19 September 2023

Eagle Eye Solutions Group plc

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

Final results for the year ended 30 June 2023

An exceptional year of growth, delivering revenue and profits ahead of initial expectations

Eagle Eye, (LSE: "EYE"), a leading SaaS technology company that creates digital connections enabling personalised, real-time marketing, is pleased to announce its audited results for the financial year ended 30 June 2023 (the "Year").

Financial Highlights

¹Period End Annual Recurring Revenue is defined as period exit rate for recurring AIR subscription and transaction revenue plus any professional services contracted for more than 12 months hence and secured new wins, excluding any seasonal variations and lost contracts.

²Net retention rate is defined as the improvement in recurring AIR revenue excluding new wins in the last 12 months.

³EBITDA has been adjusted for the exclusion of share-based payment charges along with depreciation, amortisation, interest and tax from the measure of profit. 2023 EBITDA figure has also been adjusted to exclude costs associated with the acquisition of Untie Nots.

⁴Net cash is defined as cash and cash equivalents less financial liabilities.

Strong financial performance delivers revenue and profit ahead of the Board's initial expectations, reflecting strength of SaaS business model and growing customer demand

·      Achieved strong revenue and adjusted EBITDA³ growth as a result of the growth of the customer base, delivering across all three areas of the Customer strategy: Win, Transact and Deepen

·      Continued expansion of the customer base, adding Morrisons in the UK, Hudson's Bay, an iconic Canadian department store brand, IKEA in Taiwan, and expansions with Asda in the UK and Woolworths Group in Australia

·      Significant international revenue expansion, driven by the US (+129%) and APAC (+56%), including first customer in Singapore

·      ARR¹ up 40% to £33.3m and NRR remained high at 137%, consistent with the COVID adjusted NRR in 2022, with very low churn maintained, at less than 1%, providing a solid basis for expansion

·      Strong operating cash generation resulting in better than expected net cash⁴ of £9.3m

Successful acquisition of Untie Nots, delivering European expansion and AI opportunity

·      Acquisition of Untie Nots in January 2023, a rapidly growing SaaS company enabling retailers to deliver AI-powered, personalised challenges to customers at scale

·      Provides accelerated entry into the French market, bringing some of Europe's largest grocers as customers, provides cross-sale opportunities, and enhances the Group's AI capabilities

·      Untie Nots team benefitting from Eagle Eye's more advanced sales and marketing organisation, considerably expanding the reach for their innovative technology

Continued investment in innovation, including creation of new AI offering: EagleAI

·      Added more than 60 new features to the Eagle Eye AIR platform, including new promotion types, extensions to existing product capabilities, new ways for retailers to reward their customers, and new, enterprise ready, direct-to-consumer API packages

·      Applied hundreds of new rules and permutations to our cloud-based adjudication engine, enabling retailers to achieve levels of individual personalisation with their customers that has never been seen before, at an unprecedented speed and scale

·      Development teams creating a new offering, EagleAI, which uses Untie Nots' market-leading AI capabilities and retail expertise to create and autonomously target personalised offers for customers, expected to launch in 2024

Positive outlook for FY24 and beyond

·      Expanding market opportunity, driven by growth in demand for personalisation and real-time delivery as retailers seek to apply modern data science/AI-based techniques to power personalisation

·      Eagle Eye has entered FY24 in a strong position, with a healthy new business pipeline and a growing international opportunity, in the US, Europe and Asia

·      The acquisition of Untie Nots has provided an additional channel for growth, as well as bringing valuable AI capabilities into the Group

·      Trading in the current year to date is in line with Board expectations and the Board is confident in achieving another positive year of profitable growth in FY24

Tim Mason, Chief Executive of Eagle Eye, said:

"Eagle Eye's outstanding performance in FY23 demonstrates we have the right strategy, offering and team in place to support our continued strong growth as an increasingly international business.

