Essensys: flex space operators resuming expansion plans
Following a period of rationalisation landlords and workspace operators have kickstarted their flexible office delivery growth, according to the listed global software supplier to the sector.
In a pre-close trading update to the London Stock Exchange for the financial year to August, Mark Furness, chief executive officer of essensys, said: “I am pleased to report good strategic progress against our long-term plan despite continued challenging conditions. It is clear that hybrid working arrangements are here to stay and that the structural drivers that are changing the commercial real estate industry – flexibility, digitalisation and sustainability are becoming ever more embedded; underpinning our long-term growth plans as the impact of the Covid-19 pandemic recedes.
“We continue to invest in our product pipeline, and we are seeing evidence that larger flexible workspace operators have resumed their expansion plans and traditional real estate operators are making positive steps to implement flexible workspace offerings following some rationalisation.
“Essensys plays a vital role in supporting real estate players to create seamless in-building experiences in their flexible operations by removing complexity and reducing costs through automation and simplification and we remain confident in the market and opportunity for the Group in FY23 and beyond.”
During the year essensys agreed the renewal of multi-year contracts with its largest customers in both the UK and the US, who are accelerating their own expansion plans, underpinning future revenue growth. The group has also won multiple new customers in the year and strategic engagements continue with a number of large global landlords.
Essensys’ operations in APAC and Europe have been established with new customer sites now live and the business has adopted a ‘capital light’ model to support its continued growth in new geographies which will reduce the capital required for that expansion.
Investment in product and people continues in line with business plan, both in the essensys platform which provides additional capability to customers, and in its smart access product, which enables a secure touchless digital building experience.
Revenue and adjusted EBITDA in FY22 are expected to be in line with consensus market expectations. As at year end the group had contracted new business which is expected to deliver £1.6m of annual recurring revenue once live. Looking ahead, the group said it has a healthy new business pipeline of opportunities.
The group ended the year with a strong cash balance of £24m, ahead of management’s expectations, which will support its strategic plans. The group remains debt free.
Shares rose 2.5p in early Wednesday trading to 63p, valuing the business at nearly £40m.