TIDMVRE
RNS Number : 5345M
VR Education Holdings PLC
22 January 2021
For immediate release 22 January 2021
VR Education Holdings plc
('VR Education' or the 'Group')
FY20 Trading Update
Launch of Medium Term Outlook
VR Education (AIM: VRE; Euronext Growth: 6VR) a leading virtual
reality ('VR') technology company focused on becoming the world's
largest crossed reality ('XR') communications, training and virtual
events platform provider, through commercialisation of ENGAGE, its
proprietary online virtual communications platform, is pleased to
provide a trading update for the year ended 31 December 2020
('FY20') and also to announce the launch of its medium term
financial objectives for the period 2023 to 2025.
FY20 Trading
-- FY20 revenue expected to be circa EUR1.42 million, an
increase of 38% on the prior year (FY19: EUR1.02 million):
o ENGAGE revenue and user base up by 550% and more than 700%
respectively, now accounting for more than 40% of Group revenues
(FY19: 9%). This is in line with the ENGAGE growth plan, with
strong momentum carried into FY21
o Continued popularity of non-ENGAGE revenues from Showcase
Experiences with Shuttle Commander released on the Oculus Quest
platform in September 2020 and on PC based VR devices via the Steam
network in November 2020. Showcase Experience revenues were however
EUR400k below expectations due principally to COVID related museum
closures in the US
-- Launch of ENGAGE Mobile to support Android phones and tablets
in July 2020, and an iOS version to support iPhones and iPads in
December 2020, which allows the ENGAGE virtual event hosting
solution without a user requirement for a VR headset or device.
ENGAGE successfully hosted events in 2020 for Facebook, Vodafone,
Xprize, the European Commission, Yahoo, Fidelity Investments and
HTC
-- ENGAGE partnership with HTC went live in the China region
with ENGAGE China being marketed to HTC clients as Vive Sessions
and first revenues from the partnership expected by the end of H1
2021
-- Official release of ENGAGE on the Facebook/Oculus Quest Store
in November 2020 with Facebook now an official user of the ENGAGE
platform and ENGAGE is now available to a global audience, easy to
install on a range of platforms and devices
-- Substantial ENGAGE product development achieved with added
functionality enabling enterprise clients to use ENGAGE for remote
team collaboration and meetings, presenting a substantial
opportunity for the Group in addition to education
-- Year end cash balance of EUR2.03 million, with net monthly
cash burn of approx. EUR0.2 million
Medium Term Outlook
Based on strong traction from over 60 commercial deals signed to
use the ENGAGE platform and an expanded product offering in the
market in 2020, VR Education is also announcing today the launch of
its medium-term financial objectives for the period 2023 to 2025
('Medium Term Outlook'):
-- Target of reaching EUR10 million annual ENGAGE revenue
milestone, 500 active Enterprise customers and 100,000 monthly
users during 2023 - 2025:
o Annual ENGAGE revenue CAGR in excess of 100%
o 10% average month-on-month increase in users to reach 100,000
monthly users, reflecting a target 500 active Enterprise
customers;
o Customer retention rate of 80%+; and
o Growth in average annual contract value to EUR20,000+,
reflecting the nature of emerging Enterprise client base and
optimal contract value
-- Target Group gross margin in excess of 80%
The Group will provide further details on the Medium Term
Outlook to analysts and investors with the Preliminary Results
intended for release in February 2021.
Outlook for FY21
ENGAGE has proven itself in the market in 2020. With substantial
tailwinds for remote communications platforms as a result of the
Covid-19 pandemic, the Group has had an opportunity to develop
platform functionality and a product suite that resonates with the
target enterprise customers, including educational institutions. As
a result, the past six months has demonstrated the monetisation
strategy of ENGAGE, with over 60 commercial deals signed to use the
platform and the increase in the average deal sizes, with earlier
commercial clients now purchasing further accounts and additional
services leading to larger purchase orders.
