Essensys scales back growth plans as losses mount

Essensys has reined in growth plans after full-year losses mounted, the workspace technology specialist confirmed on Tuesday.

The AIM-listed firm said recurring revenues in the year to 31 July were ahead 11% at £21.9m, while group revenues rose 6% to £23.3m.

UK revenues, however, fell 8%, reflecting the churn of low value customers and a one-off customer insolvency, while adjusted losses before interest, tax, depreciation and amortisation came in at £7m, compared to EBITDA of £1.3m a year previously.

Pre-tax losses ballooned to £11.1m from £2.9m, which Essensys said was "primarily as a result of the investment in the group to deliver growth plans".

Mark Furness, chief executive, said market conditions had been "challenging", and Essensys would now adopt a "more selective approach" to investing, both from a capital and new customer acquisition perspective, to help reduce cash burn.

Total revenue of the current financial year is also expected to be at a lower level than previously expected, he added.

He said: "Essensys has a clear strategy, proven model and strong platform to drive sustainable growth.

"While our long-term ambition is unchanged, we have moderated our growth targets and adapted our strategy and investment approach to focus on our return to profitability. Our momentum, allied to contracted new business and a healthy long-term pipeline, supports our confidence of further progress in the 2023 full year and beyond."