The London-listed software supplier to the flexible office sector said strong performance during the Covid-19 pandemic “proved the resilience and quality of the product”, as it ramps up investment in US and Asia-Pacific.
Founding CEO Mark Furness said essensys was positioned well for the upheaval in commercial property caused by the coronavirus, which will ultimately be a “net positive” for the business as companies become more agile and flexible space becomes more common.
In the year reported the split between revenue in the US and UK was 46:54. Furness was confident the gap would be eroded this financial year as the US overtakes the UK. The results for the year to the end of July saw recurring revenue in the US leap 45%.
Furness said essensys was “just getting started” and that a regional CEO for North America was in the process of being recruited.
The US market, Furness told PlaceTech, has 11bn sq ft of offices and between 10% and 30% of that will be flexible space, as opposed to that served by traditionally longer onerous leases, in the next decade and “we are right at the heart of that”.
In June, essensys launched STEP, a product wrap for its services pitched at landlords that need to cross the bridge from traditional models to flexible offerings. STEP has been “really well received”, with the first deals already contracted and expected to go live in the next six to 12 weeks.
Landlords have, said Furness, two options now – doing nothing is no longer considered an option – either do it themselves or partner.
Analyst N+1 Singer, in a report on essensys, said STEP was “ideally placed to support landlords in future-proofing commercial real estate footprint, exposing the group to an addressable opportunity worth £90m per annum in London alone, and many multiples of this across the US.”
With £8.5m in the bank, following a cash raise earlier this year, the company’s focus in 2021 will be investing in sales and marketing in the US and APAC. Product development will see the modules of its two main products, Connect and Operate, combined into one suite.
Furness said the business had “always been profitable” and will now look to “accelerate market share”.
Turnover rose 9% to £22.5m, including £19.4m of recurring revenue, during the period, producing a statutory profit of £300,000 and adjusted EBITDA of £4.2m.
Shares in essensys rose 5% by mid-afternoon on Tuesday to 145p, valuing the business at £72m.