TIDMSMRT
RNS Number : 9237R
Smartspace Software PLC
11 March 2021
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
11 March 2021
SmartSpace Software Plc
("SmartSpace" or the "Company" or the "Group")
Trading Update for the Full Year Ended 31(st) January 2021
and Reinstatement of Guidance
SmartSpace Software Plc, the leading provider of 'Integrated
Space Management Software' for smart buildings, today publishes an
update on trading and the expected financial performance of the
Group for the full year ended 31(st) January 2021.
Key highlights
-- Full year revenues expected to be approximately GBP4.6m (FY20: GBP5.1m)
-- SaaS revenues of GBP2.3m up by 73% YOY and ARR up 60% to GBP2.9m
-- Cash at year end of GBP4.5m
-- Market guidance reinstated for FY22 & FY23
-- SwipedOn
o 4,735 customers across 6,741 locations
o ARPU up by 18% to NZ$91.90
-- Space Connect
o Evoko Naso now shipping and first revenues recognised
During the first six months of the year, and as announced In the
Company's interim results on 6(th) October 2020, recurring revenues
comprising SaaS and software maintenance revenues increased by 39%
compared with the same period in FY20. This rate of growth has
further accelerated in the second half of FY21 with full year
recurring revenues expected to increase by more than 73% compared
to FY20.
The Board expects Group revenue for FY21 to be approximately
GBP4.6m (FY20: GBP5.1m) of which approximately GBP2.3m is revenue
from SaaS (FY20: GBP1.32m). Group ARR at the end of FY21 is GBP2.9m
(FY20: GBP1.8m), an increase of 60%.
Cash at the year end was GBP4.5m. A further GBP0.4m is due in
March 2021 in respect of the sale of the enterprise software
division completed in August 2020. Following the completion of the
year end the Board is now able to reinstate guidance for the year
ending 31(st) January 2022 and 2023.
SwipedOn
Underpinning this success has been the 53% increase in annual
recurring revenue ("ARR") in SwipedOn, from GBP1.78m (NZ$3.64m) at
31(st) January 2020 to GBP2.73m (NZ$5.22m) at 31(st) January
2021.
SwipedOn added 1,354 new customers and 2,105 new locations in
FY21 bringing the total number of customers to 4,735 across 6,741
locations. The average revenue per user per month ("ARPU") has
increased by 18% to NZ$91.90. The average number of locations per
customer is up from 1.36 to 1.42. SwipedOn has seen an increase in
revenue churn up from 4.4% since the beginning of FY21 or 5.7% at
the half year to 7.3% at the year end, primarily as a result of the
impact of Covid-19. The majority of customers that churn tends to
be those on the Starter Plan and consequently of lower value.
Evoko Naso
December 2020 saw the release of Evoko Naso, Evoko's next
generation meeting room solution powered by Space Connect . Evoko
Naso is now shipping and Evoko is working with their partners to
raise awareness throughout their sales channels around the globe.
We have invoiced for initial sales and have also recognised the
first revenues from Evoko Naso since December 2020. We are
encouraged by the feedback from Evoko's partners and customers,
which has been very positive. The Directors remain of the belief
that the relationship with Evoko has the potential to generate
significant future revenues for the Company.
Space Connect
As previously outlined, our strategy is to build a channel sales
network for Space Connect. Our partnership with Softcat continues
to deliver new customers and revenue expansion from existing
customers with our sales pipeline growing strongly since our last
update in December 2020. Despite being affected by the recent
lockdown in the UK, we continued to engage with Softcat customers
and our list of prospects grew during this period.
We have also received confirmation of our first Space Connect
order through our Far East partner ESCO, who signed a customer
through its local office in the Philippines. We are currently
engaged with other ESCO prospects in Asia, including clients out of
the ESCO India office.
It is encouraging to see such positive progress against a
backdrop of prolonged periods of extended lockdown in the UK and
working from home requirements in many other geographical markets,
as a result of Covid-19.
Anders & Kern
As highlighted in earlier trading updates, Anders & Kern
("A+K") has not yet returned to pre-Covid 19 levels with many
offices in the UK not fully reopened since the first lockdown in
March 2020. As a result, A+K has seen a 38% fall in non-recurring
revenues compared to FY20 but the impact on profitability has been
mitigated where possible by cost reductions. A+K continues to
maintain tight cost controls with the office closed since the
beginning of the second national lockdown in November 2020 and with
most of the A+K staff on furlough for the last quarter of FY21.