"In the current difficult economic environment, retailers are turning more and more to data driven, personalised promotions and rewards as one of the most effective ways to drive increased trade and retain customer loyalty. Eagle Eye's central position as the technology that enables the execution of these programmes means we are becoming increasingly relevant, providing further growth opportunities.

"We have entered FY24 in a strong position with considerable momentum across the Group. We are particularly excited by the opportunity for EagleAI, our new AI offering launching in 2024, building on the capabilities brought into the Group with the acquisition of Untie Nots.

"The quality of our team, offering and business model, alongside an expanding market opportunity, provide us with confidence in the continued success and significant long-term growth potential of Eagle Eye."

About Eagle Eye

Eagle Eye is a leading SaaS technology company enabling retail, travel and hospitality brands to earn the loyalty of their end customers by powering their real-time, omnichannel and personalised consumer marketing activities.

Eagle Eye AIR is a cloud-based platform, which provides the most flexible and scalable loyalty and promotions capability in the world. More than 750 million personalised offers are executed via the platform every week, and it currently hosts over 100 million individual loyalty members for businesses all over the world. We are trusted to deliver a secure service at hundreds of thousands of physical POS destinations worldwide, enabling the real-time issuance and redemption of promotional coupons, loyalty offers, gift cards, subscription benefits and more.

The Eagle Eye AIR platform is currently powering loyalty and customer engagement solutions for enterprise businesses all over the world, including Asda, Tesco, Morrisons, Waitrose and John Lewis & Partners, JD Sports, Pret a Manger, Loblaws, Southeastern Grocers, Giant Eagle and the Woolworths Group.

In January 2023, the Group acquired France-based Untie Nots, an AI-powered personalised promotions business, adding Carrefour, E. Leclerc, Auchan and other leading brands to its European customer base.

Chairman's Statement

I am delighted to again be reporting to shareholders on another year of outperformance by the Eagle Eye team, delivering growth ahead of the Board's initial expectations. These results clearly demonstrate the business can deliver sustained high levels of organic growth and successfully complete complementary acquisitions, as evidenced by the acquisition of Untie Nots.

This will be my last Chairman's statement, and as I look back on my time with Eagle Eye, it is remarkable the extent to which the business has evolved in recent years - considerably expanding its offering, customer base, financial strength and geographic reach - becoming the established leading provider of personalised digital marketing capabilities to tier 1 retailers, globally. When I joined as a Non-Executive Director in 2014, taking on my role as Chairman in 2016, it was clear that the future of Eagle Eye was an exciting one. It has been a pleasure to be part of the Group's journey on the public markets and I am confident there is the right Board and team in place to take the business to its next stage of growth. Importantly in these times, the business has also proven its ability to successfully navigate challenging economic backdrops, such as the COVID-19 pandemic and the current inflationary environment, while maintaining strategic focus. With its incredible customer base and underlying growth drivers, the future for Eagle Eye is brighter than ever.

Eagle Eye has a clear vision, mission and purpose, and our unique 'Purple' way of working is in large part made up by our values which are celebrated on a daily basis throughout the organisation. Our team are passionate about our customers, passionate about our offering and is setting the standard for service levels globally.

Momentum is strong at Eagle Eye, with the Group delivering across all areas of the customer strategy, underpinned by supportive market drivers.

One recent trend worth noting that will have a significant impact on the industry is the rapid advancement of Artificial Intelligence (AI). We believe Eagle Eye will be a key enabler for AI-driven personalisation in the coming years as we continue to play a central role in executing omnichannel personalisation at scale for the world's leading retailers. In addition to that, the Group is also planning to expand into the data and analytics space by launching an AI-based promotion personalisation offering, EagleAI, in 2024. This is incredibly exciting and is expected to significantly increase Eagle Eye's addressable market in the coming years.

Financial Results

The Group enjoyed strong trading momentum throughout the Year, delivering revenue growth of 36% to £43.1m (FY22: £31.7m) and underlying organic revenue growth of 29%, excluding the contribution from Untie Nots. Adjusted EBITDA³ increased by 36% to £8.8m (FY22: £6.5m) and profit after taxation increased by 114% to £1.2m (FY22: £0.6m). This growing level of profits has driven strong cash generation and the Group closed the year with a net cash⁴ position of £9.3m at 30 June 2023 (30 June 2022: £3.6m), providing the business with the continued ability to invest to support future growth.

