SmartSpace recurring revenues improve as losses widen slightly

Workspace management software company SmartSpace reported an 8.8% improvement in total group revenues in its first half on Tuesday, to £2.52m.

The AIM-traded firm said annual recurring revenue was ahead 53% year-on-year for the six months ended 31 July, to £3.78m, with that momentum continuing into the second half, with annual recurring revenue totalling £4.11m as at 30 September.

Recurring revenues were 52% higher at £1.59m.

The company said its gross margin on continuing operations continued to improve to 71%, from 51% a year earlier, reflecting an increased mix of higher-margin software-as-a-service revenues, in-line with its stated strategy.

It reported a group adjusted EBITDA loss of £1.29m, widening from £0.87m, with losses per share coming in at 5.49p, compared to 3.47p in the first half of the 2021 financial year.

Cash balances at period end totalled £3.37m, up from £1.56m a year earlier, and its net cash position was £2.97m, growing from £1.14m.

The group had cash of £3.25m as at 20 October.

“As indicated in our recent trading update, our primary objective is to build a high growth software-as-a-service business with strong recurring revenues,” said chief executive officer Frank Beechinor.

“The results for SwipedOn and Space Connect illustrate that these key objectives are being achieved.

“While Evoko Naso sales continue to be slower than anticipated, we share Evoko's confidence in the medium and long-term potential of Naso.”

Beechinor said the company’s operations were focussed on a “highly-attractive” sector, evidenced by a number of major competitors consolidating at high annual recurring revenue multiples.

“Our priorities remain focused in continuing to deliver strong growth in annual recurring revenue, and to maximise value for shareholders over the coming years.”

At 1250 BST, shares in SmartSpace Software were up 8.75% at 87p.