The market cap has shrunk to just £11m with the shares down 80% from the mid-2021 highs. However, strong top-line growth and a move into ebitda and cash flow break-even next year means there is plenty of upside potential for a patient investor.
The SwipedOn visitor, desk and meeting room management product accounts for £4.5m ARR (annualised recurring revenue) out of a group total of £5.2m. Its ARR grew 35% over the last year to July supported by a rise in ARPU to £84 pm from £59 over the 12 months driven by upselling more modules and repricing legacy customers. At the end of September ARPU had improved further to £91. Growth in enterprise customers supports better pricing and permits a ‘land and expand’ strategy: the software gets installed at a single site and then is adopted throughout an organisation. Sales are direct but the team is only five strong with most purchases made online. A Korean version has been launched and there is focus on expanding into less competitive Asian markets.
Space Connect has been held back by its partner Evoko’s slower than expected sales of its new meeting room panel. These come loaded with Space Connect software so there is upfront and recurring royalty payments when panels are sold. Things are now picking up with the monthly run-rate above budget. Cheap on 1.4x prospective ARR.
AIM-listed workspace management software provider SmartSpace has reported half-year revenues (ending July 2022) in-line with its August trading update (revenue up 45% to £3.7m and ARR up 32% to £5.2m) and revealed a reduction in adjusted EBITDA losses (from £1.6m to £0.5m) and cash consumption.
The performance was underpinned by progress across all three of its product lines, although SwipedOn continues to be the standout performer, led by the expansion of its higher-value accounts and international expansion. Notably, SmartSpace is taking aim at further countries in the Far East (including China) after internationalising SwipedOn and launching into Korea over the summer. Trading momentum has carried into the second half and is tracking in-line with market expectations (consensus estimates are for revenues of £6.8m (+31%) and adjusted EBITDA losses of £1.5m (-39%)). We managed a quick call with CEO Frank Beechinor.
SmartSpace Software; SMRT; Software; £18m; 63p; Speculative Buy.
The SwipedOn business continues to trade strongly with revenue up 57% last year. ARPU has been an important driver with legacy tariffs being repriced and new users tending to be larger businesses with multiple sites. Geographically, management sees a big opportunity in Asia, with a Korean language version recently launched. SwipedOn is sold through digital channels and marketing costs in Korea via search on Naver are much cheaper than those in Google dominated territories. A desk management product has also been rolled out which offers a meaningful upsell opportunity and scope for a 'significant impact' on ARPU.
AIM-listed workspace management software provider SmartSpace has reported full year revenues (ending January 2022) up 11% to £5.1m and adjusted EBITDA losses up 17% to £2.5m, with the latter marginally shy of its revised guidance in February due to a tweak in its SaaS revenue recognition. The results were driven by SwipedOn (as previously guided) with Space Connect and Anders & Kern still suffering from slow investment decision making (as COVID impacts linger), while SwipedOn and Space Connect have started the current year strongly, supported international expansion, up/cross-selling and price rises. We managed a quick call with CEO Frank Beechinor.
AIM-listed workspace management software provider SmartSpace has announced that, for the year ending January 2022, revenues are expected to be £5.3m (+15%) and EBITDA losses at no more than £2.5m (2021: £2.1m). These are ahead of revised expectations issued in October 2021, of at least £5.2m revenue and no more than £2.7m losses respectively (which compare to original expectations of £7.8m and £0.7m losses respectively). SmartSpace grew recurring revenue by 50% to 3.6m and ended the year with ARR of £4.9m (+64%) and gross cash of £2.8m (also ahead of market expectations). Trading was aided by a strong resurgence in demand in Australia since exiting lockdowns in Autumn, while the recent push to return to the office has significantly improved orders and the sales pipeline, particularly in the UK. The shares are up 8% to 71p this morning.
SmartSpace Software; SMRT; Technology; £25m; 87p; Buy.
The supplier of office visitor, meeting room and desk management software has issued a profit warning due to a slower than expected return to normal office working. The shares have halved from their mid-year highs and potentially offer good value on a medium term view.
