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by , December 14, 2016 12:19

Accounting software developer notes in first interim results as a listed company, revenues rose 36% to £3.6m in the six months to September 30 as subscriber numbers rose 18%.
Accounting software developer FreeAgent has reported strong revenue growth in its first interim results as a listed company. The Edinburgh-based company, which raised £10.7 million from investors from an initial public offering (IPO) on the junior AIM market last month, said revenues rose 36 per cent to £3.6 million in the six months to September 30, driven by investments in customer acquisition.

The money raised from the IPO allowed the group to pay down existing debts and left the company with £5 million in cash.

FreeAgent, which has developed accounting software aimed at micro businesses, said subscriber numbers rose 18 per cent in the period to 51,865.

Gross profit rose almost 38 per cent to £3.02 million as annual recurring revenues rose 35 per cent year on year.

The company, which now employs around 100 people, said administrative expenses rose 67 per cent in the period to £4.2 million, “reflecting a controlled increase in the overhead cost base brought about by a planned move to larger office premises and recruitment of additional sales and engineering personnel with a view to establishing a sound platform to deliver expected future growth.”

As a result, pre-tax losses were £1.31 million, on a par with the loss for the full year to March.

FreeAgent said the soft launch of a new commercial tie-up with an as yet unnamed “major UK bank” started in October with the full roll out to all new business call centres expected in the New Year.

Founder and chief executive, Ed Molyneux, said: “On 16 November 2016, FreeAgent was admitted to the AIM market of the London Stock Exchange. This is a significant milestone for us, and an achievement which the Board believes will be transformational for the Group’s future growth and prospects.”

“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.”

He added: “As a newly-listed public company, we are especially pleased to report strong performance in our first set of interim results.

“The 36 per cent growth in revenue maintains our FY15 and FY16 growth rates, and at the same time we have also improved gross margins.”

“The second half has started positively and we are confident we will report further significant progress within our full-year results, consistent with market expectations.”

Shares in FreeAgent were up one per cent in Wednesday trading.

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