23 January 2019
Eagle Eye Solutions Group plc
("Eagle Eye", the "Group", or the "Company")
H1 Trading Update
Strong growth continues, with 36% increase in AIR revenue and blue chip client wins
Eagle Eye, the SaaS technology company that allows businesses to create a real-time connection to attract and retain their customers through digital promotions and loyalty services, is pleased to provide an update on the Group's trading for the 6 months ended 31 December 2018 ("the Period").
· Group revenue increased by 26% to £8.2m (H1 2018: £6.5m)
· AIR revenue increased by 36% to £7.6m (H1 2018: £5.6m)
· Adjusted EBITDA loss reduced materially to £(0.5)m (H1 2018: £(1.4)m)
· AIR volumes of 430.7m, an increase of 414% year on year (H1 2018: 83.8m)
· Recurring revenue, from subscription fees and transactions over the network, represented 72% of total revenue (H1 2018: 75%)
· Net debt of £(1.8)m at 31 December 2018 (30 June 2018: £0.4m cash), better than management expectations; sufficient headroom remains within the Group's £5m banking facility to support the Group's existing growth plans
· Blue-chip client wins, Waitrose (post Period end) and Burger King
· Current trading remains in line with the Board's expectations, on track to move to EBITDA profitability
*Based on unaudited figures. These figures have been compiled on a pre-IFRS 15 basis. The implications of the implementation of IFRS 15 'Revenue from Contracts with Customers' which has been adopted in the Period will be discussed in detail in the Company's results for the 6 months ended 31 December 2018, at which point all figures will be re-stated and reconciled for this and the comparative period.
The Group's strong momentum from the prior year has continued during the Period. Revenue growth of 26% to £8.2m (H1 2018, £6.5m), with revenue generated by the AIR platform growing by approximately 36%, to now represent 94% (H1 2018: 86%) of total revenue. This growth has been driven by the impact of new client wins, transaction growth from brand and audience network activity, together with continued deepening of other existing customer engagements.
The challenge we have set ourselves this year of running the business 'Better, Simpler, Cheaper' is now well under way and the initial impact of these initiatives, supported by the growth in revenue, has meant that the Group's adjusted EBITDA loss has reduced materially, to £(0.5)m (H1 2018: £(1.4)m). We remain on track for our move to EBITDA profitability, in line with the Board's expectations.
As is typical for the first half of the year, cash consumption in H1 was higher than the preceding six month period at £2.1m, but lower than the same period in the prior year (H1 2018: £3.0m) and better than management expectations. As a result, the Group's net debt position of £(1.8)m at the end of the Period (30 June 2018: £0.4m cash) was better than management expectations.
The Group's funding position is comfortable and sufficient headroom remains within the Group's £5m banking facility to support the Group's existing growth plans.
Redemption and interactions ('AIR volumes') were 430.7m for the Period (H1 2018: 83.8m), a 414% increase compared to the same period last year, driven by the deepening of our relationships with Tier 1 retailers and the impact of Loblaw's PC Optimum loyalty programme, which launched in H2 2018. The Period also saw the addition of new audience partners, such as Wuntu, Kids Pass and Blue Light Card, giving our customers access to a wider consumer audience to which they can promote.
At the start of the year we set an objective to expand into new sectors. In November 2018 we signed a three-year contract with Burger King UK Group ("Burger King") for 74 outlets, our first quick service restaurant customer, demonstrating the attraction of the platform outside our traditional grocery and food & beverage sectors.
In January 2019 we were excited to announce another new blue-chip client win. We signed a new five-year contract with Waitrose & Partners, who will use the AIR platform to improve their digital marketing proposition, extending our existing relationship with John Lewis & Partners.
We are making good progress in our transition to the cloud, our lead 'Better, Simpler, Cheaper' initiative. This will enable the next stage of scaling and allow growth internationally, with far lower up-front cost requirements. Our AIR platform and Digital Wallet have broad applicability across sectors and we have a growing pipeline of additional opportunities, both in the UK and internationally.
The Group's current trading remains in line with the Board's expections. The growth in revenues and volumes is expected to continue into H2 2019, from the annualisation of Tier 1 contracts, the impact of significant new wins and the strong growth of the audience network. With our recurring revenue remaining high, at 72% of Group revenue, low levels of customer churn and an expanding addressable market opportunity, the Board looks to the remainder of the year with confidence.
Tim Mason, Chief Executive of Eagle Eye, said: "We are delighted to confirm a strong first half of the year, delivering significant revenue growth and expansion of the customer base, including the addition of Waitrose and Burger King. With a growing number of retailers turning to the Eagle Eye AIR platform to create a meaningful connection to their customers, we are excited about the prospects for the business and we are confident in our ability to create increased shareholder value."
All financials based on unaudited figures.
Adjusted EBITDA excludes share-based payment charges along with depreciation, amortisation, interest and tax from the measure of profit.
About Eagle Eye
Eagle Eye, is a leading SaaS technology company, transforming marketing by creating digital connections that enable real-time one-to-one performance marketing through coupons, loyalty, apps, subscriptions and gift.
The Company's digital marketing platform, Eagle Eye AIR, enables the secure issuance and redemption of digital offers and rewards at scale, across multiple channels, enabling a single customer view. Our platform creates a network between merchants, distributors and brands to enable stronger connections and value for all parties, allowing them to reduce cost, improve their customer offer and accelerate their marketing innovation.
The Company's current customer base comprises leading names in UK Grocery, Retail and Food & Beverage, including John Lewis, Waitrose, Asda, J Sainsbury, Greggs, JD Sports, Marks & Spencer, Mitchells & Butlers, Pizza Express, Burger King,Tesco and Loblaw in Canada.
For more information, please visit www.eagleeye.com
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