26 January 2021
Eagle Eye Solutions Group plc
("Eagle Eye", the "Group", or the "Company")
H1 Trading Update
Strong profit growth and new domestic and international customer wins
Eagle Eye, a leading SaaS technology company that creates digital connections enabling personalised, real-time marketing through coupons, loyalty, apps, subscriptions and gift services, is pleased to provide an update on the Group's trading for the 6 months ended 31 December 2020 ("the Period").
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Recurring revenue (subscription fees and transactions)
Net cash/ (debt) at 31 December
· Good new business "Win" performance in the UK and Internationally, securing Woolworths Group in Australia, Pret a Manger in the UK and a leading speciality office and home products & services retailer in the US
· New business pipeline continues to grow at record levels internationally
· COVID-19-related UK lockdown continues to negatively impact the Group's Food & Beverage, Non-Grocery retail and Brand customer revenue streams
· Considerable increase in adjusted EBITDA1 to £2.1m (H1 2020: £1.3m), ahead of Board expectations
· Strong cash performance, ahead of Board expectations
· Despite the impact of COVID-19, profit for the financial year ending 30 June 2021 remains in line with the Board's expectations
Eagle Eye has had a positive start to the financial year, continuing to deliver for its clients and win new customers, with highlights including the launch of the Pret a Manger coffee subscription service, the winning of a five-year contract with Woolworths Group, the largest retailer in Australia, and securing the Group's second US customer, a leading speciality office and home products & services retailer. These wins demonstrate the enterprise capabilities of the AIR platform and the Group's broadening international reach.
The impacts of COVID-19, and most recently the UK national lockdown 3, continue to negatively impact the Group's UK Food & Beverage and Non-Grocery customers, which accounted for approximately 10% of Group revenue pre-COVID-19. Despite this, Eagle Eye has delivered targeted levels of revenue growth, up 8% to £10.8m in the first half. Additionally, continued careful management of the cost base whilst ensuring the necessary investment in the business continues, resulted in an increase in adjusted EBITDA1 for the Period of 62% to £2.1m (H1 2020: £1.3m).
The Group closed the Period with a net cash position of £0.1m, being ahead of the Board's expectations, following an improved cash performance in the Period, driven by the increase in adjusted EBITDA1. The Group saw a cash outflow in the Period of £1.4m (H1 2020: outflow of £0.9m) due to the unwinding of approximately £1.1m of certain COVID-19 related cash management measures. The Group continues to have access to its undrawn £5m banking facility which, combined with the Group's net cash, is sufficient to support its existing growth plans.
COVID-19 may continue to cause new contract discussions to be extended, and is expected to continue to impact the Group's F&B and Non-Grocery customer segment, causing the Board to remain cautious in its outlook for this segment. However, the careful management of the business, successful new wins in the first half of the year and growth of the existing customer base, mean profit for the financial year ending 30 June 2021 remains in line with the Board's expectations.
Never has digital engagement with consumers been of more relevance to the global retail sector. The
Group's new business pipeline continues to grow at record levels internationally, including multiple enterprise level opportunities, providing the Board with confidence in the ongoing success of the business.
Tim Mason, Chief Executive of Eagle Eye, said: "The pandemic has highlighted the need for retailers to digitally engage with their customers, and yet the digital transformation of the global loyalty, promotion and gift markets is still very much in its infancy. With our growing international customer base we have proven that Eagle Eye has the potential to sit at the heart of this transformation, presenting us with an exciting long-term growth opportunity.
"While it is clear COVID will adversely impact a section of our customer base for the remainder of the financial year, we are confident that we will continue to grow our sales and profits, and our pipeline has never been stronger both in quality and quantity.
"With high levels of recurring revenue, very low levels of customer churn and an expanding customer base, the Board is encouraged by the significantly increased breadth of Eagle Eye's opportunity and believes there is considerable potential for expansion as the situation normalises."
All financials based on unaudited figures
1Adjusted EBITDA has been adjusted for the exclusion of share-based payment charges along with depreciation, amortisation, interest and tax from the measure of profit and is reconciled to the GAAP measure of loss before tax.
For further information, please contact:
Tim Mason, Chief Executive Officer
Lucy Sharman-Munday, Chief Financial Officer
Tel: 0844 824 3686
Investec (Nominated Advisor and Joint Broker)
Corporate Finance: David Anderson / Sebastian Lawrence
Corporate Broking: Sara Hale / Toba Fatimilehin
Tel: 020 7597 5970
Shore Capital (Joint Broker)
Corporate Finance: Hugh Morgan/ Daniel Bush/ Sarah Mather
Corporate Broking: Henry Willcocks
Tel: 020 7408 4090
Caroline Forde, Robyn Fisher, Molly Gretton
Tel: 020 3405 0205
About Eagle Eye
Eagle Eye is a leading SaaS technology company transforming marketing by creating digital connections that enable personalised performance marketing in real time through coupons, loyalty, apps, subscriptions and gift services.
Eagle Eye AIR enables the secure issuance and redemption of digital offers and rewards at scale, across multiple channels, enabling a single customer view. We create a network between merchants, brands and audiences to enable customer acquisition, interaction and retention at lower cost whilst driving marketing innovation.
The Company's current customer base comprises leading names in UK Grocery, Retail and Food & Beverage sectors, including Asda, Sainsbury's, Tesco, Waitrose and John Lewis & Partners, JD Sports, Greggs, Mitchells & Butlers, Pizza Express; in North America, Loblaws, Shoppers Drug Mart, Esso and Southeastern Grocers and in Australia & New Zealand, Woolworths Group and The Warehouse Group.