essensys bullish about flex after ‘challenging’ six months

Flex office opportunities are growing “more rapidly than previously anticipated”, the workspace software provider has said in half-year results overshadowed by Covid.

London-listed essensys previously warned in a trading update that Covid uncertainty hit its expansion plans in the six months to January 2022.

While recurring revenue grew 18.2% to £5.2m in the period, it fell 13.5% to £4.5m in the UK. Total revenue rose 2.8% to £10.9m.

The full set of half-year results reveal that the decline in the UK was mainly due to a single flexible office provider – a longstanding essensys customer – going into administration, resulting in the loss of 27 sites that use its software.

But while acknowledging a “challenging” half year, CEO Mark Furness said the company is “increasingly optimistic” about long-term global opportunities.

He said: “We believe Covid-19 has fundamentally changed the way in which people work and the group’s technology is perfectly positioned to assist in this transition.”

Furness also said he expects essensys to catch up on delayed investment by full-year end.

Despite delays to its hiring plans, the company has appointed CEOs in Asia Pacific and the UK & Europe. A new CFO, Sarah Harvey, will join on 16 May, replacing Alan Pepper who will move into a full-time COO role.

Other highlights:

• The US overtook the UK as essensys’ largest market, and the company sees evidence of acceleration, with customers setting out “ambitious” expansion plans for the rest of the year
• European activity is also growing, underpinned by the signing of a “strategic customer” in Sweden, which has led to several others in the pipeline
• In an expansion of its smart access features, essensys is working on its first IoT product (“Hub & Halo”) that it is now trialling in several locations
• Concerns include the war in Ukraine – which is unlikely to affect the business directly but could have indirect consequences – and “general inflationary cost pressures”, which are keeping essensys’ investment plans under constant review

Furness said: “Whilst slower than anticipated, the expansion of our go to market capability continues and we expect to have caught up delayed investment by full year end. 

“If anything, we consider that our market opportunity is growing more rapidly than previously anticipated.  Whilst the first half of the year was more challenging than we expected the medium- to long-term outlook for the business remains very positive.