Trading Update

RNS Number : 8674N

Eagle Eye Solutions Group PLC

03 February 2016

 

03 February 2016

Eagle Eye Solutions Group PLC

("Eagle Eye" or "Group")

Trading Update - Progress against strategic milestones

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 2015 (the "Period").

Highlights for the Period:

·      Revenues grown by 30% to £3.0m (H1 2015: £2.3m)*

·      Transactional AIR platform revenues up 108% year-on-year at £1.6m

·      Subscription and transactional revenues represent 84% of total revenues (H1 2015: 81%)

·      Total customer and brand count at 190 (H1 2015:110)

·      Major contract award with Sainsbury's for the deployment of Eagle Eye AIR across all channels

·      Redemption volumes up 67% year-on-year to more than 13.9m (H1 2015: 8.3m)

·      Asda live in majority of stores

·      Solid cash position at £2.7m (H1 2015 £1.4m), ahead of expectations

*Based on unaudited figures

Post period highlights

·      Tim Mason appointed as Non-Executive Chairman

·      Wins major international contract with Loblaws Inc. ("Loblaw") to deploy the Eagle Eye AIR platform

Trading

During the first half of FY2016 the Group has continued to trade well delivering revenue of £3.0 million, an increase from the prior year of 30%. Overall AIR platform revenue of £2.0m represented 68% of total revenue, up from 48% in H1 15, however most pleasingly AIR transactional revenues of £1.6m represented a growth of 108% from H1 2015. This was driven by the impact of new tier 1 customer wins and increased transactional revenue from existing customers.

Messaging revenue of £0.9m fell by 19% due to a decrease in messaging volumes as a result of changes to the way messages are delivered for our key client. However, the shortfall is expected to be recovered through new customer wins.

Our progress in digital promotions has helped drive our primary KPIs. Revenue generated from subscription fees and transactions over the network grew to represent approximately 84% of total revenue for the first half of FY2016, up from 81% in H1 2015. Redemption volumes on the AIR platform increased by 67% year on year to more than 13.9 million vouchers (H1 2015: 8.3 million).This significant growth has been driven towards the end of the period by Asda going live in the majority of UK stores.

The Company's progress against key strategic milestones remains on track and in respect of international development ahead of expectations. However revenue for the first half of FY2016 was lower than management expectations, primarily as a result of a delay in certain contract implementations, the shortfall in messaging revenue and the phasing of new business wins. Nevertheless, the roll out into Asda stores and our earlier than expected major international contract award demonstrates we are continuing to successfully source new opportunities.

The cash position at the end of the Period of £2.7m was significantly ahead of management's expectations due to a higher than expected R&D tax credit and strong management of working capital.

Customers

The Group has also continued to make good progress in increasing the number of retailers and brands using the AIR platform, which as at the end of the period boasted 190 live users (H1 2015: 110). FMCG brands now account for 56 of the total 190 live users (H1 2015: 0) on AIR.

During H1 2016 the Company notably added a major contract with Sainsbury's, which together with Asda account for more than 30% of the UK grocery market.

Post the Period end, the Company has signed its first international tier 1 grocer, Loblaw, for deployment of the AIR Platform. This signing of a multi-year deal with a client of this calibre is a major milestone in the Company's growth and was achieved earlier than management expectations. Having three of the world's top retailers signed up to Eagle Eye is a major endorsement of the benefits that the AIR platform delivers to our customers and will help accelerate future growth.

People

After the Period, Tim Mason joined the Board as Non-Executive Chairman. He has over 30 years' experience within the grocery and retail industries, with a strong background in strategic marketing and customer loyalty. His experience will be invaluable as Eagle Eye builds on its foundations to influence the UK market and expand internationally. 

Phill Blundell, Chief Executive, said: "I am pleased with the strategic progress Eagle Eye has made in the first half of the year. The AIR platform has demonstrated significant growth in both transactions on our network and in revenue growth which reflects the structural market shift to the digital delivery and validation of promotions and loyalty.

Our success in signing another two tier 1 grocers clearly demonstrates the value our platform brings to our customers. Our recent significant international win is a major milestone for our Company and provides a significant opportunity for growth into a new important territory

I look forward to announcing further strategic progress alongside our interim results in March."

For further information, please contact:

Eagle Eye

Phill Blundell, Chief Executive Officer

Lucy Sharman-Munday, Chief Financial Officer                                                        Tel:  [phone]

Panmure Gordon

Fred Walsh/Fabien Holler /Duncan Monteith, Corporate Finance

Charles Leigh-Pemberton, Corporate Broking                                                           Tel: [phone]

Hudson Sandler

Nick Lyon/Alex Brennan                                                                                         Tel: [phone]

Information on Eagle Eye

www.eagleeye.com

About Eagle Eye

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 UK promotions market is currently transitioning through substantial change as both retailers and consumers are moving away from paper and plastic to digital. Last year there were in excess of 730 million coupons redeemed in the UK¹, and 16 billion digital coupons redeemed worldwide².

The Eagle Eye AIR platform comprises four key products: Eagle Eye Promote - for the management of offers and promotions, Eagle Eye Gift - for gift cards and customer care, Eagle Eye Reward - for loyalty and reward schemes and Eagle Eye Engage - for digital messaging. These four products enable the Company's customers to deliver targeted promotions, gift vouchers and rewards to consumers in real time, in a simple and secure way, across multiple marketing communications channels including email, SMS messaging and loyalty apps. The promotions can be redeemed securely by the consumer through any enabled point of sale channel.

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

The Group is headquartered in Guildford and has an office in Manchester.

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¹ Source: Valassis 2014

² Source: Statista 2014

 

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