Pre-Close Trading Update & Directorate Change
31 January 2022
ENGAGE XR Holdings plc
('ENGAGE XR' or the 'Group')
Pre-Close Trading Update & Directorate Change
ENGAGE XR (AIM: EXR; Euronext Growth: EXR) a leading virtual reality ('VR') technology company, is pleased to provide a trading update for the year ended 31 December 2021 ('FY21' or 'the Period'). The Group expects to publish its FY21 results in March 2022.
ENGAGE XR's aim is to become the world's largest crossed reality ('XR') communications, training and virtual events platform provider, through the commercialisation of ENGAGE, its proprietary online virtual communications platform.
FY21 Trading Highlights:
· FY21 revenue is expected to be circa €2.4 million, an increase of 68% on the prior year (FY20: €1.4 million).
· ENGAGE revenue up circa 200% to €1.8 million (FY20: €0.6 million).
· ENGAGE now accounts for more than 75% of Group revenue (FY20: 42%). This is in line with the Group's Medium-Term Outlook and with the ENGAGE growth plan. The strong momentum is being carried into FY22.
· ENGAGE Enterprise and Education active clients up 34% to 139 (FY20: 104) with total Enterprise and Education licence numbers up 124% to 6,634 (FY20: 2,963)
· Gross margin up by 7% to 79% (FY20: 72%) reflecting the increased revenue contribution from ENGAGE.
· The Group signed an initial six-figure dollar contract to August 2023 with Optima Domi LLC ("Optima Domi"), an innovative classical curriculum development company, to service the first VR-based Florida charter school, as announced on 12 November 2021.
· The Group signed a six-figure euro contract with a Korean Enterprise customer in December 2021.
· The Group signed a contract with 3M to use the ENGAGE platform to build its own MetaWorld "3M Home". 3M Home is an exploratory VR pilot project with ENGAGE XR and a global cross-functional 3M team.
· Oversubscribed placing announced on 18 June 2021 raising €9.0 million (£7.7 million) before expenses at a price of 16 pence per share.
· Year-end cash balance of €7.8 million, with net monthly cash burn of approx. €0.3 million.
2021 has been a year of growth for ENGAGE XR. ENGAGE revenue has increased substantially, over 200% against the prior year. The Group has seen a big increase in enterprise and education clients using the ENGAGE platform, with 139 active customers at the year end representing 6,634 enterprise and education licenses. Notably, 3M, BMW Motorsport, Abbott Group, and the US Department of State all became clients during the period. The Group has closed multiple six figure deals for services provided via ENGAGE in 2021 and has a strong pipeline for 2022.
In June 2021, ENGAGE XR announced plans for the development and release of a business-focused metaverse powered by the ENGAGE platform, codenamed "Oasis". Unlike other metaverse projects, this is aimed at professionals, brands and corporations looking to conduct business using spatial services in VR. The Group will be announcing more details about 'Oasis' in the coming months, with plans to launch later in H1 2022.
Also, in June 2021, the Group raised a further €9 million in an oversubscribed placing to capitalise on the strong momentum of its ENGAGE platform, with the investment coming from existing and new institutional investors. These proceeds are being deployed in increasing the Group's sales and marketing functions. Much of this capital deployment will occur in 2022, with the goal of putting ENGAGE front and centre as the leading global provider of virtual communications solutions and professional metaverse services platform in the world.
In October 2021, the Group changed its name from VR Education Holdings plc to ENGAGE XR Holdings plc to reflect better the strategic focus of the Group, which is to become a leading global provider of virtual communications solutions through its proprietary software platform, ENGAGE.
Post-pandemic, the Group expects ENGAGE revenue to continue to grow strongly, with many Fortune 500 companies keeping hybrid work practices to help with staff retention, and to reduce costs and carbon use. This is the ideal target area for ENGAGE, and a long-term focus for the Group as it continues to progress towards its medium-term financial objectives for 2023 - 2025.
Non-Executive Director Frank Poore has resigned from the Board with immediate effect to focus on his other business interests. The Board would like to thank Frank for his efforts and wishes him well with his future endeavours.
The warrant package previously announced as part of Frank's appointment on 1 October 2021 will continue in force from the date of his resignation for 12 months.
David Whelan, CEO, ENGAGE XR, said: "2021 has shown that we have, in ENGAGE, a platform which clients are willing to invest time and money in. ENGAGE provides a level of interaction they cannot get through traditional video and text-based platforms. The next evolution of ENGAGE is very exciting with the launch later this year of our business-focused metaverse, codenamed "Oasis".
"The recent news from META has shone a light onto what we have been saying for the past four years about how people will utilise spatial services in the future. With our business-first approach, we believe we are hitting a sweet spot. Many enterprises are looking to develop a professional metaverse space which they can fully control, and which is not also a children's social media playground.
"At ENGAGE we are expanding and growing fast. All metrics are pointing in the right direction. We are scaling our teams to keep up with current demand and the projected growth. We expect continued growth throughout 2022 and beyond, as remote work and virtual events become the norm. We are excited about the coming months as we help shape our clients' metaverse strategies and ambitions."
- Ends -
For further information, please contact:
ENGAGE XR Holdings plc
David Whelan, CEO
Séamus Larrissey, CFO
Sandra Whelan, COO
Tel: +353 87 665 6708
Cairn Financial Advisers LLP (Nominated Adviser)
James Caithie / Liam Murray / Ludovico Lazzaretti
Tel: +44 (0) 20 7213 0880
Shard Capital Partners LLP (Joint Broker)
Damon Heath / Erik Woolgar
Tel: +44 (0) 20 7186 9952
Davy (Joint Broker & Euronext Growth Advisor)
Barry Murphy / Lauren O'Sullivan / Oisin Morgan
Tel: +353 1 679 6363
SEC Newgate (Financial PR)
Robin Tozer / Isabelle Smurfit
Tel: +44 (0)7540 106 366
The Directors of the Company take responsibility for this announcement. This announcement contains inside information for the purposes of the UK Market Abuse Regulation.
About ENGAGE XR
ENGAGE XR Holdings plc (AIM: EXR; Euronext Growth: EXR) is a virtual reality ('VR') technology company focused on becoming a leading global provider of virtual communications solutions through its proprietary software platform, ENGAGE. ENGAGE provides users with a platform for creating, sharing, and delivering VR content for education, training, and online events through its three solutions: Virtual Campus, Virtual Office, and Virtual Events.
ENGAGE is currently developing a new fully featured corporate metaverse codenamed "ENGAGE Oasis" with the launch expected in the first half of 2022.
EXR is listed on AIM in London and on the Enterprise Securities Market, a market regulated by Euronext Dublin. For further information, please visit: www.engagexrholdings.com (LinkedIn: @Engage XR Holdings plc Twitter: @engage_xr)
Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Group's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Group's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
The Group cautions security holders and prospective security holders not to place undue reliance on these forward-looking statements, which reflect the view of the Group only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Group will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.