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Tuesday 13 October 2020

The US helps Essensys through a tough H2

LogoA near 15% rise in sequential half year US sales helped London-based flexible workspace SaaS platform provider Essensys to weather the initial impacts of the coronavirus pandemic. Overall turnover for FY20 (the twelve months to 31st July) increased by 9% yoy to £22.5m with the hoh top line decline limited to 2.6%. Total recurring revenue for the year grew by 19% yoy to hit £19.4m.

Following a loss of £1.4m in FY19, the company’s bottom line turned black this year with a pre-tax profit of £300K. This position benefited, however, from the receipt of a total of £351K from both UK and US governmental COVID support schemes. Adjusted EBITDA for the period remained flat yoy at £4.2m.

Essensys had braced itself for a challenging second half (see here). Beyond the furloughing of some staff in this country, all other Group employees agreed to reduced working hours and pay, and the members of the Board and the Group's senior management took substantial pay reductions. Non-essential capital or operating expenditure was paused, as was all recruitment. Moreover, the company boosted its liquidity through both a £7m placing.

Demand for the company’s platform, however, remained reasonably resilient through the latter part of the FY, supported in part by traditional landlords and commercial real estate operators entering the flexible workspace market as appetite for traditional long leases reduced. 31 new customers were secured during the reporting period and the number of connect sites rose by 17% to 419. 35 of these were added since January.

Essensys is optimistic that the shift to flexible working will continue fuel its growth. The company reports that the start of FY21 has seen both an improvement in new sales activity and an increase in its broader global pipeline.  The firm also expects to establish regional operations in mainland Europe and Asia-Pacific before next summer. Furthermore, Essensys has built up substantial cash reserves which should help it withstand whatever fresh headwinds COVID generates in the coming months.

Posted by: Duncan Aitchison

Tags: results   saas   PropTech  

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