TIDMESYS
RNS Number : 1054T
essensys PLC
23 March 2021
23 March 2021
essensys plc
("essensys" or the "Group")
Half year results for the six months ended 31 January 2021
Performance in line with management expectations - strong US
momentum; UK resilient
essensys plc (AIM:ESYS), the leading global provider of mission
critical software-as-a-service (SaaS) platforms and on-demand cloud
services to the flexible workspace industry, announces unaudited
results for the half year ended 31 January 2021. All information
relates to this period, unless otherwise specified.
Current trading and outlook:
* Trading since the period end has continued in line
with our expectations, with increased visibility of
longer term pipeline of business:
o The Group has 51 Connect sites contracted for delivery post
half year end
o Sales activity levels and bookings are increasing month
on month
o Early signs of improved activity levels within existing
customer base however timing of implementation remains uncertain
due to the ongoing, albeit reducing, impact of Covid-19
* Underlying office occupancy has started to recover
noticeably following the very recent announcements
regarding the route out of lockdown in the UK which
is expected to lead to a recovery in Marketplace
revenues in due course
* Business development activity is accelerating,
particularly in the broader real estate sector where
the Group is now engaged with three of the world's
largest real estate firms creating a significant long
term growth opportunity. Engagement with landlords
and real estate investors, including those with
global portfolios, is increasing and a number of our
existing flexible workspace operator customers are
re-starting their expansion programmes.
* The existing contracted pipeline, increased sales
bookings and improved customer activity levels means
that the Board continues to expect results for the
current year to be in line with market expectations.
The Group's performance during Covid-19 has
demonstrated the resilience of the business, and the
Board believes the pandemic has accelerated the long
term opportunity due to the structural shift to more
flexible working arrangements.
Strategic highlights:
* Resilient performance against a challenging market
backdrop and in line with management expectations:
o Continued expansion of customer base; 18 new customers added
o Momentum building: 431 Connect sites live, up 8% year on
year
* Strong momentum in North America as market
opportunity continues to accelerate:
o US recurring revenue up 23%; US expansion continues and
accelerating;
o Appointment of CEO for North America to drive continued
expansion
* Continued investment to capture market growth via
land and expand strategy:
o New strategic customer wins provide significant expansion
opportunities
o Launch of Flex Services Platform to support push into broader
corporate real estate market
o Growth of North American sales and marketing team
o Launch of European go-to-market capability; making good
early progress
o Further expansion of UK based R&D capability
Financial highlights:
* Revenue and underlying profits in line with
management expectations
o Recurring revenue marginally increased (at constant currency)
compared to last year representing 91% of total revenue (H1
2020: 85%)
o Group Annual Recurring Revenue ("ARR") gross margin of 70%
(H1 2020: 70%)
* US recurring revenues up 23% in US Dollar terms; UK
recurring revenues down 18% primarily due to reduced
Marketplace revenue and net reduction in customer
sites due to the impact of Covid-19
* As expected, Adjusted EBITDA was lower due to the:
o Full period effect of continued investment in sales and
marketing, product development and expansion of the Group's
North American operations together with a reduction in non-recurring
revenue in the period
o Impact of the strengthening of the pound against the US
Dollar
* Strong balance sheet with cash position of GBP5.9m at
period end; no debt
Mark Furness, CEO of essensys, said:
"essensys has delivered results in the period in line with
management expectations, in a year of a global pandemic. The
resilience and strength of our performance reflects excellent
momentum in the US, 91% recurring revenues, and robust retention
rates.
Despite the short-term impact of Covid-19 on market conditions,
we expect the pandemic to accelerate the adoption of flexible
workspace solutions for companies of all sizes. We continue to see
traditional landlords and commercial real estate companies
accelerate the development of their own flexible workspace products
and services, which we believe will be a key driver of our future
growth. This has supported our investment in long-term growth with
the launch of our Flex Services Platform, and expansion of our
teams in the UK, continental Europe and North America.
essensys' resilient trading, contracted new Connect sites,
healthy pipeline and plans to increase new product development
underlines our simple and clear strategy to capture the large and
attractive market opportunity in the global flexible workspace
market. This provides us with confidence of continuing to meet
market expectations for the full year."
Financial summary:
GBPm unless otherwise stated Six months Six months Change
to January to January
2021 2020
Revenue 10.6 11.4 -7.0%
Recurring revenue(1) 9.6 9.7 -1.0%
Run Rate Annual Recurring Revenue(1,
2) 19.9 19.7 +1.0%
Revenue at constant currency(2) 10.8 11.4 -5.3%
Recurring revenue at constant
currency(1) 9.8 9.7 +1.0%
Statutory (loss) before tax (1.7) (0.1)
Adjusted EBITDA(3) 0.7 1.9 -63%
Adjusted EBITDA margin 6.6% 16.7%
(Loss)/profit before tax (prior
to share based payment expenses)(3) (1.4) 0.2
Loss per share (pence) (3.27)p (0.2)p
Cash 5.9 1.7
Notes
1. See CFO Review below for description and breakdown
2. Current period revenue and/or costs translated into GBP using
the average exchange rate for the comparative prior period
3. Adjusted for share option charges and exceptional costs where
applicable
For further information, please contact:
+44 (0)20 3102
essensys plc 5252
Mark Furness, Chief Executive Officer
---------------
Alan Pepper, Chief Financial Officer & Chief
Operating Officer
---------------
N+1 Singer (Nominated Adviser and Joint +44 (0)20 7496
Broker) 3000
---------------
Peter Steel / Harry Gooden / George Tzimas
---------------
+44 (0)20 3207
Berenberg (Joint Broker) 7800
---------------
Richard Kauffer / Tejas Padalkar / Alix
Mecklenburg-Solodkoff
---------------
FTI Consulting
---------------
Jamie Ricketts / Eve Kirmatzis / Debbie +44 (0)20 3727
Oluwaseyi Sonaike / Talia Jessener 1000
---------------
About essensys plc
essensys is the leading global provider of mission-critical SaaS
platforms and on-demand cloud services to the high growth flexible
workspace industry. essensys' software is specifically designed and
developed to help solve the complex operational challenges faced by
landlords and multi-site flexible workspace operators as they grow
and scale their operations. The Group's technology allows operators
to deliver a range of differentiated, flexible and
customer-specific services to a broad base of tenants across
multiple locations and helps operators to manage the cost,
operational and technological challenges they typically
encounter.
essensys' Flex Services Platform addresses these significant
operational pain points head on and reduces costs by simplifying
the day-to-day management of flexible workspaces and the provision
of on-demand technology and infrastructure services to tenants.
essensys technology delivers secure digital infrastructure,
effective space setup, seamless operations, and mobile-first
occupier interactions. It automates key tasks and processes and
helps flexible workspace providers deliver highly efficient,
customer-centric workspace solutions and in-building experiences
with enterprise class services.
