Eagle Eye Solutions Group PLC Trading Update (5960C)

TIDMEYE

RNS Number : 5960C

Eagle Eye Solutions Group PLC

23 January 2018

23 January 2018

Eagle Eye Solutions Group plc

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

Trading Update

Continued progress against our three strategic pillars

Eagle Eye, the SaaS technology company that allows businesses to create a real-time connection with their customers, is pleased to announce the following trading update ahead of its unaudited interim results for the six months ended 31 December 2017 (the "Period").

Highlights*:

   --      Group revenue increased by c.28% to GBP6.5m (H1 2017: GBP5.1m) 

-- Loblaw to launch largest digital loyalty programme in Canada on 1 February 2018 enabled by the Eagle Eye AIR platform

   --      Redemption volumes of 82.8m, an increase of 228% year on year (H1 2017: 25.2m) 
   --      SMS volumes of 28.6m, an increase of 50% (H1 2017: 19.0m) 

-- Revenue from subscription fees and transactions over the network represented 75% of total revenue in H1 2018 (H1 2017: 66%)

   --      Cash position of GBP0.8m (June 2017: Cash of GBP3.7m) 

* Based on unaudited figures

TRADING

During the Period, the Group's strategy of 'win, transact, deepen', has continued to deliver revenue growth resulting in a revenue increase of 28% to GBP6.5m (H1 2017: GBP5.1m), in line with management's expectations.

Revenue generated from client subscription fees and transactions over the network increased to GBP4.8m (H1 2017: GBP3.4m), representing 75% of total revenue in H1 2018 (H1 2017: 66%), illustrating the start of the transition of our key Tier 1 customers into the next phase of their contracts.

The Group's cash position at the end of H1 FY2018 was ahead of management expectations at GBP0.8m, with the committed GBP3.0m debt facility with Barclays unutilised.

The Group's strong underlying transaction and revenue growth and continued success in the Food and Beverage ("F&B") sector (41% growth against H1 2017), combined with the significant opportunity presented by the imminent Loblaw launch in February 2018, all underpin the Board's confidence of delivering its expectations for the financial year ending 30 June 2018.

WIN

In December 2017, Eagle Eye signed a contract with Boparan, (a group owning brands such as Ed's Easy Diner, Giraffe, Harry Ramsden's and Fishworks) to deliver digital promotions and gift capability through the Eagle Eye AIR Platform. Through Eagle Eye AIR Boparan will be able to deliver the same streamlined digital promotion capabilities across its brands to ensure consistent service levels are delivered to all customers. In addition, Eagle Eye will replace all existing paper gift schemes with a digital offering.

Additionally, in October 2017, Eagle Eye signed contracts with Scottish fashion chain M&Co. and Greene King, the latter further cementing our position in the UK F&B market. These contract wins also benefit our brand partners as our extended redemption network provides greater opportunities to run measurable campaigns.

TRANSACT

Total redemption volumes for the Period increased by 228% to 82.2m (H1 2017: 25.2m) which was primarily driven by Sainsbury's going live in H2 2017. In Q1 2018 further capabilities have been added to include the online channel, meaning a Sainsbury's customer can now receive a coupon instore and redeem it online, as long as the coupon is connected to that customer's loyalty identity, enabling a truly omnichannel experience. This enhancement helped to increase redemption volumes by 135% from H2 2017 to H1 2018 (H2 2017: 35.2m).

Loblaw

On 8 November 2017, Loblaw, Canada's largest retailer announced(1) it will be merging two of Canada's most popular loyalty programs, which separately have 8 million and 11 million members, into a single program, PC Optimum. The program will link analogue and digital channels together through one card, one app and one currency, and is scheduled to go live on 1 February 2018.

The Eagle Eye AIR platform sits at the heart of the PC Optimum loyalty platform and is integrated with Loblaw's channels and systems, enabling a single customer view. Eagle Eye AIR will enable omni-issuance and omni-redemption, allowing customers to receive loyalty offers through their preferred channels.

It is anticipated that from 1 February 2018, the revenue generated from this contract will shift significantly from initial implementation fees to recurring transaction fees.

Issuance Partners

Issuance partners form a key part of our transact strategy and during the period we were delighted to sign several new framework agreements. Most notably our two key partners, Groupon and Google, have started to build momentum during the Period utilising the benefits of the merchant network to extend their redemption capability across multiple sectors.

DEEPEN

During the Period, revenue from the F&B sector grew by 41% against H1 2017. As our F&B clients enjoy the early stage benefits of our digital marketing platform, there is a trend for them to use it more as a direct marketing channel. As a result, we are seeing increased promotional activity across the sector.

There has also been strong growth in SMS volumes which increased 50% to 28.6m (H1 2017: 19.0m) as a result of additional services provided for JD Sports and Paragon. Revenue growth was limited to 18% due to price pressures in a competitive and more mature market.

We are also pleased to also announce the renewal of three longstanding clients within our F&B sector: Greggs (five-year contract), Mitchells and Butlers (three-year contract) and Pizza Express (one-year contract). In all cases the Eagle Eye AIR platform is being used to power an enhanced digital experience for the customer. These renewals reflect the strength of our offering and our lasting client relationships.

Tim Mason, Chief Executive, said:

"The Group has continued to execute on its strategy, delivering revenue growth in H1 2018.

"During the Period we demonstrated good operational progress where we have won new customers and renewed some key contracts, ramped up transactions through the platform, giving an indication of its capacity, and continued to deepen our F&B relationships. Looking forward, we are excited about the imminent Loblaw launch and the further opportunities that this opens for us in the second half of the year.

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

Eagle Eye will announce its interim results for the six months ended 31 December 2017 on 13 March 2018.

For further information, please contact:

 
 Tim Mason, Chief Executive       Tel: [phone] 
  Officer 
  Lucy Sharman-Munday, Chief 
  Financial Officer 
 Investec (Nominated Advisor      Tel: [phone] 
  and Broker) 
  Corporate Finance: David 
  Anderson / Sebastian Lawrence 
  Corporate Broking: Rob Baker 
 Hudson Sandler                   Tel: [phone] 
  Nick Lyon / Hattie O'Reilly 
 Information on Eagle Eye 
  www.eagleeye.com 
 

Eagle Eye is a leading SaaS technology company that allows businesses to create a real-time connection with their customers.

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 John Lewis, Asda, J Sainsbury, Greggs, JD Sports, Ladbrokes, Marks & Spencer, Mitchells & Butlers, Pizza Express, Tesco and Thomas Pink.

Notes:

   1.   Source: http://media.loblaw.ca/English/media-centre/press-releases/press-release-details/2017/Two-of-Canadas-most-popular-loyalty-programs---Shoppers-Optimum-and-PC-Plus---to-come-together-as-the-PC-Optimum-program-increasing-convenience-and-rewards-for-millions-of-Canadians/default.aspx 

This information is provided by RNS

The company news service from the London Stock Exchange

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January 23, 2018 02:00 ET (07:00 GMT)