The London Stock Exchange-listed global provider of software to the flexible workspace industry, is enjoying “rapidly expanding US business”, the firm said in a trading update for the half year ended 31 January 2020.
Group revenue for the half year was in line with management expectations at £11.4m, an increase of 19% (H1 FY19: £9.6m). Recurring revenue was £9.7m, a 29% increase year on year (H1 FY19: £7.5m), representing 85% of group revenue.
Annual recurring revenue run rate as at 31 January 2020 was £19.7m, an increase of 28% on January 2019 (£15.4m). Strong growth in the group’s US business continued with half-year recurring revenue increasing 52% to £3.8m from £2.5m in H1 FY19.
Mark Furness, CEO, commented: “I am pleased to report continued good progress across our business, with strong sales momentum and a rapidly expanding US business underpinning our long-term growth ambitions. This strong H1 performance, supported by the number of contracted new Connect sites currently in delivery and a healthy pipeline underpins the board’s confidence that full-year results will be in line with market expectations.”
The group closed the half year with 400 live Connect (one of its two main products) sites, an increase of 32% year-on-year (303 as at 31 January 2019). The Group currently has an additional 40 new Connect sites contracted for delivery.
Furness said adjusted EBITDA was anticipated to be in line with management expectations at approximately £1.8m (H1 FY19: £2.0m). Adjusted EBITDA for H1 FY20 was, as expected, lower than H1 FY19 (which was pre-IPO) due to the full year effect of the additional investment in sales and marketing, product development and the expansion of the US operations in the run up to the IPO and in the early part of H1 FY20.
Net cash at half year end was slightly ahead of management expectations at £1.7m.
The company’s share price rose 5p in early trading on Tuesday to a new high of 235p, valuing the business at £110m.