Eagle Eye revenue climbs by a quarter on recent contract wins

Eagle Eye on Wednesday reported that it expects to meet full-year expectations after revenue jumped by a quarter following new deals with Waitrose and Burger King.

For the six-month period ended 31 December, revenues grew to £8.2m, up by 26% on the same period of the year before, while the digital promotions and loyalty specialist made an adjusted underlying EBITDA loss of £0.5m.

Cash consumption over the period was higher than for the prior six months at £2.1m, but lower than the £3.0m registered in the same period of the year before and better than management expectations, leading the group's net debt position of £1.8m at the end of the period to surpass management expectations.

Tim Mason, chief executive of Eagle Eye, said: "We are delighted to confirm a strong first half of the year, delivering significant revenue growth and expansion of the customer base, including the addition of Waitrose and Burger King. With a growing number of retailers turning to the Eagle Eye AIR platform to create a meaningful connection to their customers, we are excited about the prospects for the business and we are confident in our ability to create increased shareholder value."

Standout deals over the period included a three-year contract with Burger King UK for 74 outlets, a new five-year contract with Waitrose & Partners, who will use the AIR platform to improve their digital marketing proposition, and the addition of new audience partners, such as Wuntu, Kids Pass and Blue Light Card.

The AIM traded company, which styles itself as a software-as-a-service business, said that recurring revenue from subscription fees and transactions over the network represented 72% of total revenue, a little under the 75% reported last year.

A statement from Eagle Eye said growth in revenues and volumes was expected to continue into the second half of the year, from both the annualisation of Tier 1 contracts and the impact of significant new wins and the strong growth of the audience network.

Shore Capital lauded Eagle Eye's "strong" trading update and commented that the company's AIR platform solution was a "critical" tool for addressing heightened competition driven by e-commerce as it is "both proven and effective".

"In our view, a tough trading environment for all forms of retailers and other merchants demands a strategic response – with a broadening client base, Eagle Eye is now a highly referenceable partner," said a research note from the broker.

Eagle Eye's shares were up 1.45% at 175.00p at 1051 GMT.