Chef Executive Officer's Report
Underlying growth
Despite the continued challenging trading environment, I am
pleased to report continued growth in our underlying business with
further new customers added, an increased number of customer sites,
expanded geographical coverage, new product launches and
accelerating expansion of our market opportunity. Whilst the last
year has been the most challenging the business has faced, the
medium to long term outlook for the business is very positive.
Overall Group revenue in the period was impacted primarily by
fewer Connect sites commissioning compared to the pre-Covid period
last year and by reduced Marketplace revenue driven by fewer
occupants in offices (particularly in the UK). We have nevertheless
maintained overall recurring revenue levels in line with the prior
period and seen a slight increase in ARR run rate to GBP19.9m (at
constant currency).
Market overview and outlook
We are now seeing a considerable acceleration of the trend
towards more traditional real estate providers entering the
flexible workspace environment. This ranges from smaller landlords
being more open to management arrangements with major global
property operators to the mid and larger sized, more operationally
capable, landlords looking to establish their own branded and
differentiated products. Where we are dealing with international
property owner-operators they are approaching this fundamental
market shift strategically with the aim of establishing and scaling
a specific offering across their portfolio globally.
Recent industry commentary supports this expectation of a
significant expansion of the provision of flexible workspace after
the pandemic. This includes a forecast that, in the US "the number
of flexible workspace locations double or triple over the next five
years - despite a temporary setback from the Covid-19 pandemic"(1)
. Another report predicts a global increase in supply of 21% in
2021(2) . A recent survey from CBRE indicates that 86% of global
occupiers see flexible office space as a critical component of
their future real estate strategy(3) .
The real estate industry has continued to invest in the flexible
workspace market. There have been two recent significant examples
of the traditional real estate industry investing in established,
specialist operators - CBRE's acquisition of 40% of Industrious,
and the integration of their Hana business into it; together with
Newmark Knight Frank's recent acquisition of Knotel.
Whilst this recent activity has been concentrated in the US we
are seeing this extend into our UK and newly established European
businesses. In both territories we are seeing large landlords and
real estate investors investigating how to enter the market and
starting to run pilot sites. At the same time the existing flexible
workspace operators are re-commencing their expansion
activities.
There remains uncertainty about the short-term recovery timing
from the Covid-19 pandemic. There is no doubt, however, that these
market developments and expanding market opportunities will benefit
the Group in the medium to longer term, given our positioning as a
leading global provider of mission-critical SaaS platforms and
on-demand cloud services to the high growth flexible workspace
industry.
Expanding opportunity
We continue to expand our customer base, across all geographies,
with a further 18 new customers added in the period. Among these
new customers are large property companies and commercial real
estate operators who are at the early stages of establishing their
flexible workspace operations with the aim of
(1) Flex Forward - The Flexible Workspace Report 2020, Colliers
US, November 2020
(2) 2021 CRE Predictions, The Instant Group, December 2020
(3) The End of the Beginning, North America Flex Office Market
in 2020, CBRE, December 2020
growing extensively across their portfolios. These types of
strategic customers provide the Group with significant long term
expansion opportunities.
Our active Connect sites continued to grow in the period - to
431 at January 2021 (January 2020: 400) and following the
repositioning of Operate, we continued to see pricing improvements
and increases in site numbers in the period.
Whilst there remains uncertainty around the timing of the short
term recovery from the Covid-19 pandemic, we have contracted
commitments for a further 51 Connect sites for delivery post 31
January 2021.
Continued growth in the US
Our US business continued to grow in the first half with a 21%
increase in Connect sites over the prior period to 240 (H1 FY20:
199) leading to a 23% increase in US recurring revenue (in USD) in
the period. This growth in the US market is accelerating as the
Covid-19 restrictions are reduced and the structural shift towards
landlords providing flexible solutions for their occupiers takes
hold.
At the same time, the larger, well-funded, existing flexible
workspace operators have restarted their growth plans which, whilst
not evident in H1 FY21, are expected to benefit us towards the end
of FY21 and more significantly into FY22. Increasingly we are
engaging with mid and large tier landlords across North America and
whilst initial business is expected to be relatively modest, this
provides a significant long term opportunity for the Group.
Our recent investment in additional go-to-market capability in
the US is delivering results with initial sites contracted with a
number of larger owners and operators due to go live in the balance
of FY21.
Resilience of underlying business
We are pleased with the resilience shown by the business during
the pandemic. Overall Connect site numbers increased to 431 at
January 2021 (January 2020: 400) driven by strong momentum in the
US. Site churn has remained very low and mostly in the UK where
operators have taken the opportunity to rationalise estates as
existing site contracts have come to natural end.
As previously reported, we saw a reduction in Marketplace
revenues during the period as service utilisation reduced in line
with lower underlying occupancy levels, particularly in the UK
where sites are more mature and Marketplace revenues higher. Whilst
initial expectations were for a recovery in underlying occupancy in
the first six months of the year, this was limited by continued
government restrictions, but we are now seeing a recovery.
Following the setting out of the UK government's roadmap for
exiting lockdown and improvements in the Covid-19 situation in both
the UK and the US we have seen a 34% increase in underlying
customer site occupancy in the UK since the end of January and at
the same time an 11% increase the US.
Product development
I am pleased to report that, following substantial investment in
software and product development since just before our IPO in May
2019, we launched our new Flex Services Platform on 16 March 2021.
The Flex Services Platform will provide workspace providers,
whether specialist operators or more traditional landlords, with a
single software and digital infrastructure platform to operate and
scale up their flexible workspaces.
Built on our private network and cloud infrastructure, the
platform supports the four key components that determine the
quality of occupier experience: secure digital infrastructure,
effective space setup, flexible operations management, and
easy-to-use mobile-first occupier interactions.
