Essensys surges as it swings back to profit

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Essensys PLC (LON:ESYS) shares surged higher on Tuesday as the provider of flexible workspace software swung back into profit in its full year.

In its results for the year ended July 31, the AIM-listed firm reported a pre-tax profit of GBP300,000 compared to a GBP1.4mln loss in the previous year, while revenues jumped 9% to GBP22.5mln.

The firm said that the US had continued to be its major growth driver, with recurring revenues in the market up 45% during the year, while future expansion is underpinned by demand from new and existing customers with 419 live sites for its Connect product at year end, up 17% on the previous year, alongside 31 new customer wins.

Looking ahead, the company said it has “robust visibility” with contracted commitments from customers for a further 47 sites for Connect. The firm also said enquiry levels have increased since August, with 74 potential Connect sites added to its weighted sales pipeline.

New business activity has also recovered to around 75% of the levels seen in the first half of the previous financial year, the group said.

“Essensys delivered a very strong performance in FY20, in line with expectations, with strong organic and recurring revenue growth. This is particularly impressive given the disruption caused by the [coronavirus] pandemic and is a testament to the commitment of our people, and our strategic progress. To capture the long-term growth opportunity in the flexible workspace market, we have expanded the UK based development team and US sales team and launched new products in response to demand for flexible security”, chief executive Mark Furness said in a statement.

“We remain committed to our growth strategy and believe the pandemic has accelerated the shift towards flexible workspace, particularly from traditional landlords and commercial real estate operators. This, combined with robust visibility and sales pipeline, and improving new business activity, give us confidence of further progress in the year ahead, notwithstanding uncertainty relating to [coronavirus]”, he added.

Shares in the firm were 3.7% higher at 142.6p in early trading.

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