EU Supply upbeat as revenue continues to grow

As investors in e-procurement software-as-a-service provider EU Supply gathered for the company’s annual general meeting on Tuesday morning, David Cutler updated them on revenue growth and trading in the year so far.

The AIM-traded firm’s chairman told shareholders that 2016 had seen the achievement of the board’s target of monthly run rate profitability by 31 December.

He added that the focus for 2017 remained to build revenue on that strengthened base to secure increasing European market share with a profitable future.

“I am happy to report that in the first four months of 2017, revenues have grown at over 25% compared to the same period in 2016,” Cutler said.

As of 31 December, 71% of revenues were of a recurring or repeated nature which, together with the group's “promising pipeline” of opportunities, gave the board confidence that the strong revenue growth would continue for the rest of this year, he explained.

“The strong growth, order book and the encouraging pipeline of opportunities referred to above reassures the board in the group's substantial prospects for 2017, including particularly from countries such as Denmark, Norway, Lithuania and Ireland.

“Furthermore, the first orders from the German market are anticipated to be received in the second half of the year.”

Cutler said the group continued to see high activity in the European e-procurement markets, where there was a low adoption rate highlighted by many public sector organisations tendering or planning to tender for an e-procurement solution in the near future.

“Group costs continue to be tightly controlled and, with the growing revenue stream and conversion of the pipeline, the group is making careful investment in key staff to support the continued growth of the group.”

The ratified EU directives, which before November 2018 would require all public bodies and authorities to make available all documents and notices online and to manage essential phases of all higher value tenders electronically, continued to create opportunities for the group, Cutler claimed.

“The directors believe that the continued strong growth demonstrates that EU Supply is well positioned to take advantage of this expanding market.”

The group saw further up-selling opportunities of services and modules in addition to those minimum services required for compliance with the EU Directives, he added.

“Such demand, and the functional breadth, depth and flexibility of the company's CTM platform, reinforces the board's view that the underlying market is also continuing to expand also well beyond November 2018 and that EU Supply continues to secure a share of that growth.”