Current Trading and Outlook
Our markets in Australia and New Zealand remain strong. The US
has also held up well, apart from a temporary reduction in sales
capacity for a short period in February 2021 due to the bad weather
that hit Austin, Texas, where our team is based. The US team is now
fully up and running again. We are beginning to see the green
shoots of recovery in the UK following the publication of the UK
Government's roadmap out of lockdown. There has been a noticeable
increase in activity since the Government announced the roadmap and
customers are now again turning their attention to preparation for
returning to the office in a controlled and Covid-secure manner,
which the Company's products are ideally poised to assist with. We
received a flurry of Space Connect orders at the end of February
for projects that had been delayed during the most recent
lockdown.
Our focus for the current year is to maintain momentum in both
ARR and ARPU growth. Reflecting the increased functionality of the
product, we implemented a price increase for new customers at
SwipedOn on 1(st) February 2021 and we expect this to have a
significant beneficial impact on ARPU this year. We are focussing
our sales efforts on higher value customers in the mid-market where
there is potential for revenue expansion through cross-sell and
multiple location sales. This is already bearing fruit and in
February 2021, we closed a 49-location deal with a new Canadian
client. We have seen healthy expansion revenue for other
significant SwipedOn customers. We are also engaged with our first
customers for our recently launched SwipedOn Desks product and are
encouraged by both the feedback and the potential ARPU value of
these clients. Churn has stabilised and at the beginning of March
had not risen above the levels reported above.
We have an exciting pipeline of opportunities for Space Connect
in the UK, the Far East and Australia. Space Connect continues to
win expansion revenue from existing customers as they deploy across
their estates. Getting back to the office and helping businesses
create Covid-secure environments is now a priority for our
partners. The recent announcement of the roadmap out of lockdown
has been a major catalyst, and we expect this focus to drive sales
in the coming months. Our technical team are working closely with
Evoko on a number of significant opportunities they have for Evoko
Naso with some major international brands. Now that there is a
clear pathway to returning to the office, we expect the recent
momentum to continue.
We have now started to plan and, in some cases, deploy A+K
projects that had been put on hold during the current lockdown and
we expect to recognise this revenue in March and April. There has
been a considerable uptick in interest from A+K partners, in
particular for desk management solutions. A+K distributes Evoko
products and the sales team are undertaking an increasing number of
demonstrations of Evoko Naso which has resulted in a rapidly
building sales pipeline.
Commenting on the trading update, Frank Beechinor, CEO of
Smartspace said:
"Whilst it has been a difficult year for many, we are pleased
with how we have weathered the turbulent conditions. The third
lockdown in the UK has had a short-term impact on our progress, but
we are encouraged by the increase in sales pipeline activity since
the Government's announcement on the roadmap out of lockdown. There
are frequent articles in the media on Covid-safe workplaces, hybrid
working and returning to the office and this is reflected in our
sales enquiries as we offer solutions to help our clients manage
this transition.
In FY22 our focus will be on maintaining the momentum on growth
in ARR. The recent price increase along with SwipedOn Desks and
enhanced features will be major catalysts for achieving our growth
objectives. We are very encouraged by the feedback on Evoko Naso
and are optimistic for the prospects as FY22 progresses and offices
start to reopen around the world.
We are also pleased to reinstate guidance back in the market.
Investors can now clearly see the potential of SmartSpace, as we
continue to push forward in delivering future significant growth
across the Group ."
Enquiries
SmartSpace Software Plc via Lisa Baderoon
Frank Beechinor (CEO) - Head of Investor
Bruce Morrison (CFO) Relations
Lisa Baderoon (Head of Investor Relations)
lbaderoon@smartspaceplc.com +44(0) 7721 413
496
N+1 Singer (NOMAD & Joint Broker)
Shaun Dobson, Head of Corporate Finance
Alex Bond, Corporate Finance
Tom Salvesen, Corporate Broking +44 (0)20 7496 3000
+44 (0) 20 7523
Canaccord Genuity (Joint Broker) 8000
Adam James
Georgina McCooke
About SmartSpace Software Plc
SmartSpace Software Plc is a SaaS-based technology business,
designing and building smart software solutions. The Company's
software solutions in workspace help transform employee and
customer engagement with modules which include desk management,
meeting room management, wayfinding, car parking, visitor
management, and analytics.
The three operating companies in the Group comprise:
-- Space Connect - SaaS Meeting Room and Desk booking (www.spaceconnect.co)
-- SwipedOn - SaaS Visitor Management (www.SwipedOn.com)
-- Anders & Kern - distribution and technical support (www.anders-kern.co.uk)
For more information go to: www.smartspaceplc.com
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