FreeAgent's maiden results show surge in revenues
The Edinburgh-based firm, which floated on London’s Alternative Investment Market (Aim) last month, said revenues for the six months to the end of September jumped 36 per cent to £3.6 million, helping gross profits rise 38 per cent to £3m.
However, pre-tax losses widened to £1.3m, from £433,000 in the same period last year, which the company said reflected investment in customer acquisition, employees’ share options expense of £512,000 and unrealised losses on a US dollar loan facility of £200,000.
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Hide AdChief executive Ed Molyneux said that FreeAgent’s initial public offering (IPO) was a “significant milestone” for the firm, which he co-founded in 2007.
FreeAgent, which employs more than 100 people, develops accounting software aimed at the UK’s five million “micro-businesses”. It currently has almost 52,000 subscribers, up 18 per cent on a year ago.
Molyneux added: “The repayment of the loan facility with the placing proceeds and the new investment from the IPO has significantly strengthened our balance sheet and provides us with the opportunity to further invest in customer acquisition activities and product development to enhance our product offering.
“As a newly-listed public company, we are especially pleased to report strong performance in our first set of interim results.”
Molyneux, a former RAF fighter pilot, said the second half of the company’s financial year “has started positively and we are confident we will report further significant progress within our full-year results, consistent with market expectations”.
FreeAgent raised £8m through its IPO, with a further £2.7m going to selling shareholders. It used £2.9m of the flotation proceeds to repay its debt facility, leaving net cash of £5m on its balance sheet after paying of the costs of admission to Aim.
Analysts at house broker N+1 Singer said: “The group will be driving continued growth by investing in customer acquisition, particularly in the key accountancy practice channel and by investing in product development as it looks forward to be strongly positioned for the Making Tax Digital agenda from HMRC.”