- 32% first-half revenue growth and 50% underlying profits jump
- Tight consumer spending powering loyalty rewards schemes
- $98 billion loyalty rewards market by 2032, say researchers
It looks like Eagle Eye Solutions (EYE:AIM) is making the most of high price inflation after unveiling rapid half-year growth metrics. Brits like a bargain so even with pressure on household budgets, offer shoppers a discount and millions are still happy to spend.
Eagle Eye might be a new name to many readers but there’s a good chance you’ve tapped into its ecosystem even if you don’t know it. The UK technology company claims to have developed a best-in-class loyalty and promotions omnichannel software-as-a-service platform called Eagle Eye AIR.
It allows customers of big brands to validate and redeem digital promotions in real-time, principally to large supermarket chains, retailers and hospitality organisations across Europe, North America and Australasia.
Clients include Sainsbury (SBRY), Asda, Waitrose, John Lewis, Diageo (DGE), Greggs (GRG), Coca-Cola (KO:NYSE), Budweiser-owner Anheuser-Busch InBev (BUD:NYSE) and many others. It also integrates with major payments services, such as PayPal (PYPL:NASDAQ), Apple Pay, Google Pay and Stripe.
EAGLE’S HALF-YEAR NUMBERS
Revenues grew 32% to £20.2 million in the six months to 31 December 2022, with sticky recurring subscription and transaction revenues up 37% to £15.7 million.
ARR, or annual recurring revenue, grew 38% to £26.2 million despite a three-percentage point drop in net revenue retention, which was still an impressively high 127%. Anything over 100% means existing customers are spending more with Eagle Eye.
Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) rose even faster than sales, (of 50% to £4.7 million), which helps profit margins, up three-percentage points to 24%.
Eagle Eye shares jumped nearly 5% in early trading, hitting 600p for the first time since early January.
WHAT’S THE FUTURE POTENTIAL?
‘Even before the current consumer market headwinds, we have seen rapidly changing consumer behaviours reiterating the importance of an efficient digital engagement strategy for businesses,’ said analysts at Shore Capital.
This will be bolstered going forward by the January completion of the Untie Nots acquisition. That deal complements the existing capabilities of Eagle Eye and extends its European presence, adding clients such as Carrefour, E Leclerc, Auchan, and Rite Aid in the US.
Researcher Fact.MR estimates the global digital loyalty market is set for rapid growth over the next decade, from about $40.3 billion last year to $98 billion by 2032, far outstripping global GDP. Eagle Eye’s own earnings forecasts have been steadily rising too.
‘We are upgrading our full year expectations by 4% for revenue and 4% for adjusted EBITDA, and we continue to see potential progress across all elements of the growth strategy, supported by a robust balance sheet,’ said Shore Cap.
That implies £7.9 million EBITDA on £40.1 million revenue, both more than 20% higher than last year.
Terry Leahy, who ran Tesco (TSCO) for 14 years, and Robert Senior, former boss of advertising group Saatchi & Saatchi, are on the board bringing huge experience.
