TIDMEYE
RNS Number : 2958O
Eagle Eye Solutions Group PLC
29 May 2020
29 May 2020
Eagle Eye Solutions Group plc
("Eagle Eye", the "Group", or the "Company")
Trading Update
and
Contract extensions with Sainsbury's and Asda
Eagle Eye, a leading SaaS technology company that creates
digital connections enabling personalised, real-time marketing
through coupons, loyalty, apps, subscriptions and gift services,
today provides an update on trading for the year ending 30 June
2020.
Highlights
-- Business responding as anticipated to the COVID-19 lock-down:
o Supermarket customers remain extremely active, with associated revenue resilient
o All large customer implementations and projects progressing to plan
o Food & Beverage, Leisure and Retail (non-grocery) clients
have been impacted, representing a 10% decrease in monthly Group
revenue during COVID-19 lock-down period
o Cost management actions taken to mitigate revenue impact of COVID-19
o The sales pipeline continues to develop, but as anticipated new contract signings taking longer
-- Contract extensions with Sainsbury's Supermarkets Ltd and Asda Stores Limited
-- Adjusted EBITDA for the year ending 30 June 2020 expected to
be at least GBP0.5m ahead of market expectations
-- Continued improvements to cashflow, with net debt tracking
better than management expectations
-- Current funding position is secure and sufficient headroom
remains within the Group's GBP5m banking facility to support
existing growth plans
Trading Update
Trading in the weeks following the release of our Final Results
on 17 March 2020 has continued largely as we anticipated at the
time, in the scenario that the UK entered a period of full
lock-down.
Revenues from supermarket clients have remained resilient. Our
large client implementations and projects are progressing well and
to plan. Food & Beverage, Retail (non-grocery) and Leisure
clients have been impacted as we anticipated, representing a 10%
decrease in monthly Group revenue for the period of the COVID-19
lock-down.
The longer-term social distancing measures likely to be a part
of the gradual re-opening of the economy are prompting retailers to
consider how to prepare their businesses to re-open in a safe
manner, including assessing where digital engagement with customers
can replace direct interactions.
We are experiencing normal levels of new business activity and a
growing sales pipeline, however new contract signings are taking
longer to close, as anticipated.
We have continued to invest in enhancements to our AIR platform
and anticipate R&D spend in the second half to be broadly in
line with the first half of the year.
We have maintained our strong focus on operational cost control
and implemented a reduction in run rate cost in response to
COVID-19, including a reduction in ad hoc spend, travel costs and
variable overheads related to Food & Beverage. The Company has
benefited from its agile structure, which has facilitated the
redeployment of existing UK teams to support the implementation of
our first US client, Southeastern Grocers. This has enabled the
successful ongoing deployment with a key new client without the
short term need to increase headcount. As a result of these
factors, adjusted EBITDA for the year ending 30 June 2020 is
expected to be at least GBP0.5m ahead of market expectations.
The improved profit performance and continued focus on cash
management means that the Group's net debt position is tracking
better than management expectations. As a prudent measure we have
engaged the Group's lender, Barclays, in discussions with regards
to increasing the flexibility of the facility, should it be
required. However, the Group's current funding position is secure
and sufficient headroom remains within the Group's GBP5m banking
facility to support existing growth plans and taking into account
COVID-19 scenario planning.
Contract Extensions
The Company is pleased to announce the extension of existing
relationships with two of its UK supermarket clients.
The Company has signed two new two-year contracts with
Sainsbury's Supermarkets Ltd ("Sainsbury's"). Having started work
with Sainsbury's in 2015, the contracts are for the continued
provision of the Eagle Eye AIR platform to support the Nectar
rewards programme, one of the UK's preeminent loyalty schemes, and
the ongoing issuance of omni-channel coupons, across Sainsbury's
direct mail, online and at-till marketing programmes.
The Company has also signed a two-year contract renewal and
extension with Walmart-owned UK Supermarket group, Asda Stores
Limited ("Asda"). Previously signed via a third party, the contract
is now direct with Asda. Since 2015, the Eagle Eye AIR platform has
enabled Asda to form innovative digital connections with its
millions of customers each week, through a variety of digital
promotions to customers and staff.
Supporting Asda to deliver the National Voucher Scheme
As part of the services being delivered to Asda, Eagle Eye is
supporting Asda in safely and securely powering their part of the
National Voucher Scheme, to provide free school meals to eligible
children while schools are closed due to COVID-19. Due to the AIR
platform's sophisticated integration at the Point of Sale (POS),
the Eagle Eye AIR platform is able to analyse the customers' basket
to ensure that only specific items permitted as part of the scheme
can be purchased. This means that the funds from the voucher cannot
be used to purchase restricted items such as cigarettes, alcohol
and lottery tickets.
Tim Mason, Chief Executive of Eagle Eye , said : "For many of
our clients, this has been a period of intense activity and change,
requiring the implementation of new business models and customer
engagement methods. I am proud of how our teams in the UK and
internationally have responded to the situation, providing a high
level of client support and continued innovation of our offering to
support these changing dynamics, during challenging circumstances
for us all.
"We are conscious we are only at the start of the impact of
COVID-19 on the economy and the retail sector in particular and,
therefore, while we believe digital, personalised connections with
customers will continue to grow in relevance, we will maintain our
strong focus to ensure we successfully navigate these challenging
times for all."
For further information, please contact:
Tim Mason, Chief Executive Officer Tel: 0844 824 3686
Lucy Sharman-Munday, Chief Financial
Officer
Investec (Nominated Advisor and Joint Tel: 020 7597 5970
Broker)
Corporate Finance: David Anderson, Sebastian
Lawrence
Corporate Broking: Sara Hale, Toba Fatimilehin
Shore Capital (Joint Broker) Tel: 020 7408 4090
Corporate Finance: Hugh Morgan, Daniel
Bush, Sarah Mather
Corporate Broking: Henry Willcocks
Alma PR
Caroline Forde, Rebecca Sanders-Hewett, Tel: 020 3405 0205
Harriet Jackson
About Eagle Eye
Eagle Eye is a leading SaaS technology company transforming
marketing by creating digital connections that enable personalised
performance marketing in real time through coupons, loyalty, apps,
subscriptions and gift services.
Eagle Eye AIR enables the secure issuance and redemption of
digital offers and rewards at scale, across multiple channels,
enabling a single customer view. We create a network between
merchants, brands and audiences to enable customer acquisition,
interaction and retention at lower cost whilst driving marketing
innovation.
The Company's current customer base comprises leading names in
UK Grocery, Retail and Food & Beverage sectors, including Asda,
Sainsbury's, Tesco, Waitrose and John Lewis & Partners, JD
Sports, Greggs, Mitchells & Butlers, Pizza Express and in North
America, Loblaws, Shoppers Drug Mart, Esso and Southeastern
Grocers.
For more information, please visit www.eagleeye.com
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END
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