essensys plc (LON:ESYS) published its Annual Report and Accounts for the year ended 31 July 2023, on 8 November 2023.
Mark Furness, Chief Executive Officer, commented in the Annual Report 2023:
“2023 has been a year of continued progress for the business. Our strategy to target only large landlords and flexible workspace providers is continuing to drive improvements in customer mix, product adoption and revenue quality. The performance of this strategic customer cohort underpins our confidence in our long-term growth plans, with this group delivering strong SaaS metrics whilst providing significant future expansion opportunities. Our accelerated investment into new product development over the past three years is also beginning to deliver results. 75% of all customers have now migrated onto essensys Platform and we are also nearing the full launch of our smart access solution which converges hardware and software to provide a powerful answer to the challenges of delivering access control in a flexible, hybrid world.”
On essensys’ current trading and outlook, Mark added:
“Following our reorganisation, we have a strong operational base to capture demand for flexible workspace and drive profitable long-term growth. We continue to see evidence of structural growth drivers in our market, even in a challenging macro backdrop characterised by delays to sales cycles and capital deployment decisions. Our sales pipeline is growing, underlying customer occupancy appears to be stabilising and both our operator and landlord customers are reporting increased occupier demand for premium flexible space solutions. This is reflected in positive engagement with our large customers about the ability of our products to support their expansion plans. We entered FY24 with contracted new ARR of £1.1m and have continued to sign new deals through the first quarter of FY24.
essensys creates seamless in-building experiences for flexible operations by removing complexity and reducing costs through automation and simplification. With 30% of all office space expected to be flexible by 2030, compared to less than 2% today, the market opportunity remains sizeable. As we look ahead to our 2024 financial year, we are on track to return to run-rate positive Adjusted EBITDA in FY24, with net cash generation expected to follow in FY25. We remain debt-free and have a net cash position of £7.9m at year end.
essensys enters FY24 as a leaner, more efficient business and our momentum with strategic customers and new product developments supports our confidence of further progress in the year ahead.”
Jon Lee, Non-Executive Chairman, noted in his Chairman’s statement:
“In the 2023 financial year our primary goals of delivering our upgraded core product, essensys Platform and taking actions to accelerate our return to profitability and cash generation have been achieved.
It is a credit to all our people at essensys that we have been able to accelerate these programmes – and deliver Adjusted EBITDA ahead of market expectations – while retaining our commitment to delivering quality products for high value customers. In a challenging macro context, particularly for landlords, achieving revenue growth of 9% in FY23 shows the resilience of our model and the underlying demand for flexible workspace solutions.
Inevitably, we have had to take difficult decisions this year to manage our cost base. I would like to thank all of essensys’ people, including those who left us in the last twelve months, for their diligence, persistence and integrity.
As we look ahead to our 2024 financial year, we are on track to return to run-rate positive Adjusted EBITDA in FY24, with net cash generation expected to follow in FY25. We remain debt-free and have a net cash position of £7.9m at year end. We now have a strong platform to drive sustainable growth. essensys remains extremely well placed to take advantage of the increasing demand for flexible workspace, notwithstanding the drag on spend in the current environment. We continue to see opportunities to grow with flexible workspace operators and traditional landlords, as they build their presence in the flexible workspace industry.”
