big TechnologiesAnnouncement

19/01/2024 07:15

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RNS Number : 2821A  Big Technologies PLC  19 January 2024

19 January 2024

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

Big Technologies plc

("Big Technologies" or the "Company" and the "Group")

Trading Update

 

Big Technologies plc, the UK-based remote people monitoring technology
company, issues the following trading update ahead of the announcement
scheduled for 26 March 2024 of its full year results for the year ended 31
December 2023.

 

The Group has continued to perform in line with the board's expectations with
revenue for the year ended 31 December 2023 expected to be approximately £55
million (2022: £50.2 million) and adjusted EBITDA to be approximately £33
million (2022: £30.5 million). These results are in line with current market
expectations(1).

 

Outlook for 2024

 

Revenue from our contract to provide electronic monitoring services to one of
our larger customers, based in Colombia, is expected to end during the first
half of 2024. This contract has been subject to short term renewals since
September 2021. A number of recent new contract wins are expected to partially
offset the potential revenue loss from Colombia.

 

During the second half of 2023, we have significantly expanded our business
development efforts in the US market, the largest market in the world for
electronic monitoring and substance detection. We expect this investment to
accelerate sales growth in the medium term, but the additional costs are
expected to reduce operating profit margins in the US in 2024 until new sales
are realised.

 

As a result of these developments, we expect Group sales for 2024 to be at
least at the level achieved in 2022. More detailed guidance for 2024 will be
given at the time of our results in March when the outcome in Colombia is
known with greater certainty.

 

The Group continues to see opportunities to expand market share and scale-up
the business and is in the process of releasing its first innovative substance
detection technology to priority customers. We have enjoyed contract renewals
across the business and won a number of new customers in recent months which
will start to contribute revenues during 2024 and 2025. A return to growth is
expected for 2025 and beyond.

 

(1: The Company has compiled forecasts from four analysts with current market
forecasts for 2023 revenue to be in the range of £54.0 to £54.5m, with a
consensus of £54.3m, and for adjusted EBITDA to be in the range of £32.7m to
£32.8m, with a consensus of £32.7m.)

 

 

 

 

 

 

 

 

Sara Murray OBE, Chief Executive Officer, commented:

 

"In difficult market conditions, 2023 has seen the Group deliver a strong
performance with continued growth in sales, profits and our cash reserves. We
continue to invest in the business and in our market-leading suite of
monitoring products and expect to see growth in the coming years. We are
obviously disappointed with the outcome in Colombia, with a customer that we
have served well for a number of years. We see a pipeline of attractive
business opportunities around the globe and will continue to work diligently
to replace this revenue stream."

 

 

For further information please contact:

 

 Big Technologies                                               +44 (0) 19 2360 1910
 Sara Murray (Chief Executive Officer)

 Daren Morris (Chief Financial Officer)

 Zeus (Nominated Adviser and Sole Broker)                       +44 (0) 20 3829 5000
 Jamie Peel / Dan Bate / Kieran Russell  (Investment Banking)

 Benjamin Robertson (Equity Capital Markets)

 

About Big Technologies

Big Technologies is the parent company of Buddi, which was founded in 2005 by
its current CEO, Sara Murray, following an initial idea to create a GPS
device small enough for a child to carry. Today, Big Technologies is a proven
supplier of innovative and high-quality products and services to the remote
personal monitoring industry. Big Technologies provides products and services
under a number of brand and trading names, with 'Buddi' being the most
well-known and being used in respect of activities within the core criminal
justice market. Big Technologies (under the buddi brand) has created a
leading, integrated technology platform (including both hardware and software
solutions) for remote monitoring of individuals, providing state-of-the-art
Electronic Monitoring (EM) solutions on a SaaS-like, subscription basis.

 

Electronic Monitoring in the criminal justice sector involves utilising
location technologies to remotely monitor and manage people at all stages of
the criminal justice system. The Company's focus on the Criminal Justice
market in the immediate term has been demand-driven, with significant
opportunities created by a combination of favourable market tailwinds as
electronic location devices are increasingly recognised as alternatives to
imprisonment, and superior technological capability enabling the Company to
meet this demand effectively.

 

Big Technologies' criminal justice solution has been iteratively developed
over a 10-year period, utilising the knowledge of an experienced management
team listening to customers.  The solution consists of a proprietary software
platform with modular monitoring hardware, capable of being adapted to
multiple applications. The Company's criminal justice solution is principally
focussed around the "Buddi Smart Tag", an electronic monitoring hardware
device, and "Buddi Eagle", the in-house developed, cloud-based monitoring
software. Collectively, the hardware and the intelligent tools integrated into
Big Technologies' software enable real-time tracking of monitored individuals
with high levels of accuracy and reliability. Buddi evidences a substantial
reduction in false alerts when compared to competitor systems which, combined
with the reduction in subsequent investigations, can result in substantial
cost savings for customers.

 

In addition to the high levels of accuracy, the Buddi Smart Tag has several
key advantages over its competitors' devices. The tag is lighter, smaller, has
longer battery life and offers a simple, contact free and shorter installation
process, providing substantial staff cost savings for customers. This superior
product design, coupled with the intelligent monitoring software, typically
comes at a small price premium to competitor devices. However, the overall
effectiveness and reliability of the solution, combined with the substantial
cost savings delivered as a result of reduced monitoring costs, have helped
Big Technologies deliver strong revenue growth from both existing and new
customers. The Company leases its devices and software solutions to customers
typically based on daily or monthly rates.

 

 

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