Essensys upbeat in first trading update since IPO
The cloud software used by flexible office operators announced its revenues have jumped by 25%, after listing on the London Stock Exchange earlier this year.
In the company’s pre-close trading update for the financial year ending 31 July 2019, the group revenue for the year was ahead of market expectations with £20.5m, compared to last years’ £16.4m.
Essensys shares are now trading at 175p after launching at 151p on 29 May. The business is valued at £78.9m.
- Recurring revenue was £15.8m, representing 77% of group revenue. Adjusted EBITDA is anticipated to be in line with market expectations at not less than £3.8m, compared to £3.2m last year.
- Annual Recurring Revenue, ARR, run-rate was £17.3m, an increase of 27% on July 2018 of £13.6m. This suggests £3.2m of group revenue has been new business
- The group closed the financial year with 358 live sites using Connect, Essensys’ coworking software. This is an increase of 38% year-on-year, with 260 sites live as of 31 July 2018. An additional 45 new Connect sites are contracted, with the majority of these to be delivered in the first half of 2020
- The group’s US business continues to grow with year-on-year recurring revenue increasing 67% to £5.5m from £3.3m in 2018
- Net cash at year end was £2.7m with the group now being debt free following its IPO in which Essensys raised £28m
In a UK rarity, Essensys was first listed in May 2019. The firm, established in 2006 by IT and telecoms expert Mark Furness, listed 38.5% of the business at £1.51 a share valuing it at £72.6m.
Mark Furness, CEO of Essensys commented: “2019 has been an important and exciting year for Essensys. We have a simple vision – to power the world’s largest community of tech driven flexible workspaces. This is supported by a clear strategy to land, expand and grow, and we see exciting opportunities ahead in the high growth flexible workspace industry.
“Our successful IPO in May gives us a strong platform to accelerate the execution of our plans and deliver on our vision. We are delighted to provide a strong first trading update and we look ahead with confidence based on excellent pipeline visibility and good early progress with our plans to broaden and deepen our customer base, extend our geographic reach and accelerate product development.”
Essensys is headquartered in London with offices in New York and Los Angeles and an offshore development centre in Hanoi, Vietnam.
Before listing, at end of July 2018, the company showed a turnover of £11.5m in the UK, producing a £302,000 profit. In the US, turnover was £4.5m and there was a £520,000 loss, however according to accounts during the year the North America business became profitable on a monthly recurring basis.