The launch of Flex Services Platform is the first element of our
longer-term vision to deliver all the technology needed for
next-generation flexible workspace experiences across commercial
real estate. Already incorporating the recently launched Smart
Access capability, the roadmap that we have set out at launch
incorporates further new capabilities to create seamless
experiences across Digital Infrastructure, Space Management,
Flexible Operations and Occupier Experience, with a longer-term
plan to deliver visitor management, space visualisation and
integrated support for environmental & occupancy sensors along
with other Internet of Things devices.
In addition to this recent, significant, development we are
already seeing the benefit of previous product releases. Over 50%
of activity across our network now routes directly to the major
cloud service providers (including Amazon, Apple, Dropbox and
Salesforce). This is of considerable benefit to our customers as
they are able to attract and retain high-value enterprise clients
because they can, via our platforms, deliver the secure, private,
high performance 'on-net' solutions that many enterprises now
demand.
To help us address the expanding market opportunity and meet
customer requirements for ever more integrated property technology
solutions we have established a specific function within our
development capability (essensysLabs) to research the application
of new technologies to our customer base and to develop products
that complement our software platform and deliver value to our
expanding customer base.
We continue to increase our investment in UK based development
capability with our UK based team increasing by approximately one
third over the period. This has allowed us to continue the ongoing
reduction in our offshore based development capability. We
anticipate continuing to invest in UK based development capability
as the business continues to grow.
Geographical & 'go-to-market' expansion
Our expansion in North America is expected to accelerate as we
see the US market expand. Following the appointment of our new CEO
North America, Jeremy Bernard, we have improved the go-to-market
capability, and expect to make additional business development
appointments in the coming months. The investment we made
previously in this area is already bearing fruit and we see
significant benefit in more proactive senior engagement across the
broader real estate market in North America.
Our geographical expansion strategy continues to be executed
with additional go-to-market capability coming on stream in Canada
and, more recently, France with the establishment of our European
business. We have appointed personnel with deep knowledge of their
local real estate markets, who are already showing encouraging
engagements with multi-site, multi-jurisdiction landlords, and in
the case of France, with a number of established flexible workspace
operators. Sales cycles for multi-site, multi-jurisdictional
landlords are expected to be longer as landlords enter this market
for the first time. However, our engagement with existing operators
in Europe is expected to provide earlier revenue opportunities. We
continue with our ongoing expansion plans in Europe.
Inevitably the establishment of our Asia Pacific business has
been delayed by the continued impact of the Covid-19 pandemic.
Whilst we have undertaken all our preparatory work for market entry
locally, we have been unable to undertake any in-country work or
identify appropriate personnel as yet. We continue to have existing
customer engagement for Asia Pacific locations and expect our first
Connect site to be live in region in Q1 FY22.
As part of this business expansion, we continue to invest in
broader marketing capability to support this business development
activity and product marketing.
Current trading and outlook
Trading since the period end has continued in line with our
expectations with continued increase in sales pipeline activity,
sales bookings and engagement with large property groups referred
to previously. We are starting to see improvements in the general
trading environment in our core markets with a steady increase in
underlying occupancy of customer locations and existing customers
adding additional sites. There still remains a risk of delays to
new site deliveries however any such delays are becoming
shorter.
The recent launch of our Flex Services Platform has been well
received by existing customers and prospects alike and our
increasing engagement with the broader corporate real estate market
is already delivering business. It remains clear to us that the
structural shift to more flexible working arrangements has been
accelerated by the Covid-19 pandemic and we are increasingly
optimistic for the future opportunity for essensys.
In the shorter-term activity levels in our US business are
accelerating and we will be increasing our investment there over
the coming months. Whilst there remains uncertainty over the exact
timing of the recovery from Covid-19 our current activity levels
mean that we continue to expect results for the full year to be in
line with market expectations.
Mark Furness
Chief Executive Officer
22 March 2021
Chief Financial Officer's Report
This is the second interim report issued by essensys since its
Admission to AIM on May 2019 and covers the six months to 31
January 2021. The prior comparative period ended 31 January 2020
was the period immediately prior to the impact of the Covid-19
pandemic.
Financial Key Performance Indicators
GBP'm unless otherwise stated Six months Six months Change
to January to January
2021 2020
Group Total Revenue 10.6 11.4 -7.0%
UK 5.4 6.6 -18%
USA 5.2 4.8 +8.3%
Recurring Revenue(1) 9.6 9.7 -1.0%
UK 5.2 5.9 -12%
USA 4.4 3.8 +16%
Recurring Revenue %age of Total 91% 85%
Run Rate Annual Recurring Revenue
(1) 19.9 19.7 +1.0%
Recurring Revenue at constant
currency 9.8 9.7 +1.0%
UK 5.2 5.9 -12%
USA 4.6 3.8 +21%
Non-recurring revenue 1.0 1.7 -41%
Product Revenue
Connect 9.6 10.5 -8.6%
Operate 1.0 0.9 +11%
Gross Profit 7.1 7.2 -1.4%
Gross Profit percentage 67% 63%
Recurring Revenue margin %age 70% 70%
Statutory (loss) before tax (1.7) (0.1)
Adjusted EBITDA(2) 0.7 1.9 -63%
Adjusted EBITDA margin 6.6% 17%
(Loss)/profit before tax (prior
to share based payments) (1.4) 0.2
Cash 5.9 1.7
Revenue
Group Total Revenue fell to GBP10.6m in H1 FY21 (H1 FY20
GBP11.4) due to a combination of lower non-recurring revenue from a
smaller number of new Connect sites commissioned in the period and
lower recurring revenue in the UK, primarily from reduced occupancy
based Marketplace revenue. Reported revenue was also negatively
impacted by the strengthening of pound sterling in the period (see
further commentary below). Total Revenue from the Group's US
business grew 8% compared to H1 FY20.
Recurring revenue comprises income invoiced for services that
are repeatable and consumed and delivered on a monthly basis over
the term of a customer contract. Run Rate Annual Recurring Revenue
(Run Rate ARR) is an annualisation of the recurring revenue for the
month identified (January 2021); this is used by
(1) See Revenue section for explanation
(2) See Adjusted EBITDA explanation below
management as an indication of the annual value of the recurring
revenue for that month and to monitor long term revenue growth of
the business.
As noted above reported revenue had been impacted by the
strengthening of the pound against the US Dollar. Excluding this
impact Run Rate ARR grew slightly compared to the prior period as
reduced revenue from the impact of Covid-19 primarily in reduced
marketplace revenue was offset by the 8% overall increase in
Connect sites to 431 at 31 January 2021 (January 2020: 400).
