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In this Research Note, we examine the SmartSpace Software group, based on their trading update providing unaudited results for financial year ending 31 January 2023 and their investor conference of 9th February 2023.
SmartSpace Software Plc is a UK-based provider of workplace management software for smart buildings and commercial spaces, with revenues under $10 million. The group’s offerings include software for visitor and employee management, desk and meeting room booking and analytics modules. The company is listed on the London Stock Exchange’s AIM market.
SmartSpace Financial Highlights
The Group has been progressing toward its objective to build a high-growth SaaS business with strong recurring revenues.
- Revenue for the year ended 31 January 2023 up 36% to £7.0m (FY22: £5.1m).
- Continued momentum of Annual Recurring Revenue (ARR) up 26% year on year to £5.8m as at 31 January 2023 (FY22: £4.9m or £4.6m on a constant currency basis).
- Strong growth in recurring revenue up 45% to £4.9m (FY22: £3.4m).
SwipedOn
A visitor management software vendor, headquartered in Tauranga, New Zealand, and acquired in October 2018, is the major contributor to the Group.
“SwipedOn has performed well in the past year with growth in ARR and locations. November was its busiest month in over a year for new customer sign-ups and we have seen churn decline, particularly from users who signed up during Covid for social distancing rule enforcement. SwipedOn continues to be cash generative and will now be reporting its first full year EBITDA profit, a significant milestone to achieve”. Frank Beechinor, CEO of SmartSpace, commented
- SwipedOn ARR increased by 29% year on year to £5.0m at 31 January 2023 (FY22: £4.2m or £3.9m on a constant currency basis).
- Monthly average revenue per user increased by 31% year on year to $171 (£90) at year end (FY22: NZ$154 (£75) or NZ$133 (£69) on a constant currency basis).
- SwipedOn locations increased to 8,298 as at 31 January 2023 (FY22: 7,076).
- SwipedOn's largest Desk customer continues to grow, now managing over 4,000 desks across 22 locations in four countries.
- Following on from their 2022 release in Korea they are now well advanced on preparations to launch SwipedOn in China, Hong Kong and Taiwan.
- Development of single platform solution for both SwipedOn and Space Connect customers ("SwipedOn Spaces") nearing completion with commercial launch expected within the coming half year.
Space Connect
A SaaS meeting room and desk booking vendor, acquired in October 2019, headquartered in Australia. ARR increased by 7% year on year to £0.7m at 31 January 2023 (FY22: £0.6m).
“We have had more churn than we would have liked from our Space Connect base. As the Covid-related regulatory pressure eased last year, these churns came up at annual renewal. However, more positively, new customers are purchasing our solutions to implement their space optimisation policies which ultimately will lead to 'stickier' customers”. Frank Beechinor, commented.
Anders & Kern
Increased revenue for the year to 31 January 2023 of £2.1m, up 22% year on year (31 January 2022: £1.7m). However, Anders + Kern remains non-core and will be divested shortly.
In the crowded visitor management software marketplace, SmartSpace Software differentiates itself by addressing geographic expansion in the less competitive markets in Australasia and the Far East.
