REG - essensys PLC - Trading Update

essensysAnnouncement

01/03/2022 07:16

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RNS Number : 1675D  essensys PLC  01 March 2022

 

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 EBITDA(1) 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 EBITDA(1 )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
 Alan Pepper, Chief Financial Officer & Chief Operating Officer

 Singer Capital Markets (Nominated Adviser and Joint Broker)             +44 (0)20 7496 3000
 Peter Steel / Harry Gooden / George Tzimas

 Berenberg (Joint Broker)                                                +44 (0)20 3207 7800
 Ben Wright / Mark Whitmore

 FTI Consulting
 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.

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