Mark Furness CEO essensys
Markets

essensys warns of slowdown despite strong US growth

Covid uncertainty has hit the flex office software provider’s expansion plans amid gains in the US market, the company reported in a half-year trading update.

Although the recurring revenue rose 20% in the US to £5.3m, essensys warned that its trading for the year is expected to be “below current consensus market expectations”.

Continued pandemic headwinds have delayed its expansion plans, causing longer sales cycles and leading to “lower than anticipated” sales bookings in the six months to 31 January.

However, total group revenue was up 3% to £10.9m, and the company added nine new customers in the period, including a major real estate company in Sweden.

Although essensys’ Connect product expanded in the US, it had an “unexpected loss” of a UK customer. The number of Connect sites fell slightly from 474 to 470, with 28 contracted for delivery after the half-year end.

The company’s board expects total revenue for 2022 to hit at least £23.5m – up from £22m in 2021.

Mark Furness, CEO of essensys, said the company is well-placed to deliver its long-term expansion plans.

He added: “Our US business continues to grow strongly. Whilst Covid has undoubtedly had an impact on our recent sales performance, our pipeline for FY23 and FY24 remain strong, supported by positive market dynamics, existing customers returning to growth and exciting opportunities that are already underway.”

essensys raised more than £30m last summer and has since appointed CEOs for both Asia Pacific and the UK and Europe.

The APAC business is now fully operational, with teams in Singapore, Hong Kong and Australia, while investment in product development is progressing as planned, essensys said.

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