Smartspace Software PLC (AIM:SMRT) had a rollercoaster day as the technology firm reported posted a full-year underlying loss [LBITDA] of £770,000 for the year to January 2023.
Underlying losses, however, improved significantly year-on-year, from a loss of £2.3mln in 2022, as the group’s Swiped On brand, a premium workplace sign-in system, posted its first full-year profit.
Revenues also jumped 48% annually to reach £5mln, having generated £3.4mln in sales in 2022, and after falling at the open the share price subsequently rallied strongly.
Shares in Smartspace opened trading on Tuesday at 54p and fell 14% before recovering again to 52.3p
The London group added it’s planning to spin off its hardware distribution arm, Anders + Kern, to become fully focused on software services.
The discontinued operation brought in revenues of £2mln, but failed to make a profit, costing Smartspace an additional £110,000 in underlying losses.
“With hardware no longer part of the continuing group, the revenues we generate will come at a high gross margin, in keeping with those of high growth SaaS businesses,” Frank Beechinor, chief executive officer at Smartspace, said.
He added that the firm is hoping to launch a new “fully integrated single workplace platform” by the end of the year.
“Barring the impacts of inflation, we expect our cost base to be static which will allow annual recurring revenue growth to feed through to the bottom line, helping to ensure the business is at least cashflow neutral going forwards,” Beechinor concluded.
Free cash flow dropped from £2.7mln in 2022 to £1.9mln over 2023, but the firm forecasts that revenue growth will help sure up reserves until it achieves profitability.