In constant currency terms recurring revenue increased slightly
compared to H1 FY20. Following the previously reported
repositioning of the Operate business, a combination of the
continued increase in revenue per site and a 6% increase in site
numbers resulted in an increase of 10% in Operate recurring revenue
in the period. US Connect recurring revenue grew 23% in US Dollar
terms following an increase in site numbers to 240 (from 199 at 31
January 2020). UK recurring revenue was negatively impacted by a
combination of the ending of non-cash deferred income release
related to a pre-IPO recontract, reduced occupancy based
Marketplace revenue and, a net reduction in customer sites as a
result of the impact of the Covid-19 pandemic.
Gross margins
Overall gross margins increased year on year from a combination
of an increased proportion of recurring revenue and an increase in
recurring revenue margins in the US. UK recurring revenue margins
have been maintained at a consistent level despite the reduction in
marketplace revenue as a result of cost efficiencies. Operate
margins continue to increase driven by increased numbers of sites
and higher revenue per site.
Administrative expenses
Excluding depreciation charges, administrative expenses grew by
GBP1.1m compared to the prior period in line with the Group's
strategic plans and management expectations. This was primarily
driven by increases in staff costs resulting from increases in
business development personnel in the US and Europe and the
appointment of the new US CEO. Marketing expenditure in the period
was greater in H1 FY21 in support of the group's expanding 'go to
market' capability. The Group incurred increased professional fees
as it continues to grow, including establishing its Canadian and
European businesses and made additional provision for estimated
credit losses following the Covid-19 pandemic.
Statutory loss for the half year
The Group incurred a GBP1.7m statutory loss for the half year to
January 2021 (H1 FY20: loss of GBP0.1m), analysed as follows:
GBP'm H1 FY21 H1 FY20
UK (including non-capitalised
R&D) 0.0 1.2
US 0.4 0.4
Canada (0.1) -
Europe (0.1) -
Central costs (1.6) (1.4)
(Loss)/Profit before tax (before
share based payment expenses) (1.4) 0.2
Share based payment expense (0.3) (0.3)
Loss before tax for the period (1.7) (0.1)
======== ========
The UK continues to bear the cost of the Group's product and
software development teams to the extent that these are not
capitalised.
Adjusted EBITDA
As previously reported, adjusted results are prepared to provide
a more comparable indication of the Group's core business
performance by removing the impact of share based payment expenses,
exceptional costs (where material and non-recurring), and other,
non-trading, items that are reported separately. Adjusted results
exclude adjusting items as set out in the statement of consolidated
income and below, with further details given in the notes to the
unaudited interim financial information below, where applicable. In
addition, the Group also measures and presents performance in
relation to various other non-GAAP measures, such as recurring
revenue, run-rate annual recurring revenue and revenue growth.
Adjusted results are not intended to replace statutory results.
These have been presented to provide users with additional
information and analysis of the Group's performance, consistent
with how the Board monitors results.
Adjusted EBITDA (being EBITDA prior to share based payment
expenses and exceptional items) is calculated as follows:
GBP'm H1 FY21 H1 FY20
Operating (loss)/profit (1.3) 0.0
Add back:
Depreciation & Amortisation 1.7 1.6
EBITDA 0.4 1.6
Add back:
Share Option Charge 0.3 0.3
Adjusted EBITDA 0.7 1.9
======== ========
Adjusted EBITDA for the half year was down from H1 FY20 by
GBP1.2m due to the full period effect of continued investment in
sales and marketing, product development and expansion of the
Group's North American operations together with a reduction in
non-recurring revenue in the period and the impact of the
strengthening of the pound against the US Dollar.
Currency impact
During the period the Group experienced a 5% increase in the
value of the Pound Sterling against the US Dollar. As approaching
50% of the Group's revenues are denominated in USD this
strengthening of the pound has impacted the reporting of the
Group's revenues compared to the comparative period last year.
Whilst the impact in the period was not overly significant
(GBP255,000 negative impact on revenue and limited at EBITDA) the
pound has continued to strengthen into the second half of the year.
The Group does not currently expect that that the pound will weaken
against the dollar whilst the proportion of the Group's revenues
denominated in USD is expected to increase. It is expected
therefore that there will be greater impact on reported revenues
and profitability from changes in the pound to US dollar exchange
rate in the second half of the year and in future years.
Taxation
The tax charge incurred by the Group in the period is in
relation to deferred tax in the UK.
Cash
Following our equity fundraise in April 2020, net cash at the
half year end was GBP5.9m, in line with management expectations.
The Group continues to maintain sufficient cash reserves to fund
its working capital requirements, planned product and software
development together with any expected short-term geographic
expansion.
In light of the current, Covid-19 situation the Board has
considered a number of different scenarios regarding trading and
financial performance over the balance of this financial year and
into FY22 and is confident that it maintains sufficient cash
resources in the event of a significant, long term, impact on the
Group.
Capitalised Software Development Costs
As previously reported, the Group continues to invest heavily in
product development. Increasingly these cost are borne in the UK
following a decision to increase the UK based development team and
reduce the size of the Group's outsourced offshore development
centre in Hanoi, Vietnam. Where such work is expected to result in
future revenue, costs incurred that meet the definition of software
development in accordance with IAS38, Intangible Assets, are
capitalised in the statement of financial position. During the half
year the Group capitalised GBP1.0m in respect of software
development (H1 FY20: GBP1.0m).
Capital Expenditure
In addition to the capitalisation of software development costs
noted above, the Group continues to invest in expanding the
capacity and capability of its private network. Capital investment
in the period was GBP0.5m (H1 FY20 GBP0.6m).