The Group continues to benefit from high levels of recurring revenue, providing a strong basis for continued positive performance, with growth in Annual Recurring Revenues* of 40% to over £33m at 30 June 2023 (2022: £23.9m).

ESG

As a Board and business, we are committed to high standards within all areas of ESG and made good progress against our stated objectives during the Year, building on our existing foundation of responsible business practice. Measuring our progress against set KPIs, which we commenced in FY21, and our focus on how we can make Eagle Eye a better business has provided us with a clearer picture as to where to commit our efforts.

As a 'Virtual First' business and outsourcing the running of our infrastructure to key suppliers, our carbon emissions as a business are naturally low, although we have seen an increase in air travel following the lifting of lock down and the increasing geographic spread of the business, as we support customers and continue sales and marketing activities globally. This has, as in previous years, been offset by the planting of trees. We also ensure our key suppliers monitor and have targets around their environmental impact.

Central to everything we do at Eagle Eye is our belief in following the Golden Rule - treating people as they would like to be treated. This is at the very heart of personalisation with the AIR platform being used by retailers globally to help them follow the Golden Rule when engaging with their own customers. Internally, this manifests itself in our people-first culture where the business places the success and happiness of its people at its heart. On behalf of the Board, I would like to thank all the team for their commitment to creating exceptional value for our customers, always working in accordance with our stated values.

We fully recognise the importance and value of high standards of corporate governance and always look to maintain our strong corporate governance framework, following the principles of the QCA Corporate Governance Code. After more than 12 years with the Company, long-standing Non-Executive Director and founding external shareholder, Bill Currie, retired from the Board in March 2023. We are incredibly grateful for all the support and guidance he provided in his time with Eagle Eye and wish him the very best. We were delighted to welcome Charlotte Stranner to the Board as an Independent Non-Executive Director in May 2023, who brings a wealth of experience in both the listed technology company arena and the adjacent world of digital advertising. As notified in September 2023, I will also be stepping down from the Board at the forthcoming AGM, following 9 years with the Company. In Anne de Kerckhove, my successor, the Board has found a highly experienced and driven individual who I am sure will be a fantastic steward of the business for all stakeholders.

Opportunity

The market in which Eagle Eye operates is expanding, as retailers globally develop their omnichannel capabilities to address the rapidly changing consumer shopping behaviours, particularly in the current cost-conscious climate. Eagle Eye expects the shift towards digitisation and personalisation to continue to accelerate and for Eagle Eye to be a beneficiary of that acceleration, as retailers globally continue to recognise the strategic importance of real-time delivery of personalised offers. How to harness the power of AI is a key topic of debate across all retailers and we believe the lead we have in this area, through the Untie Nots acquisition and the AIR platform's ability to deliver hyper personalised messages to consumers at speed and scale, places us in the ideal position to be a key enabler of these advancements.

Eagle Eye is an ambitious business with a passionate team. With such a considerable opportunity ahead, we will continue to invest in order to innovate and grow, building on our position as the digital marketing platform of choice for tier one retailers globally.

This ambition, together with the Group's growing ARR, profitability and cash generation, means the Board looks to the future with confidence. 

Malcolm Wall, Non-Executive Chair

CEO Statement

This has been another outstanding year for Eagle Eye. We successfully delivered across all areas of our customer strategy in every target geography, while also completing the acquisition of Untie Nots, a rapidly growing, AI-powered gamification promotions company, bringing new capabilities, customers, and talented team members into the Group.

These successes led to strong revenue growth in the Year, achieving an increase of 36% to £43.1m and an increase in adjusted EBITDA³ of 36% to £8.8m. This growing level of earnings is flowing through into positive cash generation, providing us with the ability to invest to support our future growth. Profitable growth is an important measure for the Group, reflecting the discipline with which we invest in the business.

