AIM newcomer FreeAgent boosts revenue, widens losses

Cloud-based software-as-a-service accounting software provider FreeAgent Holdings announced its unaudited interim results for the six months to 30 September on Wednesday, with revenue up 36% to £3.6m.

The company reported gross profit up 38% to £3.0m, with an improved gross profit margin of 84% - up from 83% in the first half of last year.

It also claimed strong revenue visibility with annualised committed monthly recurring revenue up 35% at £7.7m.

FreeAgent made an overall net loss of £1.3m, widening from £0.4m, which its board said reflected the investment in customer acquisition, a share options expense of £0.5m, and unrealised losses on the USD loan facility of £0.2m.

“On 16 November, FreeAgent was admitted to the AIM market of the London Stock Exchange,” noted chief executive Ed Molyneux.

“This is a significant milestone for us, and an achievement which the board believes will be transformational for the group's future growth and prospects.”

Molyneux said the repayment of the loan facility with the placing proceeds and the new investment from the IPO significantly strengthened the firm’s balance sheet and provided it with the opportunity to further invest in customer acquisition activities and product development to enhance the product offering.

“As a newly-listed public company, we are especially pleased to report strong performance in our first set of interim results.

“The 36% growth in revenue maintains our FY15 and FY16 growth rates, and at the same time we have also improved gross margins,” he explained.

“The second half has started positively and we are confident we will report further significant progress within our full-year results, consistent with market expectations.”