Alan Pepper
Chief Financial Officer
22 March 2021
UNAUDITED INTERIM FINANCIAL INFORMATION OF ESSENSYS PLC
GROUP
Consolidated statement of comprehensive income
Six months Six months
ended ended
31 January 31 January
2021 2020
GBP'000 GBP'000
Note (unaudited) (unaudited)
------------ ------------
Revenue 3 10,596 11,407
Cost of sales (3,519) (4,195)
------------ ------------
Gross profit 7,077 7,212
Administrative expenses (8,424) (7,216)
Other operating income 34 11
------------ ------------
Operating (loss)/profit (1,313) 7
Operating (loss)/profit analysed by:
Operating (loss)/profit before share
based payments (1,038) 259
Share based payment expenses (275) (252)
Finance income - 2
Finance expense (339) (90)
Loss before taxation (1,652) (81)
Taxation (70) (12)
------------ ------------
Loss for the period (1,722) (93)
Other comprehensive loss
Exchange differences arising on translation
of foreign operations (154) (184)
------------ ------------
Total comprehensive loss for the period (1,876) (277)
============ ============
Loss per share
Basic and diluted loss per share 4(3.265p) (0.193p)
UNAUDITED INTERIM FINANCIAL INFORMATION OF ESSENSYS PLC
GROUP
Consolidated statement of financial position
As at As at
31 January 31 July
2021 2020
GBP'000 GBP'000
Note (unaudited) (audited)
------------ ----------
ASSETS
Non-current assets
Intangible assets 5 5,472 5,013
Property, plant and equipment 6 1,671 1,695
Right of use assets 7 1,644 2,055
------------ ----------
8,787 8,763
============ ==========
Current assets
Inventories 160 323
Trade and other receivables 10 5,139 5,186
Cash at bank and in hand 10 5,937 8,496
------------ ----------
11,236 14,005
============ ==========
TOTAL ASSETS 20,023 22,768
============ ==========
EQUITY AND LIABILITIES
Equity
Shareholders' equity
Called up share capital 8 132 132
Share premium 19,881 19,881
Share based payment reserve 1,763 1,490
Merger reserve 28 28
Retained earnings (7,311) (5,435)
------------ ----------
Total equity 14,493 16,096
============ ==========
Non-current liabilities
Lease liabilities 9 566 796
Deferred tax 497 409
Total non- current liabilities 1,063 1,205
============ ==========
Current liabilities
Trade and other payables 2,799 3,561
Contract liabilities 3 631 550
Lease liabilities 9 1,037 1,346
Current taxes - 10
------------ ----------
4,467 5,467
============ ==========
TOTAL LIABILITIES 5,530 6,672
============ ==========
TOTAL EQUITY AND LIABILITIES 20,023 22,768
============ ==========
UNAUDITED INTERIM FINANCIAL INFORMATION OF ESSENSYS PLC
GROUP
Consolidated statement of changes in equity
Share
based
Share Share payment Merger Retained
capital premium reserve Reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- --------- --------- --------- --------
Balance at 1 August 2020
(audited) 132 19,881 1,490 28 (5,435) 16,096
Comprehensive Income
Loss for the period - - - - (1,722) (1,722)
Currency translation
differences - - - - (154) (154)
Total comprehensive loss - - - - (1,876) (1,876)
-------- -------- --------- --------- --------- --------
Transactions with owners
Currency translation
differences - - (2) - - (2)
Share based payment expense - - 275 - - 275
Balance at 31 January
2021 132 19,881 1,763 28 (7,311) 14,493
(unaudited)
======== ======== ========= ========= ========= ========
Balance at 1 August 2019 120 13,184 979 28 (5,318) 8,993
(audited)
Comprehensive Income
Loss for the period - - - - (93) (93)
Currency translation
differences - - - - (184) (184)
-------- -------- --------- --------- --------- --------
Total comprehensive loss - - - (277) (277)
-------- -------- --------- --------- --------- --------
Transactions with owners
Share based payment expense - - 252 - - 252
Balance at 31 January
2020 120 13,184 1,231 28 (5,595) 8,968
(unaudited)
======== ======== ========= ========= ========= ========
UNAUDITED INTERIM FINANCIAL INFORMATION OF ESSENSYS PLC
GROUP
Consolidated cash flow statements
Six months Six months
ended ended
31 January 31 January
2021 2020
GBP'000 GBP'000
(unaudited) (unaudited)
------------ ------------
Cash flows from operating activities
Loss before taxation (1,652) (93)
Adjustments for non-cash/non-operating
items:
Amortisation of intangible assets 588 464
Depreciation of property, plant and equipment 525 299
Amortisation of right-of-use assets 596 839
Share based payment expense 275 252
Finance income - (2)
Finance expense 339 90
Receipts from government grants treated
as income (34) -
------------ ------------
637 1,849
Changes in working capital:
Decrease/(increase) in inventory 163 (206)
Decrease/(increase) in trade and other
receivables 47 (794)
(Decrease)/increase in trade and other
payables (681) 826
------------ ------------
Cash from operations 166 1,675
Taxation received 8 31
Net cash from operating activities 174 1,706
Cash flows from investing activities
Purchase of intangible assets (1,047) (950)
Purchase of property, plant and equipment (539) (591)
Interest received - 2
Net cash used in investing activities (1,586) (1,539)
------------ ------------
Cash flows from financing activities
Receipts from government grants 34 -
Payment at termination of loan (63) -
Repayment of lease liabilities (1,008) (1,057)
Interest on lease liabilities (86) (90)
Net cash used in financing activities (1,123) (1,147)
------------ ------------
Net decrease in cash and cash equivalents (2,535) (980)
Cash and cash equivalents beginning of
period 8,496 2,688
Effects of foreign exchange rate changes (24) 12
------------ ------------
Cash and cash equivalents at end of period 5,937 1,720
============ ============
UNAUDITED INTERIM FINANCIAL INFORMATION OF ESSENSYS PLC
GROUP
Notes to the unaudited interim financial information
1. Basis of preparation
The unaudited condensed interim financial information presents
the consolidated financial results of essensys plc and its wholly
owned subsidiaries (together, "essensys plc Group" or "the Group")
for the six-month period to 31 January 2021. This financial
information has been prepared in accordance with the recognition
and measurement requirements of International Financial Reporting
Standards and International Accounting Standards Board (IASB) and
interpretations (collectively "IFRS"). This financial information
does not include all disclosures that would otherwise be required
in a complete set of financial statements and should be read in
conjunction with the 31 July 2020 Annual Report. The financial
information for the half year ended 31 January 2021 does not
constitute statutory accounts within the meaning of Section 434 (3)
of the Companies Act 2006 and both periods are unaudited.
The comparative financial information presented herein for the
year ended 31 July 2020 does not constitute full statutory accounts
for that period. The statutory Annual Report and Financial
Statements for the year ended 31 July 2020 have been filed with the
Registrar of Companies. The Independent Auditors' Report on the
Annual Report and Financial Statements for the year ended 31 July
2020 was unqualified, did not draw attention to any matters by way
of emphasis and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006.
