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 announce the following trading update ahead of its audited results for the year ended 30 June 2019 (the “Period”), which are expected to be announced on 17 September 2019.
· Group revenue growth of 23% to £16.9m (2018: £13.8m)
· EBITDA* of £0.7m (2018: EBITDA loss of £(2.0)m), ahead of the Board’s expectations
· Net debt of £(1.2)m at 30 June 2019 (30 June 2018: £0.4m net cash), better than management expectations and £0.6m net cash generated in H2 2019
· Eagle Eye AIR platform revenue growth of 32%, being 94% of Group revenue (2018: 88%)
· Recurring revenue, from subscription fees and transactions over the network, represented 71% of total revenue (2018: 77%), due to higher one-off implementation fees with larger clients
· Customer churn reduced to 0.8% (2018: 1.7%)
· 5 year contract signed with Waitrose & Partners
· Redemption and interactions were 847m for the Period (2018: 404m), a 110% increase
· Board remains confident in the ongoing success of the business
All financials based on unaudited figures.
All financials have been re-stated under IFRS15 & 16*EBITDA has been adjusted for the exclusion of share-based payment charges along with depreciation, amortisation, interest and tax from the measure of profit.
We are delighted to report on a Period of significant progress, in which we have broken through to EBITDA* profitability, generated cash in the second half of the year and considerably expanded the reach and capabilities of the business.
Revenue grew in the year by 23% to £16.9m (2018: £13.8m), with revenue generated by the AIR platform growing by approximately 32%, to represent 94% (2018: 88%) of total revenue for the Period. This has been driven by delivering on our ‘Win, Transact, Deepen’ customer strategy; growth from the impact of new client wins, transaction growth from brand and audience network activity, together with continued deepening of other existing customer engagements.
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. Other customers to join the platform include Dobbies, Lyle & Scott and a number of premium F&B brands.
Redemption and interactions (‘AIR volumes’) were 847m for the Period (2018: 404m), a 110% increase compared to the prior year, predominantly driven by the deepening of our relationships with Tier 1 retailers including the continued expansion of Loblaw’s PC Optimum loyalty programme.
The growth in revenue, combined with the challenge we have set ourselves this year of running the business ‘Better, Simpler, Cheaper’ has resulted in the breakthrough to an EBITDA* profit of £0.7m (2018: loss of £(2.0)m). This has been delivered ahead of the Board’s expectations, due to careful management of costs against our opportunities.
We are making good progress in our transition to the Google Cloud Platform (“GCP”), our lead ‘Better, Simpler, Cheaper’ initiative. A successful move of our UK test environment in February was followed in June by the smooth transition of the UK production environment to GCP. We have started the US data centre transition that we expect to complete during FY 2020. This initiative will enable the next stage of scaling and allow growth internationally, with far lower up-front cost requirements.
Cash consumption over the year was also better than management expectations, resulting in a £0.6m reduction in the Group’s net debt position in the second half of the year to £(1.2)m at the end of the Period (31 December 2018: net debt of £(1.8)m).
The Board believes that 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.
Tim Mason, Chief Executive of Eagle Eye, said: “We are delighted to announce a positive end to a successful year. We have delivered our first EBITDA* profit and generated £0.6m of cash in the second half of the year, while expanding the reach and capabilities of the business. Our customers see the Eagle Eye AIR platform as a key part of competing in today’s digital retail environment. The proven value of our platform, combined with high levels of recurring revenue, increasing transaction volumes and a significant sales pipeline, means we enter the new year with confidence.”