Smart Buildings

essensys Flexible Workspace Technology Business & 2022 New Financials Examined

In this Research Note, we examine the flexible workspace technology business of essensys, based on their full-year results announcement of 18th October 2022, investor presentations, annual report and activities throughout the year. Listed on the AIM market of the London Stock Exchange since 2019, Essensys provides a SaaS platform and on-demand cloud services which are the foundation from which landlords and flexible workspace providers can deliver digitally enabled buildings, spaces and portfolios for the commercial real estate market. The essensys Platform has been developed to help solve the challenges faced by landlords and flexible workspace operators as they grow and scale their operations. The essensys Platform addresses these challenges, through the automated provisioning and management of in-building networks and reduces costs by simplifying the day-to-day management of flexible and digitally enabled space. It helps their customers to deliver a simple, secure and scalable proposition, responding to changing occupier demands, providing seamless occupier experiences, and realising smart building […]

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In this Research Note, we examine the flexible workspace technology business of essensys, based on their full-year results announcement of 18th October 2022, investor presentations, annual report and activities throughout the year. Listed on the AIM market of the London Stock Exchange since 2019, Essensys provides a SaaS platform and on-demand cloud services which are the foundation from which landlords and flexible workspace providers can deliver digitally enabled buildings, spaces and portfolios for the commercial real estate market.

The essensys Platform has been developed to help solve the challenges faced by landlords and flexible workspace operators as they grow and scale their operations. The essensys Platform addresses these challenges, through the automated provisioning and management of in-building networks and reduces costs by simplifying the day-to-day management of flexible and digitally enabled space. It helps their customers to deliver a simple, secure and scalable proposition, responding to changing occupier demands, providing seamless occupier experiences, and realising smart building and ESG ambitions.

essensys Results Presentation, 18th October 2022

Group revenue for year ending 31st July 2022 increased 6% to £23.3 million. Annual recurring revenues were up 11% and currently account for 86% of total sales. The group achieved strong growth in the US (+17%), their largest market opportunity while UK revenues were down 8%, reflecting churn of low-value customers and a one-off customer insolvency. The US now accounts for 57% of Group revenue.

The Group made a loss before tax for the year of £11.1m (2021: loss of £2.9m). The year-on-year change is primarily as a result of the investment in the Group to deliver the growth plans.

At the end of FY22 the group employed 180 personnel directly, primarily in the UK and US but with personnel also based in Singapore, Hong Kong, Australia, France and the Netherlands.

essensys has evolved its client base in 2022 replacing small operators with strategic customers that will be able to deploy their products and services in at least 20 sites and therefore deliver in excess of £1m of annual recurring revenue.

Key strategic customers include JLL, Hines, Industrious, Carr Workplaces and Tishman Speyer. They serve customer locations across the world including, Australia, Dubai, Sweden, France and Brazil as well as in their core markets of the USA and the UK.

essensys Results Presentation, 18th October 2022

essensys considers itself as strongly positioned to take advantage of growth in the flexible workspace market, which is expected to increase at a CAGR of 31% between 2020 and 2030, according to JLL. essensys’ long-term growth plan is to increase its market share by 10% from current levels to an overall market share of 17% by 2030 in its key territories.

However, whilst their long-term ambitions are unchanged, essensys has moderated their growth targets this year and adopted a more selective approach to investment, targeting high-value strategic customers, in order to focus on a return to profitability by 2024 or 2025.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

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