Actual Experience plc (LON:ACT), the analytics-as-a-service company, has provided the following update on trading ahead of announcing its full year results for the year ended 30 September 2020. The Company has also separately announced its intention to raise gross proceeds of £10.0 million by means of a placing to institutional investors.
Unaudited Financial Summary for the Year Ended 30 September 2020:
· Revenue of £1.96m (FY19: £1.93m)
· Reduction in operating loss before exceptional items to £4.58m (FY19: £6.26m)
· Reduction in loss for the year to £4.68m (FY19: loss of £5.91m)
· Loss per share of 9.87p (FY19: loss per share of 13.04p)
· Cash at year end of £2.75m (FY19: £7.88m)
Operational highlights:
· Amendments to agreements with two existing Channel Partners to accommodate the Company’s Human Experience Management offering
· First large-scale Professional Services engagement with a Channel Partner’s large energy customer
· First large-scale deployment of a Business Impact Assessment project
Post period end highlights:
· Secured an initial order from Oracle Corporation for the Company’s HXM offering
· Signed a three-year framework agreement with an American multinational computer technology company to resell the Company’s HXM offering
COVID-19 Update
Since March 2020, the health and safety of our employees, Channel Partners and their customers has remained a top priority for the Group. The business continuity systems and procedures that we put in place enabled the quick transition of all employees to remote working, allowing us to continue providing full support to our Channel Partners with no compromise to service levels or delivery.
In the first six months of the financial year 2020, the Company completed its pivot from a managed services led offering to that of professional services. The Covid-19 pandemic initially slowed down the implementation of the professional services offering as it diverted attention of all of the Company’s Channel Partners towards implementing business continuity processes, not just for their customers but for their own organisations.
However, as the Channel Partners and their customers have adapted to new ways of conducting their businesses in light of the pandemic, with a shift to remote and home working, the relevance and opportunity for the Company’s offering has increased significantly. The Company has been working closely with new and existing Channel Partners to support their customers in this new environment and has seen early indications of increasing levels of engagement and shorter sales cycles as a result.
Operational Progress
During the period we were pleased to announce amendments to the framework agreements with two of our existing Channel Partners enabling them to sell our new HXM offering. A third Channel Partner made no amendments to its agreement as it is already in a position to sell our HXM offering. The introduction of HXM is expected to result in a reduction in sales cycles, as well as facilitating a recurring seat-based revenue model. Since August, the Company’s Channel Partners have rapidly established a list of target customers amounting to over 4 million addressable employees or seats. This number continues to grow.
In November 2020, we saw the first large scale BIA engagement with one of our Channel Partners and one of their customers, a large energy company; this engagement represents a significant milestone for the Company. The Company’s software will analyse the digital experience of 10,000 home and office-based employees for one month. Depending on the extent of the business impact identified by the BIA, the customer may then choose to proceed to the ongoing HXM Continuous Improvement (“CI“) service. This deployment confirms the emerging opportunity for the BIA offering to meet the needs of its Channel Partners and their enterprise customers as they address the continued challenges of COVID-19-related changes and newly established ways of working across the world.
Post period end, we were delighted to secure an initial order from Oracle Corporation and sign a three-year framework agreement with an American multinational computer technology company, both for our HXM offering.
Equity Placing
The Company believes that it now has a solid operational platform and sales funnel with its Channel Partners to enable it to effect customer deployments more quickly, efficiently and on a larger scale.
In order to capitalise on the current market opportunity, the Company announced separately today that it intends to raise gross proceeds of £10.0 million by means of a placing to institutional investors at a price of a minimum of 105.0 pence per share.
The Company intends to use part of the proceeds of the Placing to expand its sales and support teams in response to the expanding pipeline of sales prospects, and smoothly on-board the Company’s new partners. Part of the Placing proceeds will also be deployed to expand the Company’s technology development team to facilitate the development of enhanced cloud efficiency and scalability, as well as increased automation of report generation for the PS engagements.
The balance of the proceeds will be used to fund general working capital requirements and strengthen the Company’s balance sheet.
As at 30 September 2020, the Group had cash and cash equivalents of £2.75m. The Directors have prepared detailed monthly projections of future cash flows for 2021 and beyond which include the placement. A successful fundraise will ensure that there is sufficient liquidity for the Group’s needs over the next two years.
An inability to complete a successful fundraise would indicate the existence of a material uncertainty which may cast significant doubt about the Group’s and Company’s ability to continue as a going concern.
Dave Page, CEO of Actual Experience plc, said: “COVID-19 has triggered an obvious, significant and enduring transformation in global working practices involving remote working and new digital collaboration technologies. Our new PS offerings enable business leaders to manage the impact these changes are having on their employees and their overall business. We have seen increased traction from our Channel Partners as a result, providing us with further sales opportunities. This fundraise will enable us to take full advantage of this significant market opportunity – accelerating the funnel build across all partners and smoothly on-boarding new Channel Partners.
We believe that the Group is well positioned for long term growth. We have an excellent, growing portfolio of Channel Partners and customers, and maintain our belief that Actual Experience has the ability to become a significant global player in the market for Human Experience Management. Whilst we will continue to monitor the wider market environment in regard to COVID-19, we are confident in delivering against our strategic objectives, and look forward to reporting on further progress with both new and existing Partners in due course.”
