Essensys ends first half in line with expectations

The AIM-traded firm said the performance was primarily driven by its North America business, which generated growth of 36% to £8.1m.

Its new site deliveries also increased 31% year-on-year, resulting in non-recurring revenue of £2.3m in the six months ended 31 January, which was twice that of the first half of the 2022 financial year.

The average non-recurring revenue per site was up by 69%, reflecting higher volume and value of sites.

Essensys also said new sites were generating 17% higher contracted recurring revenue per site than closed sites on average, helping to mitigate the impact of lower-value churn.

Additionally, 76% of new sites that went live in the period were with “strategic” customers, and 89% of new deals signed in the period were also with those customers.

The company reported £1.5m in annual recurring revenue from contracted sites that were not yet live at the end of the period.

Despite net cash at the period end falling to £12.6m, from £24.1m at the end of July, the firm said it remained debt-free.

Its board put the decrease in cash down to the timing of working capital movements, which were expected to normalise post-period end.

“Essensys grew revenues strongly in the first half of our financial year and is accelerating plans to return to profitability and cash generation,” said chief executive officer Mark Furness.

“Our performance has been positive despite challenging market conditions - and I would like to thank our people for their continued hard work and dedication, including those who have recently left us.

“Our customer base, focused on best-in-class global real-estate leaders, is benefiting from long-term, structural demand for premium flexible workspace.”

Furness said the strength of the firm’s platform and market position was helping it to win new customers that matched its ambitions for significant growth through its 'land and expand' strategy.

“This is reflected in increases in the amount of revenue we are making from our sites.

“Essensys has a clear strategy, a proven track record of growth and innovation and a clear plan to return to profitability in the 2024 financial year, and generate positive annualised cash flow by the end of 2024.”

At 1605 GMT, shares in Essensys were down 0.87% at 57p.

Reporting by Josh White for Sharecast.com.