9th Apr 2020 13:54
(Alliance News) - Essensys PLC on Thursday reported improved results for its first half as it also said it has raised GBP7 million to increase liquidity amid uncertainty caused by the Covid-19 health crisis.
The stock was trading 2.8% higher at 161.90 pence each on Thursday afternoon in London.
For the six months to the end of 2019, the company - which provides software-as-a-service platforms and cloud services to the flexible workspace industry - recorded revenue of GBP11.4 million, up 19% from GBP9.6 million a year before. Pretax loss narrowed to GBP100,000 from GBP400,000.
Recurring revenue was up 29% year-on-year at GBP9.7 million, making up 85% of Essensys' total revenue. The year prior, recurring revenue made up 78% of total revenue.
Essensys said growth in its first half was primary driven by performance in the US, adding that recurring revenue in the US grew by 52% with the US business now larger than the UK in terms of Connect site numbers. At the end of January, the number of Connect sites totalled 400. Operate revenue increased by 29% year-on-year to GBP900,000 from GBP700,000.
Connect and Operate are Essensys's two software-as-a-service platforms.
US revenue grew by 45% to GBP4.8 million, while UK revenue grew by 5% to 6.6 million.
The company highlighted continued progress in its expansion within North America and Europe, adding that it is currently developing new products and scaling up its UK-based research and development team.
Looking ahead, Essensys said that while it has secured contracts for 51 new Connect sites, the Covid-19 outbreak has resulted in some of the site openings being delayed. However, it said it has already delivered 15 of the sites since the end of January and expects to deliver an additional 20 before the end of July.
The company said it has implemented cash conservation measures and remains positive on its outlook.
"Our strong first half and performance since the period end puts essensys in good stead to withstand any disruption caused by the Covid-19 outbreak. Notwithstanding the current situation, our strong pipeline of activity, continued market penetration and the mission critical nature of our software and services to our customers' operations underpins the board's confidence in the long-term growth prospects for the group," said Chief Executive Mark Furness.
As at January, the company had cash of GBP1.7 million and an undrawn revolving credit facility of GBP1.0 million.
Separately, Essensys said it raised GBP7 million through the placing of 4.6 million shares at 151p each.
The placing price represents a discount of 4.1% to the Wednesday closing price of 157.5 pence.
The money will be used to increase liquidity and flexibility amid uncertainty caused by the Covid-19 pandemic and provide capital to take advantage of longer-term opportunities in future.
CEO Furness subscribed for 663,000 placing shares taking his stake in Essensys to 40%. His participation in the placing will result in the termination of the undrawn GBP1.3 million unsecured loan facility provided by him to the company.
Chief Financial Officer Alan Pepper and Non-Executive Chair Jon Lee subscribed for 33,112 shares each, taking their stakes to 1% and 0.1% respectively. Non-Executive Director Charles Butler subscribed for 13,245 shares, therefore taking his total stake to around 0.1%.
Following admission of the placing shares, Essensys will have 52.7 million shares in issue.
By Ife Taiwo; [email protected]
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