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2020 annual financial statements, except for those that
relate to new standards and interpretations effective for the first
time for periods beginning on (or after) 1 January 2020 and will be
adopted in the 2021 financial statements. There were no new
standards impacting the Group that will be adopted in the annual
financial statements for the year ended 31 July 2021.
essensys plc is the Group's ultimate parent company. It is a
public listed company and is domiciled in the United Kingdom. The
address of its registered office and principal place of business is
Aldgate Tower 7th Floor, 2 Leman Street, London E1 8FA. essensys
plc's shares are listed on the Alternative Investment Market (AIM)
of the London Stock Exchange.
2. Going Concern
The consolidated financial statements have been prepared on a
going concern basis. In reaching their assessment, the directors
have considered a period extending at least twelve months from the
date of approval of this half yearly financial report.
The directors continue to monitor developments with, and
potential impact of, Covid-19 in the short and medium term and is
in particular focussed on the key risks of: delays by customers in
activation of existing contracted sites; near term delays in
customer contracting decisions in respect of new sites; potential
reduction in marketplace service utilisation; and the impact of the
current situation on the financial stability of customers.
The directors have prepared cash flow forecasts covering a
period of at least 12 months from the date of releasing these
interim financial statements. This assessment has included
consideration of the forecast performance of the business for the
foreseeable future, the cash and financing facilities available to
the Group and the mitigating actions undertaken to reduce the
impact of Covid-19. In preparing these forecasts, the directors
have considered a number of sensitivities, including stress testing
based on the loss of a major customer, loss of future growth market
opportunities and the continued impact of Covid-19. At 31 January
2021 the Group had cash reserves of GBP5.9m and no debt.
Based on the sensitised cash flow forecasts prepared, the
directors are confident that any funding needs required by the
business will be sufficiently covered by the existing cash
reserves.
Notes to the unaudited interim financial information
3. Segmental reporting
The Group has one single business reportable segment and
generates revenue largely in the UK and the US. The majority of the
Group's customers provide flexible office facilities together with
ancillary services (e.g. meeting rooms and virtual services)
including technology connectivity.
The Group provides mission critical software-as-a-service
("SaaS") and Cloud services to the flexible workspace industry. The
Group's software is designed specifically to serve the specific
requirements of flexible workspace providers, removing operational
complexity and enabling them to operate more efficient, tech-driven
spaces and businesses.
The Connect software-enabled-services platform allows flexible
workspace operators to provision, manage and monitor, in real-time,
all of the critical infrastructure, IT and tech services that they
provide to their customers. As part of providing this service, the
Group also provides the technology infrastructure that supports
these services.
The Group's Operate software platform is a comprehensive ERP
platform for flexible workspace providers, allowing operators to
more effectively and efficiently run their businesses
day-to-day.
The Group generates revenue from the following activities:
* Establishing services at customer sites (e.g.
providing and managing installation services,
equipment and providing training on software and
services)
* Recurring monthly fees for using the Group's
platforms
* Revenue from usage of on demand services such as
internet and telephone usage and other, on demand,
variable services.
* Other ad-hoc services
The Group has one single business reportable segment which is
the provision of software and technology platforms that manage
their critical infrastructure and business processes, primarily to
the flexible workspace industry.
The Group has two main revenue streams, Operate and Connect.
Given that support for both revenue streams is provided in such a
way as to make cost and therefore operating performance
impractical, the two revenue streams are combined into a single
reportable segment. The essensys plc Group's revenue per revenue
stream is as follows:
Six months Six months
ended ended
31 January 31 January
2021 2020
GBP'000 GBP'000
----------- -----------
Operate - workspace management software 1,021 943
Connect - software enabled infrastructure
platform 9,575 10,464
10,596 11,407
=========== ===========
Notes to the unaudited interim financial information
3. Segmental reporting (continued)
Revenue from customers greater than 10% in each reporting period
is as follows:
Six months Six months
ended ended
31 January 31 January
2021 2020
GBP'000 GBP'000
----------- -----------
Customer 1 1,780 1,717
Customer 2 1,177 1,542
Customer 3 - 1,200
=========== ===========
The Group operates in two main geographic areas, the United
Kingdom and the United States of America. The Group's revenue per
geographical area is as follows:
Six months Six months
ended ended
31 January 31 January
2021 2020
GBP'000 GBP'000
----------- -----------
United Kingdom 5,427 6,621
United States of America 5,169 4,786
10,596 11,407
=========== ===========
Group revenue disaggregated between revenue recognised 'at a
point in time' and 'over time' is as follows:
Six months Six months
ended ended
31 January 31 January
2021 2020
GBP'000 GBP'000
----------- -----------
Revenue recognised at a point in time 1,018 1,686
Revenue recognised over time 9,578 9,721
10,596 11,407
=========== ===========
Notes to the unaudited interim financial information
3. Segmental reporting (continued)
Contract assets and liabilities
Contract asset movements were as follows:
GBP000
-------
At 1 August 2020 420
Transfers in the period from contract assets to
trade receivables (160)
Excess of revenue recognised over cash (or rights
to cash) being recognised during the period 396
Capitalised commission cost released as contract
obligations fulfilled (147)
Commission costs capitalised on contracts 95
-------
At 31 January 2021 604
=======
GBP000
At 1 August 2019 475
Transfers in the period from contract assets to
trade receivables (271)
Excess of revenue recognised over cash (or rights
to cash) being recognised during the period 164
Capitalised commission cost released as contract
obligations fulfilled (159)
Commission costs capitalised on contracts 211
-------
At 31 July 2020 420
=======
Contract liability movements were as follows:
GBP000
--------
At 1 August 2020 550
Amounts included in contract liabilities that
were recognised as revenue during the period (517)
Cash received and receivables in advance of performance
and not recognised as revenue during the period 598
At 31 January 2021 631
========
GBP000
At 1 August 2019 1,044
Amounts included in contract liabilities that
were recognised as revenue during the period (1,044)
Cash received and receivables in advance of performance
and not recognised as revenue during the period 550
At 31 July 2020 550
========
Contract assets are included within 'trade and other
receivables' and contract liabilities are shown respectively on the
face of the statement of financial position. Contract assets arise
from the group's revenue contracts, where work is performed in
advance of invoicing customers. Contract liabilities arise where
revenue is received in advance of work performed. Cumulatively,
payments received from customers at each balance sheet date do not
necessarily equal the amount of revenue recognised on the
contracts. Commission costs capitalised on contracts represents
internal sales commission costs incurred on signing of customer
contracts and, in line with the requirements of IFRS15, spread over
the life of the customer contract.