The SwipedOn division continues to perform well and drive strong growth in annual recurring revenue (ARR), up 54% from July last year to the end of September. This product is predominantly sold online and average revenue per user is rising with more multi-site, high value customers. Prices were increased earlier this year and existing customers are being migrated onto the new tariff. A SwipedOn desk management module is being rolled out and upselling this to larger customers should also have a material impact on revenues...(continued)
The pandemic has accelerated many trends and changes and arguably the most fundamental is the rise of hybrid working.
Typically, working from home was confined to a Friday, but now the idea of working from home is likely to be extended to an increasing number of days as workers proved their productivity remotely.
However, the office will also continue to serve an important base for businesses.
This trend inevitably means that businesses need to adapt to new ways of working and in particular how to manage the ‘new normal’. Handled correctly, that should generate significant cost savings for firms.
Step in, SmartSpace Software (AIM: SMART) that helps businesses to adapt to this new way of working life and aspires to become a market leader in space management technology.
AIM-listed workspace management software provider SmartSpace expects revenues for its half year ending July 2021 to be circa £2.5m (+7.8%) – of which 63% is recurring (up 18pp) – and expects second half growth to accelerate due to more office re-openings and the increased need for workplace hardware and software. Consensus estimates for the full year ending January 2022 are calling for a 49% rise in revenues to £6.9m alongside reduced adjusted EBITDA losses of £0.7m (2021: £2.1m). Drilling into the first half, hardware sales for Anders & Kern (A+K) and Evoko (for which the latter SmartSpace generates Space Connect revenue from) were below expectations, but SwipedOn progress was strong and in-line. Group ARR rose 28% to £3.8m over the period, while cash fell from £4.5m to £3.4m.
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Not another small technology stock which isn't profitable, was my first reaction when looking at Smartspace Software.
It has been around for a while on the AIM and I remember it as being a collection of sub-businesses involved in the telecom and IT services sectors.
It looked as though it had some interesting parts, but felt like a small compendium of businesses without a clear and comprehensible strategy, although I am sure they would have disagreed.
However, it seems to have changed and is very much more focused as a software business and, in the current fashionable jargon that seems to be so loved by analysts trying to show off, appears now to be seen as a SaaS business, which in English is 'Software as a Service'.
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It is good to see SmartSpace’s business gaining traction, and the transition to a SaaS model looks to be paying off. Covid-19 has changed working practices and many businesses have indicated plans to reduce their real estate. We feel this will likely result in more people than available desks which, in turn, creates a significant opportunity for SmartSpace’s space management software. Moreover, as businesses reopen and staff return to the office, the importance of creating a controlled and Covid-19 secure work environment is being recognised, SmartSpace’s products are particularly suited for this purpose.
We believe the company is at the start of a multi-year growth phase driven by strong distribution partnership agreements and considerable scope for international expansion. Buy.
Little more than a year ago, working from home was a rarity. Fewer than 5 per cent of employees did it on a regular basis and there seemed little prospect of radical change.
Within weeks of last year's lockdown, almost half the UK workforce – tens of millions of people – had relocated from the office to their bedroom, kitchen, garden shed or, if they were lucky, study.
At first, many people hated it. Then they adapted. Now, more than 80 per cent of office workers would prefer to spend at least part of the week at home, according to independent research... (continued)
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AIM-listed workspace management software provider SmartSpace has reported full year results ending January 2021 confirming its recent update on revenues, down 8.9% (-11% organic) to £4.6m (driven by COVID-19 driven delays to hardware revenues), while the group reported adjusted EBITDA losses up 27% to £2.1m due to investment. However, exit ARR grew 50% to £3.0m, with its growing recurring software momentum expected to continue through the current year with support from pandemic related restrictions easing and a greater focus on preparing for a return to the office in a COVID-19 secure manner. We managed a quick call with CEO Frank Beechinor.
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SmartSpace Software; SMRT; Technology; £39m; 139p; Hold/Buy.
