Essensys reports year of 'good' post-Covid progress

The AIM-traded firm agreed the renewal of multi-year contracts with its largest customers in both the UK and the United States, who were accelerating their own expansion plans, underpinning future revenue growth.

It also won multiple new customers in the 12 months ended 31 July, while strategic engagements continued with a number of large global landlords.

Essensys said its operations in Asia-Pacific and Europe were established in the year, with new customer sites now live, as the business adopted a 'capital light' model to support its continued growth in new geographies, which would reduce the capital required for that expansion.

Investment in product and people was continuing in line with the business plan, both in the Essensys platform, providing additional capability to customers, and in its smart access product, enabling a “secure touchless digital building experience”.

Revenue and adjusted EBITDA for the 2022 financial year were expected to be in line with consensus market expectations.

As at 31 July, the group had contracted new business which was expected to deliver £1.6m of annual recurring revenue once live, and looking ahead, the board said Essensys had a “healthy new business pipeline” of opportunities.

The group said it ended the year with a “strong” cash balance of £24m, ahead of management expectations, which would support its strategic plans, while it remained debt-free.

“I am pleased to report good strategic progress against our long term plan despite continued challenging conditions,” said chief executive officer Mark Furness.

“It is clear that hybrid working arrangements are here to stay and that the structural drivers that are changing the commercial real estate industry - flexibility, digitalisation and sustainability are becoming ever more embedded; underpinning our long-term growth plans as the impact of the Covid-19 pandemic recedes.”

Furness said the company was continuing to invest in the product pipeline, and was seeing evidence that larger flexible workspace operators had resumed their expansion plans, and that traditional real estate operators were “making positive steps” to implement flexible workspace offerings following some rationalisation.

“Essensys plays a vital role in supporting real estate players to create seamless in-building experiences in their flexible operations by removing complexity and reducing costs through automation and simplification and we remain confident in the market and opportunity for the group in 2023 and beyond.”

At 1448 BST, shares in Essensys were up 2.48% at 62p.

Reporting by Josh White at Sharecast.com.