4. Loss per share
The loss per share has been calculated using the loss for the
period and the weighted average number of ordinary shares
outstanding during the period, as follows:
Six months Six months
ended ended
31 January 31 January
2021 2020
GBP'000 GBP'000
----------- -----------
Loss for the period attributable to equity
holders of Essensys Group (1,722) (93)
----------- -----------
Weighted average number of ordinary shares 52,743,329 48,107,567
----------- -----------
Loss per share (3.265p) (0.193p)
=========== ===========
As the Group is loss making in both periods presented, the share
options over ordinary shares have an anti-dilutive effect and
therefore no dilutive loss per share is disclosed.
Notes to the unaudited interim financial information
5. Intangible assets
Internal
Customer software
relationships development Software Goodwill Total
GBP000 GBP000 GBP000 GBP000 GBP000
-------------- ------------ --------- --------- -------
Cost
At 1 August 2020 335 6,751 280 1,263 8,629
Additions - 1,047 - - 1,047
-------------- ------------ --------- --------- -------
At 31 January 2021 335 7,798 280 1,263 9,676
============== ============ ========= ========= =======
Amortisation
At 1 August 2020 293 3,043 280 - 3,616
Charge for year 18 570 - - 588
At 31 January 2021 311 3,613 280 - 4,204
============== ============ ========= ========= =======
Net book value
At 31 January 2021 24 4,185 - 1,263 5,472
At 31 July 2020 42 3,708 - 1,263 5,013
============== ============ ========= ========= =======
Internal
Customer software
relationships development Software Goodwill Total
GBP000 GBP000 GBP000 GBP000 GBP000
-------------- ------------ --------- --------- -------
Cost
At 1 August 2019 335 4,461 280 1,263 6,339
Additions - 2,290 - - 2,290
-------------- ------------ --------- --------- -------
At 31 July 2020 335 6,751 280 1,263 8,629
============== ============ ========= ========= =======
Amortisation
At 1 August 2019 217 2,162 228 - 2,607
Charge for year 76 881 52 - 1,009
-------------- ------------ --------- --------- -------
At 31 July 2020 293 3,043 280 - 3,616
============== ============ ========= ========= =======
Net book value
At 31 July 2020 42 3,708 - 1,263 5,013
============== ============ ========= ========= =======
At 31 July 2019 118 2,299 52 1,263 3,732
============== ============ ========= ========= =======
Notes to the unaudited interim financial information
6. Property, plant and equipment
Fixtures Computer Leasehold
and
fittings equipment improvements Total
GBP000 GBP000 GBP000 GBP000
--------- ---------- ------------- -------
Cost
At 1 August 2020 247 6,601 132 6,980
Additions - 539 - 539
Exchange adjustments (8) (142) (2) (152)
At 31 January 2021 239 6,998 130 7,367
========= ========== ============= =======
Depreciation
At 1 August 2020 154 5,053 78 5,285
Charge for year 18 501 6 525
Exchange adjustments (5) (107) (2) (114)
At 31 January 2021 167 5,447 82 5,696
Net book value
At 31 January 2021 72 1,551 48 1,671
At 31 July 2020 93 1,548 54 1,695
========= ========== ============= =======
Fixtures Computer Leasehold
and
fittings equipment improvements Total
GBP000 GBP000 GBP000 GBP000
--------- ---------- ------------- -------
Cost
At 1 August 2019 186 4,763 113 5,082
Additions 73 917 2 992
Transfers - 1,305 - 1,305
Exchange adjustments (12) (384) (3) (399)
--------- ---------- ------------- -------
At 31 July 2020 247 6,601 132 6,980
========= ========== ============= =======
Depreciation
At 1 August 2019 120 3,513 73 3,706
Charge for year 41 531 15 587
Transfers - 1,136 - 1,136
Exchange adjustments (7) (127) (10) (144)
--------- ---------- ------------- -------
At 31 July 2020 154 5,053 78 5,285
========= ========== ============= =======
Net book value
At 31 July 2020 93 1,548 54 1,695
========= ========== ============= =======
At 31 July 2019 66 1,250 60 1,376
========= ========== ============= =======
Notes to the unaudited interim financial information
7. Right of use assets
Leasehold Fixtures Computer Leasehold
and
property fittings equipment improvements Total
GBP000 GBP000 GBP000 GBP000 GBP000
---------- --------- ---------- ------------- -------
Cost
At 1 August 2020 4,204 142 1,527 584 6,457
Additions - - - - -
Lease remeasurement 227 - - - 227
Disposals - - - - -
Exchange adjustments (65) - - - (65)
At 31 January
2021 4,366 142 1,527 584 6,619
Depreciation
At 1 August 2020 2,609 134 1,440 219 4,402
Charge for year 544 7 16 29 596
Disposals - - - - -
Exchange adjustments (23) - - - (23)
At 31 January
2021 3,130 141 1,456 248 4,975
Net book value
At 31 January
2021 1,236 1 71 336 1,644
At 31 July 2020 1,595 8 87 365 2,055
Leasehold Fixtures Computer Leasehold
and
property fittings equipment improvements Total
GBP000 GBP000 GBP000 GBP000 GBP000
---------- --------- ---------- ------------- --------
Cost
At 1 August 2019 4,362 142 2,815 584 7,903
Lease remeasurement (37) - 64 - 27
Transfers - - (1,305) - (1,305)
Exchange adjustments (121) - (47) - (168)
---------- --------- ---------- ------------- --------
At 31 July 2020 4,204 142 1,527 584 6,457
========== ========= ========== ============= ========
Depreciation
At 1 August 2019 2,260 99 2,265 160 4,784
Lease remeasurement - - - - -
Charge for year 985 35 345 59 1,424
Transfers - - (1,138) - (1,138)
Exchange adjustments (40) - (32) - (72)
---------- --------- ---------- ------------- --------
At 31 July 2020 2,609 134 1,440 219 4,402
========== ========= ========== ============= ========
Net book value
At 31 July 2020 1,595 8 87 365 2,055
========== ========= ========== ============= ========
At 31 July 2019 2,102 43 550 424 3,119
========== ========= ========== ============= ========
Notes to the unaudited interim financial information
8. Called up share capital
As at As at
31 January 31 July
2021 2020
No. No.
