Eagle Eye Solutions Group PLC Trading Update (5205V)

TIDMEYE

RNS Number : 5205V

Eagle Eye Solutions Group PLC

31 January 2017

31 January 2017

Eagle Eye Solutions Group PLC

("Eagle Eye", "Group" or the "Company")

Trading Update

Strong operational progress and accelerating momentum

Eagle Eye, the SaaS technology company that validates and redeems digital promotions in real-time for the grocery, retail and hospitality industries, is pleased to announce the following trading update ahead of its unaudited interim results for the six months ended 31 December 2016 (the "Period").

Financial Highlights*:

-- Group revenue increased by c.72% to GBP5.1m (H1 2016: GBP3.0m) and ahead of market expectations of GBP4.8m

   --      Accelerating revenue growth half-on-half, 44% H1 2017 on H2 2016 (H1 FY16 to H2 FY16: 19%) 
   --      Redemption volumes of 25.2m, an increase of 81% (H1 2016: 13.9m) 
   --      SMS volumes of 19.0m, an increase of 2% (H1 2016: 18.8m) 

-- Revenue from subscription fees and transactions over the network represented 66% of total revenue in H1 2017 (H1 2016: 84%)

   --      Net debt position expected to be GBP0.2m (June 2016: Cash of GBP1.3m) 

* Based on unaudited figures

Trading

During the first half of FY2017 the Group has continued to trade well delivering revenue of GBP5.1 million, a 72% increase on the prior year and 6% ahead of market expectations of GBP4.8m. The pace at which the Group is growing has significantly accelerated with the half-on-half revenue growth rate when compared to H2 FY16 at 44% (H1 FY16 to H2 FY16: 19%).

Overall AIR platform revenue of GBP4.3m represented 85% of total revenue, up from 68% in the comparable prior year period (H1 FY16: GBP2.0m), driven by the deepening of our tier 1 customer relationships and increased transaction revenue from existing customers.

Total redemption volumes for the Period increased by 81% to 25.2million (H1 2016: 13.9 million). This growth followed Asda's nationwide roll-out in February 2016 which continued to favourably impact redemption volumes on the AIR platform. During the Period, Asda acted as a nationwide redemption channel to run an effective campaign with Coke Zero Sugar, generating a redemption rate of over 10%. This demonstrates Eagle Eye's ability to successfully drive higher redemption rates through the power of digital. Eagle Eye has also run several successful digital campaigns through our food and beverage network with leading drinks brands including Sol, Desperados and Bulmers.

The balance of revenue is generated from messaging services. Despite the Public Health England Stoptober campaign not including an SMS element this year, SMS volumes increased 2% to 19.0m (H1 16: 18.8m). Overall messaging revenue fell to GBP0.8m (H1 16: GBP1.0m) reflecting the lower margin on new contract wins between the periods.

Revenue generated from subscription fees and transactions over the network represented approximately 66% of total revenue in H1 2017 (H1 2016: 84%). This reflects the progress we are making in deepening Eagle Eye's system capability within major accounts, which will open up recurring transactional revenues in future Periods.

The Group has continued to make progress in increasing the number of retailers and brands using the Eagle Eye AIR platform, which as at the end of H1 2017 has 215 live users including 70 brands (H1 2016: 190, including 56 brands).

The Group's net debt position at the end of the Period was in line with Board expectations at GBP0.2 million (30 June 2016: Cash of GBP1.3 million).

Tim Mason, Chief Executive, said:

"The Group has continued to trade well in the first half of the year, accelerating its growth and delivering revenue ahead of expectations.

This reflects a period of strong operational progress where we have continued to deepen our tier 1 customer relationships and increase transactions through the platform. This strong operational momentum gives the Board confidence in the Group's prospects including delivering expectations for the full year.

We look forward to providing a full update on the half year's trading and strategy when we announce our half year results in March."

 
 For further information, please contact: Eagle Eye 
 Tim Mason, Chief Executive Officer         Tel: [phone] 
  Lucy Sharman-Munday, Chief Financial 
  Officer 
 
   Investec (Nominated Advisor and Broker) 
 Dominic Emery/ David Anderson, Corporate   Tel: [phone] 
  Finance 
 Matt Lewis, Corporate Broking 
 
  Hudson Sandler 
 Nick Lyon/Alex Brennan                     Tel: [phone] 
 
   Information on Eagle Eye 
   www.eagleeye.com 
 

Eagle Eye is a leading SaaS technology company that securely validates and redeems digital promotions in real-time for the grocery, retail and hospitality industries.

The Company's digital marketing platform, Eagle Eye AIR, enables the secure, real-time, multi-channel issuance, management and redemption of digital promotions and rewards, replacing previously used paper-based methods. Our Eagle Eye platform creates a network effect between merchants, distributors and brands enabling stronger connections and value to all parties. Through our four products we enable brands and merchants to reduce cost, improve their customer offer and accelerate their innovation.

The Company's current customer base comprises leading names in UK grocery, retail and hospitality including Asda, J Sainsbury, Greggs, JD Sports, Ladbrokes, Marks & Spencer, Mitchells & Butlers, Pizza Express, Tesco and Thomas Pink.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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January 31, 2017 02:00 ET (07:00 GMT)