EU Supply (AIM:EUS), the e-procurement SaaS provider, is pleased to announce its unaudited interim results for the six months ended 30 June 2018, which are reported for the first time under IFRS15 unless otherwise stated. Comparative numbers have not been adjusted and are disclosed as initially reported under IAS18 unless otherwise stated.
Financial highlights:
- Revenue grew by 15% to £2.45m (H1 2017: £2.13m, adjusted for IFRS15) (15% growth also on a constant currency basis)
- Revenues of a recurring or repeated nature up 26% at 71% (H1 2017 65%, adjusted for IFRS15)
- Operating profit increased to £45k (H1 2017: profit of £9k and a loss of £30k adjusted for IFRS15)
- Positive operating cash flow generated after interest expense
- Cash balance of £1.13m at 30 June 2018 (30 June 2017: £1.04m; 31 December 2017: £0.65m)
Operational highlights:
- Equity placing raised £600k before expenses to invest in the development of micro-procurement solution services to existing and new customers
- Considerable development resources were re-allocated in Q2 2018 to build modules and services to generate high growth of recurring revenues in the mid to longer term
- Large number of smaller contracts signed with new customers, notably in Denmark and Norway, with more than 120 new names combined during H1 2018, increasing the recurring revenue base
Post-period end:
- New service offering launched to suppliers on the Group’s CTM™ platform opening a new revenue stream. More than 100 new subscribers achieved in the first month of operation in the pilot market. The Board expects this to add further recurring revenue at a high margin and in time targeting a significant share of the 500,000+ suppliers active on the platform
- Additional SaaS modules are being negotiated with existing customers for launch at the end of 2018
- Work has continued under the grant announced in 3 July 2018, expected to be worth up to €240,000, and to be received in late 2018 or early 2019
Commenting on the results, Thomas Beergrehn, CEO of EU Supply, said:
“I am pleased to announce continued profitable growth, especially on the back of enhanced recurring revenue, which is despite a net deferral of approximately £206k of income in accordance with IFRS15.
The increased recurring revenue base was achieved with contributions from both new customer contracts and licensing of additional modules to existing customers. Post-period end, we also successfully launched additional services to suppliers on a subscription basis at an attractive margin.
The Group expects continued revenue growth in 2018 and beyond driven by the requirements for mandatory EU e-tendering provisions and increasing demand for additional CTM™ modules to existing customers and new services to their suppliers. Over 500,000 suppliers are currently using our platforms or services, and the Group is developing and launching additional services for them, which can generate additional recurring revenues at a high margin.
The Board anticipates continued growth during the second half of 2018 and expects to report a second successive annual operating profit and results for the year ending 31 December 2018 in line with market expectations.”
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