This announcement contains inside information as stipulated under the UK version of the market abuse regulation (EU no. 596/2014) as it forms part of UK law by virtue of the European Union (withdrawal) act 2018 (as amended from time to time).

27 January 2022

Eagle Eye Solutions Group plc

("Eagle Eye", the "Group", or the "Company")

H1 Trading Update and U.S. Customer Win

Continuing strong growth, high profile wins and customer expansions, plus record sales pipeline and growing recurring revenue, provide confidence for a successful year

Growing U.S. momentum, signing fourth U.S. customer

Eagle Eye (LSE: "EYE"), a leading SaaS technology company that creates digital connections enabling personalised, real-time marketing through coupons, loyalty, apps, subscriptions and gift services, is pleased to provide an update on the Group's trading for the six months ended 31 December 2021 ("the Period") and announce the signing of its fourth U.S. customer, Giant Eagle.

Highlights

·      Growth being driven by all areas of the customer strategy: Win, Transact and Deepen

·      Revenue growth across all major geographical regions of North America, UK & Europe and Australia & New Zealand

·      Continued investment in people and operations to support further growth and capitalise on the global shift towards personalised digital marketing by retailers

·      New business pipeline continues to grow at record levels

·      Two further U.S. customers secured post period end; a substantial win with one of the largest national U.S. grocery retailers and a multi-year agreement announced this morning, with regional food, fuel and pharmacy retailer, Giant Eagle

·      Strong net cash balances, better than the Board's expectations, driven by cash inflow of £1.0m in the Period (H1 FY21: outflow of £1.4m)

·      Board confident in achieving results for the full financial year ahead of management expectations

Eagle Eye delivered a strong performance in the Period, building on momentum from the end of the prior year. The business continued to deliver for its clients and win new customers, resulting in revenue growth of 40% to £15.1m (H1 FY21: £10.8m) and a 50% increase in adjusted EBITDA¹ to £3.1m (H1 FY21: £2.1m).

During the Period, the Group delivered good underlying growth driven by existing customers moving into the transactional phase of those relationships and an increase in implementation fees for engagements that are expected to progress to recurring revenue in future periods. The Period also benefitted from two elements of revenue growth which are not expected to repeat in H2. These were particularly buoyant Black Friday and Christmas trading periods and an increase in revenue recognised under IFRS 15 for implementation fees for existing customers, due to the revenue deferral requirements of the accounting standard following contract renewals.

While cognisant of the potential for wage inflation through 2022, the healthy underlying growth and the flexibility of the Company's business model mean that management can invest into the business with confidence to support future growth. In particular, the Group continues to to invest in its people and operations, with new appointments across product develoment and customer service in the Period and further investment to come in the second half of the year.

Following the lifting of the majority of lockdown measures across the UK, the Group began to see a normalisation within its Food & Beverage and Non-Grocery revenue in H2 FY21, previously accounting for approximately 10% of Group revenue, and this trend continued throughout the Period.

The Group closed the Period with a net cash position of £1.8m, ahead of the Board's expectations. This followed an improved cash performance, driven by the increase in adjusted EBITDA¹, generating a positive cash inflow of £1.0m (H1 FY21: outflow of £1.4m). The Group also has available the three year £5m funding facility announced in November 2021. 

New Wins in the Period included Halfords Group plc for customer engagement with a targeted launch to take place in March 2022. A number of significant customer contracts moved into the transactional phase during the Period, including Woolworths in Australia, Staples US Retail and Virgin Red, and several long-standing customers extended their use of the AIR platform, including Asda, with the trial of a new loyalty programme, Asda Rewards and Pret a Manger with the expansion of the coffee subscription service into France and the U.S., as well as the launch of a trial loyalty scheme, Pret Perks.

The Group's work with Southeastern Grocers in the U.S. has continued to progress well, with the success of this programme, alongside Eagle Eye's partner, Neptune Retail Solutions ('NRS'), elevating the profile of Eagle Eye in the US market.

A promising pipeline of opportunities continues to build, as demonstrated by the announcement post Period end of the signing of a three year contract with NRS to support the Company's third U.S. customer, one of the largest grocery retailers in the U.S.

Eagle Eye selected by US food retailer, Giant Eagle, to support loyalty and personalisation transformation

Eagle Eye is pleased to announce that Giant Eagle, a regional food, fuel and pharmacy retailer and one of the 40 largest family operated companies in the US, has signed a multi-year agreement to use Eagle Eye's AIR platform to facilitate its new digital loyalty platform and increased promotional capabilities.

Giant Eagle, which has over 470 stores across Pennsylvania, Ohio, West Virginia, Indiana and Maryland, selected Eagle Eye for its breadth of capabilities and ability to facilitate a personalised loyalty platform, at scale. Eagle Eye's AIR platform will enable Giant Eagle to further advance its leading loyalty programme across all facets of its business. Giant Eagle will also use the AIR platform to enable the end-to-end management of real-time personalised promotions enabling the multi-format retailer to continue to innovate its in-store customer experience.

It is intended that functionality will be rolled out to Giant Eagle's customers in phases, starting at the end of Eagle Eye's current financial year to 30 June 22. 

This is Eagle Eye's fourth customer in the United States, following the signing of one of the largest national U.S. grocers earlier this month, reflecting the ongoing transition by U.S. retailers from traditionally paper-based promotion activity, and Eagle Eye's increasing international profile.

Outlook

The new Wins along with the growth of the existing customer base have enabled Eagle Eye to execute on its strategy of delivering sustainable and profitable growth.

The Group's new business pipeline continues to grow, both in the UK and internationally and Eagle Eye has a proven ability to grow its existing customer relationships considerably over time, through expanded use of the AIR platform. This, coupled with favourable market opportunities, and the strong trading during the Period, underpins the Board's confidence in achieving results for the financial year ending 30 June 2022 ahead of management expectations.

Notice of Results

The Group expects to announce its results for the six months ended 31 December 2021 on 16 March 2022.

Tim Mason, Chief Executive of Eagle Eye, said:

"Eagle Eye has performed strongly in the first half of the financial year, delivering significant growth over the prior year, building on last year's momentum. We have deepened our existing client relationships, enabling them to connect with their consumers via multiple means and taken new customers live in record time, while continuing to secure new business.

"Never has digital engagement with consumers been of more relevance to the global retail sector. Eagle Eye is increasingly becoming the chosen partner of many large retailers across multiple geographies, as demonstrated by the speed with which we have announced our two most recent U.S. wins. This presents a huge opportunity for the business as we increase our market share and capitalise on the growing demand for our expanding AIR platform."

Notes:  

All financials based on unaudited figures 

¹Adjusted EBITDA has been adjusted for the exclusion of share-based payment charges along with depreciation, amortisation, interest and tax from the measure of profit and is reconciled to the GAAP measure of loss before tax. 

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, Leisure and Food & Beverage sectors, including Asda, Sainsbury's, Tesco, Waitrose and John Lewis & Partners, Virgin Red, JD Sports, Pret A Manger, Greggs, Mitchells & Butlers, Pizza Express; in North America, Loblaws, Shoppers Drug Mart, Southeastern Grocers and Staples US Retail and in Australia & New Zealand, Woolworths Group and The Warehouse Group.