essensys board joins £7m equity raise
Directors of London-listed flexspace software provider essensys have pumped more than £1m into the business they floated last year to increase liquidity and flexibility.
The group raised £7m overnight through a share placing “to increase balance sheet liquidity and flexibility amidst the uncertainty…and provide funds to take advantage of longer-term opportunities once this situation stabilises.”
The shares were sold at 151p, a 4% discount to Wednesday night’s price, and the 4.6m extra shares placed increases the company’s share volume on the London Stock Exchange by 9%. Founding chief executive Mark Furness and other directors bought shares worth £1.1m as part of the placing. More than 600,000 shares were bought by Furness, with four other directors buying between 10,000 and 33,000 each. Furness takes his stake to 41%. He had offered the company a £1.3m loan if required, but this will now be removed as the share placing was successful. The flotation in May raised £14m for shareholders and the same amount for the company to clear debt and invest for growth.
The fresh cash call came on the same day as the group published its half-year unaudited results for the six months to the end of January. Revenue was up 19% to £11.4m and adjusted earnings before the costs of last year’s IPO were down 10% to £1.9m.
The company explained measures it had taken so far to limit the cash drain during the economic shutdown. Cost saving includes putting 20 of the group’s UK personnel on furlough leave, reducing working hours and pay for staff remaining in work across the group, director pay cuts and Furness waiving his salary for at least three months. The group has activated an option to reduce near term expenditure with its outsourced software development provider and any additional non-essential capital or operating expenditure has been paused, as has all recruitment.
Furness said: “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, and we continue to closely monitor developments to ensure we maintain operational resilience and protect long-term value.
“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.”
Shares in the business were unchanged at 157.5p, valuing it at £76m.