With minimal investment in marketing, sales and business
development to date, the Group has closed deals during 2020 in
excess of EUR1.8 million which should be recognised over the next
36 months. The Group has also invested in an additional business
development resource for 2021 and will begin to allocate increased
funding to the marketing and promotion of the ENGAGE platform as
the Group looks to achieve its Medium Term Outlook objectives.
VRE is also excited that its indirect 'go to market' strategy
will start to contribute meaningfully to revenue growth. Following
the deployment of the ENGAGE platform on the Chinese mainland in
collaboration with HTC in late 2020, the Group expects to see the
first revenues generated from this partnership recognised in the
first half of 2021. The Group is focused on identifying further
strategic partnerships to support the business' further growth and
expansion. ENGAGE is now available on many platforms across the
globe, opening up significant opportunities where previously sales
were limited to a small but growing marketplace.
David Whelan, CEO of VR Education, said: "We see 2020 as the
seminal year where ENGAGE has started to take off with thanks to
many different factors including COVID-19, 5G rollout and
standalone VR devices becoming available. What is more exciting in
the medium to long term is the uptake of ENGAGE on traditional
devices such as phones and tablets where we have now enabled
support and expect to see significant uptake throughout 2021 and
beyond.
"Our projections are modest based on past experience, however,
we do feel that growth can expand greatly given the trajectory for
immersive technology adoption over the past twelve months. We see
ENGAGE filling the gap where popular video-based communication apps
are not meeting customer expectations for large group meetings,
events and conferences. ENGAGE is now no longer marketed solely as
an education and training platform. We see ENGAGE as the next step
in corporate communications and remote conferencing."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
- Ends -
For further information, please contact:
VR Education Holdings plc Tel: +353 87 665 6708
David Whelan, CEO contact@vreducationholdings.com
Sandra Whelan, COO
Cairn Financial Advisers LLP (Nominated Tel: +44 (0) 20 7213
Adviser) 0880
James Caithie / Liam Murray / Ludovico
Lazzaretti
Shard Capital Partners LLP (Joint Tel: +44 (0) 20 7186
Broker) 9952
Damon Heath / Erik Woolgar
Davy (Joint Broker & Euronext Growth Tel: +353 1 679 6363
Advisor)
Fergal Meegan / Barry Murphy
Buchanan (Financial PR) Tel: +44 (0)20 7466 5000
Henry Harrison-Topham / Chris Lane VRE@buchanan.uk.com
/ Tilly Abraham
The Directors of the Company take responsibility for this
announcement.
Notes to Editors
VR Education is (AIM: VRE; Euronext Growth: 6VR) is a leading
virtual reality ('VR') technology company focused on becoming the
world's largest crossed reality ('XR') communications, training and
virtual events platform provider. The Irish based Group's core
focus is the commercialisation of its online virtual communications
platform called ENGAGE, which provides a platform for creating,
sharing and delivering proprietary and third-party XR content in
education, training and online events.
On 12 March 2018, VR Education listed on the AIM market of the
London Stock Exchange and on the Enterprise Securities Market, a
market regulated by Euronext Dublin. For further information,
please visit www.vreducationholdings.com.
Forward-Looking Statements
Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are not historical
facts but rather are based on the Group's current expectations,
estimates, and projections about its industry; its beliefs; and
assumptions. Words such as 'anticipates,' 'expects,' 'intends,'
'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions
are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject
to known and unknown risks, uncertainties, and other factors, some
of which are beyond the Group's control, are difficult to predict,
and could cause actual results to differ materially from those
expressed or forecasted in the forward-looking statements.
The Group cautions security holders and prospective security
holders not to place undue reliance on these forward-looking
statements, which reflect the view of the Group only as of the date
of this announcement. The forward-looking statements made in this
announcement relate only to events as of the date on which the
statements are made. The Group will not undertake any obligation to
release publicly any revisions or updates to these forward-looking
statements to reflect events, circumstances, or unanticipated
events occurring after the date of this announcement except as
required by law or by any appropriate regulatory authority.
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END
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