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SmartSpace Software

SmartSpace Software plc A year of successful transition

SmartSpace Software plc (LON: SMRT), the leading provider of ‘Integrated Space Management Software’ for smart buildings, commercial spaces and hospitality, announced its unaudited final results for the year ended 31 January 2019.

On outlook, Frank Beechinor, CEO of SmartSpace commented:

“Our plan in the coming year is to continue to invest into sales and marketing to enterprise and mid-market companies to maximise the opportunity we see for workplace technology, both in the UK and overseas. This sales and marketing effort will also include further development of channel sales opportunities. During the coming year we expect to see increased sales from partners, in particular via Evoko, who operate through 400 resellers and distributors across the globe. SwipedOn has performed exceptionally well between the time of acquisition and period end. More importantly, this momentum has continued into the current financial year with continued growth in customers, low cost of acquisition, low churn and increasing revenue per client. At 30 April 2019 the SwipedOn customer base had grown further to 3,063 customers, an increase of nearly 35% since SwipedOn became part of the Group. SwipedOn had its busiest month ever in March 2019 with 160 new customers signing up. We have also seen increased traction in new country markets including Germany, The Netherlands, Denmark, Sweden and Singapore.

“We will continue to focus our UK software development resources on our workplace software platform with the aim of enhancing the existing offering, allowing us to maintain competitive differentiation through technical innovation.

“Following the success of SwipedOn, we will continue to explore acquisition opportunities that deliver either complementary software functionality or have the potential to increase our customer base and geographical reach.”

Financial Highlights:

· Revenue from continuing operations up 2.8% to £6.3 million (2018: £6.1million)

· Adjusted LBITDA* £2.66 million (FY18: EBITDA: £0.2 million)

· Loss before tax from continuing operations of £4.2 million (FY18: loss £0.7 million)

· Profit from disposal of subsidiaries £2.95 million (FY18: £nil)

· Net cash position at 31 January 2019 £7.6 million (FY18: £1.2 million)

Operational Highlights:

· In June 2018, completed a successful sale of the Systems Integration and Managed Services divisions for a total consideration of £21.6 million (net proceeds of £17m taking into account transaction casts and cash adjustments);

o £19.6 million payable in cash on completion;

o £2.0 million payable, subject to completion of an already contracted project by Redstone Converged Solutions Ltd.

o Intra-group loans of £1.4m owed by the Company were also waived

· Successful rebranding of the Company as SmartSpace Software Plc

· Acquisition of 100% of the share capital of SwipedOn Limited on 15 October 2018, a company registered in New Zealand:

o total consideration of £5.5 million (NZ$ 11.0 million), satisfied by £4.3 million in cash (NZ$ 8.6 million) and £1.2 million (NZ$ 2.4 million) in equity.

o Between acquisition and year end the SwipedOn customer base has grown by 19% from 2,279 to 2,713.

· Signed distribution agreement with Evoko (a leading panel manufacturer) to resell SmartSpace technology through their global distribution channel

· Material contracts for our SmartSpace platforms

o Leading International Bank – 5 year licence for Workspace Management Software – 86,000 employees across 650 floors, 60 countries and 2,800 meeting rooms

o £1.25m, 5-year hospitality contract win – software platform for ticketing/event management & analytics

· Investment in software platform and scaling up of our development capacity: Launch of SmartSpace V2

· Board changes

o Frank Beechinor appointed as Chief Executive Officer (18 June 2018)

o Guy van Zwanenberg appointed as Chairman (18 June 2018)

o Bruce Morrison appointed Chief Financial Officer (27 November 2018)

· Appointment of senior executives to manage development implementation and sales

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.