----------- ----------
Allotted, called up and fully paid
0.25p ordinary shares 52,743,329 52,743,329
=========== ==========
31 January 31 July
2021 2020
GBP'000 GBP'000
----------- ----------
Allotted, called up and fully paid
0.25p ordinary shares 132 132
=========== ==========
9. Lease liabilities
Leasehold Fixtures Computer Leasehold
and
property fittings equipment improvements Total
GBP000 GBP000 GBP000 GBP000 GBP000
---------- --------- ---------- ------------- --------
At 1 August 2020 1,820 57 88 177 2,142
Additions - - - - -
Interest expense 36 2 41 7 86
Effect of modification
to lease terms 236 - 193 - 429
Lease payments (683) (18) (237) (70) (1,008)
Foreign exchange
movements (45) - (1) - (46)
At 31 January
2021 1,364 41 84 114 1,603
========== ========= ========== ============= ========
Analysis by current and non-current:
Leasehold Fixtures Computer Leasehold
and
property fittings equipment improvements Total
GBP000 GBP000 GBP000 GBP000 GBP000
---------- --------- ---------- ------------- -------
Due within a year 798 41 84 114 1,037
Due in more than
one year 566 - - - 566
1,364 41 84 114 1,603
========== ========= ========== ============= =======
Notes to the unaudited interim financial information
9. Lease liabilities (continued)
Leasehold Fixtures Computer Leasehold
and
property fittings equipment improvements Total
GBP000 GBP000 GBP000 GBP000 GBP000
---------- --------- ---------- ------------- --------
At 1 August 2019 2,444 86 620 298 3,448
Additions 586 - - - 586
Interest expense 78 6 25 23 132
Lease payments (1,204) (35) (543) (144) (1,926)
Foreign exchange
movements (84) - (14) - (98)
At 31 July 2020 1,820 57 88 177 2,142
========== ========= ========== ============= ========
Analysis by current and non-current:
Leasehold Fixtures Computer Leasehold
and
property fittings equipment improvements Total
GBP000 GBP000 GBP000 GBP000 GBP000
---------- --------- ---------- ------------- -------
Due within a year 1,113 31 71 131 1,346
Due in more than
one year 707 26 17 46 796
1,820 57 88 177 2,142
========== ========= ========== ============= =======
10. Financial instruments
Financial assets
Financial assets measured at amortised cost comprise trade
receivables, other receivables, accrued income and cash, as
follows:
As at As at
31 January 31 July
2021 2020
GBP'000 GBP'000
------------ ---------
Trade receivables 3,107 3,116
Other receivables 915 655
Cash at bank and in hand 5,937 8,496
------------ ---------
9,959 12,267
============ =========
Financial liabilities
Financial liabilities measured at amortised cost comprise trade
payables, accruals, other payables and lease liabilities, as
follows:
As at As at
31 January 31 July
2021 2020
GBP'000 GBP'000
----------- --------
Trade payables 1,047 1,912
Other payables 897 404
Accruals 855 789
Lease liabilities 1,603 2,142
4,400 5,247
=========== ========
The Group's activities expose it to a variety of financial
risks:
-- Market risk (including foreign exchange risk, price risk
and interest rate risk)
-- Credit risk
-- Liquidity risk
The financial risks relate to the following financial
instruments:
-- Cash and cash equivalents
-- Trade and other receivables
-- Trade and other payables
Risk management is carried out by the directors. The directors
identify and evaluate financial risks and provide principals for
overall risk management.
(a) Credit Risk
Credit risk is the risk of financial loss to the Group if a
customer fails to meet its contractual obligations. The Group is
mainly exposed to credit risk from credit sales. It is Group
policy, implemented locally, to assess the credit risk of new
customers before entering contracts.
Notes to the unaudited interim financial information
10. Financial instruments (continued)
(b) Market risk
(i) Foreign exchange risk
Foreign exchange risk arises because the Group operates in the
United Kingdom and the United States of America, whose functional
currency is not the same as the presentational currency of the
Group. Foreign exchange risk also arises when individual companies
within the group enter into transactions denominated in currencies
other than their functional currency. Such transactions are kept to
a minimum either through the choice of suppliers or presenting
sales invoices in the functional currency.
Certain assets of the group companies are denominated in foreign
currencies. Similarly, the Group has financial liabilities
denominated in those same currencies. In general, the Group seeks
to maintain the financial assets and financial liabilities in each
of the foreign currencies at a reasonably comparable level, thus
providing a natural hedge against foreign exchange risk and
reducing foreign exchange exposure to a minimal level.
(ii) Interest rate risk
The Group's interest rate exposure arises mainly from the
interest-bearing borrowings. All the Group's facilities were
floating rates excluding interest from leases, which exposed the
group to cash flow risk. As at 31 January 2021 there are no loans
outstanding. Therefore, there is no material exposure to interest
rate risk
(c) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient
cash flows for operations. The Group manages its risk to shortage
of funds by monitoring forecast and actual cash flows. The Group
monitors its risk to a shortage of funds using a recurring
liquidity planning tool.
11. Post balance sheet events
There have been no post balance sheet events of any
significance.
Since the end of the period the Group has continued to enter
into new contracts with both existing and new customers and has
continued to see an increase in underlying occupancy of customer
sites.
As at 31 January 2021 the Group had cash reserves of GBP5.9m.
Given the mission-critical nature of the Group's software and
services, the commitments that its customers have in terms of their
own site delivery plans and the recurring and contracted nature of
the majority of the Group's revenue, management continues to expect
its customers to meet their financial commitments to the Group.
UNAUDITED INTERIM FINANCIAL INFORMATION OF ESSENSYS PLC
GROUP
INDEPENDENT REVIEW REPORT TO ESSENSYS PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 January 2021 which comprises the consolidated
statement of comprehensive income, the consolidated statement of
financial position, the consolidated statement of changes in equity
and the consolidated cash flow statement.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the Company's annual
accounts having regard to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
July 2021 is not prepared, in all material respects, in accordance
with the rules of the London Stock Exchange for companies trading
securities on AIM.
UNAUDITED INTERIM FINANCIAL INFORMATION OF ESSENSYS PLC
GROUP
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on AIM and for no other purpose. No person is entitled to rely on
this report unless such a person is a person entitled to rely upon
this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability
BDO LLP
Chartered Accountants
London
22 March 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
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