SmartSpace offers some helpful solutions for office managers adapting to new ways of working. Its software manages desk occupancy, site visitors, and meeting room bookings. Covid-19 functionality such as visitor contact information, room cleaning requests, and distanced desk positioning has been promptly added. The company is now concentrated on its smaller and mid-market subscription SaaS offerings aimed at clients with up to 1,500 employees. The disposal of the enterprise software division last year removed a distraction and raised £5m cash, producing a year-end cash balance of £2m... (continued)
SmartSpace Software Plc (LSE:SMRT) is a small-cap UK-listed software company that develops software and hardware solutions for workspace (office) management.
The group is made up of three divisions: Space Connect, SwipedOn and Anders & Kern (A&K). Each of these tackles different aspects of smart workplace management from workers to visitors and analytics of the workspace.
The company itself has a long history dating back 20 years when it was first a telecom and IT infrastructure provider. Over the last 20 years, however, it’s pivoted from telco, IT and IT managed services to software around space management.
Its first foray into this space came in 2014, then more aggressively in 2016 and 2017. Only in 2018 was the company renamed to SmartSpace Software when it also acquired the SwipedOn business to push harder into what was clearly a fast evolving opportunity.
While the company is 20 years old, the way I view it is more of a new company as its efforts into workspace management software is really only about four years old. And considering two of its major business arms, SwipedOn and Space Connect, were acquired in 2018 and 2019 respectively, it’s really at the early stages of its growth story as I see it.
What exactly do each of these business divisions do? And why is it important when it comes to the future of work?
Space management software provider SmartSpace Software said two of its businesses had signed agreements with Australian workplace software provider XY Sense.
One of the businesses, Anders + Kern, had signing a distribution agreement to sell XY Sense's real-time computer vision sensor hardware and analytics platform.
The other business, Space Connect, would integrate its workplace software platform into XY Sense to enable an end-to-end solution for Covid-safe office utilisation monitoring and space booking.
AIM-listed workspace management software provider SmartSpace has reported on belated full year results to January 2020 and interim results to July 2020 this morning, stripping out its recently divested enterprise software division. Full year revenues jumped 71% (+36% organic) to £5.1m on strong hardware momentum and two software acquisitions, and supported by EBITDA losses of £1.7m. Meanwhile, more recently, revenue momentum slowed in the half year (+6.5% to £2.3m) due to a COVID-19 led slowdown primarily in the UK and US. However, on a call, CEO Frank Beechinor noted that trading going into the second half has been much stronger due to a rebound in sales momentum from SwipedOn, in addition to positive progress for Space Connect and its recently signed partnerships.
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Richard Jeans, Proactive's tech analyst discusses key UK tech stocks this week: SmartSpace (LON:SMRT)
Jeans explains why SmartSpace caught his attention, since its first half results the company has revealed a strong tailwind from COVID-19 as customers are purchasing the software to help them deliver their COVID-19 policies such as social distancing and sanitisation.
As we try to figure out the future of office working, SmartSpace should offer some helpful solutions for property managers. Its software manages desk occupancy, site visitors, and meeting room bookings.
Covid-19 functionality such as visitor contact information, room cleaning requests, and distanced desk positioning has been quickly added.
The company is now concentrated on its smaller and mid-market subscription SaaS offerings aimed at clients with up to 1,500 employees, having recently disposed of its enterprise software division. As well as raising a useful £5m cash to add to a £1.7m net balance, this disposal removes the distraction of a long sales-cycle business with lower margins.
Softcat has been signed up as a distributor which is an endorsement of the product and sales are already being made. There will be further benefit when the new generation of Evoko meeting room panels which incorporate the company’s software starts to ship... (continued)
SmartSpace Software has completed the sale of its enterprise software business to Four Winds Interactive UK for a cash consideration of £4.6m.
SmartSpace said it had entered into and completed a sale and purchase agreement, to sell the entire issued share capital of SmartSpace Global and certain contracts of its US subsidiary, Smartspace USA for an estimated consideration of £4.6m, payable in cash on completion, together with a further deferred payment of £0.4m, payable on receipt of corporation tax R&D tax credits.
AIM-listed workspace management software provider SmartSpace has announced the sale of its Enterprise software business to Colorado-based and Vista-backed digital signage software vendor Four Winds Interactive, for £5.0m (or 1.5x fiscal 2019 sales), of which £0.4m is deferred pending the receipt of a tax refund. The divestment rationale noted that this would remove the challenges faced in selling enterprise software (i.e. long sales cycles) and would enable the group to focus on its small-to-mid-market products SwipedOn and Space Connect.
SmartSpace Software PLC (LON:SMRT) shares has rocketed after computer infrastructure giant Softcat said it would start reselling the AIM-listed company’s workplace contact tracing and social distancing software.
SmartSpace, which used to be called RedstoneConnect, and the FTSE 250 group have signed a distribution agreement for the latter to resell the Space Connect workspace management software, which is said to include “a range of solutions to support your office returning to the workplace” as part of its new Covid-19 functionality.
Space management software supplier SmartSpace Software said it had signed a distribution agreement with Softcat to resell its workspace management solution.
The Space Connect solution would be offered to Softcat's customers as a solution to help them implement Covid-related policies in the workplace.
Smartspace said it had also recently secured additional enterprise customers for its Workplace platform, including an international law firm and an international news agency.
SmartSpace Software Plc (LON:SMRT), the leading provider of ‘Integrated Space Management Software’ for smart buildings, commercial spaces and hospitality, announced that trading for the year ended 31 January 2019 was in line with market expectations.
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Following the disposal of the Systems Integration and Managed Services divisions which completed in June 2018, SmartSpace has made significant progress in becoming a provider of integrated space management software. Modules developed so far include desk, meeting room and visitor management, wayfinding and event management. The company has also signed two major enterprise customers, one in the financial sector and one in the hospitality sector. Going forward, SmartSpace aims to provide greater visibility of forward revenues by targeting the self-serve and mid-range markets which can deliver pure SaaS revenues at higher margins. Acquisitions are also on the agenda and the example of Space Connect shows how significant synergies can be achieved through deals of this kind in a sector that is ripe for consolidation. Hold.
Against a volatile stock market that has hit many London-listed small-cap firms, software-as-a-service (SaaS) player SmartSpace has delivered steady performance so far this year, currently sitting at 84.7p. Following a major repositioning last year, the £18.8m business has been working hard to develop its wholly-owned platform aimed at addressing a growing need for space management solutions among companies. With SmartSpace recently painting a clear picture of its near-term growth plans in its full-year results, we spoke to chief executive Frank Beechinor about the company’s progress since our feature profile in January.
The business model is SaaS subscription focused, but a recent big banking deal covering 360 locations will be a hybrid of usage and licence revenue.
The acquisition of Swipe-On will help broaden Smartspace’s revenue base and will enable the business to be less dependent on enterprise-level deals. With a strong cash position, the enlarged group will be able to accelerate the ‘buy and build’ strategy, acting as a consolidator in the fragmented market for smart building software and services. The shares currently trade on a cash adjusted P/E of 10.1. Continue to buy."
Since August last year, volatile market conditions have pushed newly-rebranded software-as-a-service business SmartSpace (LSE:SMRT) down from highs of 109.5p to its current 90p. The firm’s flagship product is a platform that supports companies in their efforts to make the most out of their workspace as rents continue to increase and employees take an increasingly flexible approach to office hours. Here, CEO Frank Beechinor talks through SmartSpace’s efforts to bolster its product offering and customer base. With the company’s share looking so cheap, he also explains why he believes the ‘global phenomenon’ of workspace optimisation could provide an exciting investment opportunity.
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AIM-listed workspace management software provider SmartSpace has warned that revenues for the year to January 2022 are expected to now be no less than £5.2m, 33% below prior market expectations and representing year-on-year growth of at least 13%. Meanwhile, adjusted EBITDA losses are now expected to come to no more than £2.7m against market expectations for just a £0.7m loss (FY21: £2.1m loss). The company puts this down to a more gradual return to the office than expected as a result of ongoing COVID-19 challenges which, in turn, have delayed investment decisions. The shares are off 24% this morning at 72p valuing the business at circa 3.5x current year EV/Sales.
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