The strength of our SaaS business model is once again evidenced by our strong metrics, with ARR¹ up 40% to £33.3m, NRR strong at 137% and churn low at 0.2%, providing a strong basis for continued expansion.

We have an exceptional team at Eagle Eye who are dedicated to creating value for our customers through building and delivering great technology to some of the world's biggest businesses and best loved brands. Their energy fuels the momentum in the business. We, in turn, are committed to providing them with fantastic opportunities to accelerate their careers.

We have continued to invest, to support our increasingly international customer base, drive our win rate and strengthen our position as a leader in personalised digital engagement for tier-1 retail. Core areas of investment include the expansion of our operational team, increased investment into sales and marketing, and our continued investment into the scalability and flexibility of our technology.

We continue to expand across all key geographies, with particularly strong growth in the US and Australia in the Year, as we deepen our engagements with key customers in these regions. Our strategic partnership with Google continues to deepen, and we are already seeing this generate new sales and additional opportunities for the Group.

Our strong performance over the last 12 months across all key territories reflects the growing relevance of our loyalty and promotions platform at a time when digital engagement with consumers has never been more important.

Market opportunity and competitive strength

The overarching competitive strength of the AIR platform is its ability to deliver real-time loyalty and customer engagement initiatives, enabling retailers to treat each of their customers in the way they would like to be treated - as individuals. The platform can scale to deliver any type of personalised marketing message to any customer across any channel securely and at enterprise scale. This ability is resonating with retailers around the world, as they become increasingly aware that data driven, personalised promotions and rewards are one of the most effective ways to drive increased trade and retain customer loyalty.

Personalisation at scale is becoming increasingly more important

In this cost-conscious climate, customer engagement propositions are key ways for retailers to be able to deliver tangible value to their customers. In a recent global loyalty study conducted by Eagle Eye, 84% of consumers felt that more personalised offers would enable them to access additional value to help them save at the shelf but almost a third of global loyalty programme managers surveyed admitted that delivering personalised offers was one of their biggest challenges.[1]

This clearly demonstrates the need for retailers globally to develop their omnichannel capabilities to address the rapidly changing consumer shopping behaviours and the opportunity for Eagle Eye to solve those retailers' challenges by offering a platform that is flexible, scalable and one that seamlessly integrates into their existing marketing ecosystem.

We are seeing retailers across the globe launch new, sophisticated customer engagement initiatives to deliver additional value to customers. This has been done through member pricing, personalised pricing, subscription schemes and more. There has been significant innovation in this space across sectors, from Liberty's 'Beauty Drop' subscription to Pret a Manger's 'Club Pret' and Woolworths Australia's 'Everyday Extra' subscription, as well as the flurry of activity in the UK grocery sector regarding member pricing, creating an expanding market opportunity for Eagle Eye.

AI presents an additional market opportunity

The development in the field of AI represents an enormous opportunity for the future of scaling Eagle Eye. I am particularly pleased that, at this early stage, we have three tangible areas for progression.

a)    Continue to be the leading enabler of advanced analytics and AI

Recent developments in AI across the retail industry demonstrate that personalisation is going to be easier for all types of retailers globally to adopt, which presents an exciting opportunity for Eagle Eye's AIR platform. Working with some of the biggest and most advanced retailers in the world, we have always worked closely with data analytics firms and, more recently, AI technologies and businesses, which help our client base understand what the next best message to send to each customer is, and when to send it. This personalised marketing is then executed at scale, across all channels, via our AIR platform.

As retailers all over the world enhance their data science and AI capabilities, the market opportunity for Eagle Eye will increase as these businesses will need the technology in place to enable them to execute against the insights that they are now able to generate. We believe that we are the only platform in the world that can deliver personalised marketing at the required speed and scale to keep up with AI-led personalisation which will be powering more engaging and more relevant experiences for the end customer. As a result, we look forward to working with more businesses across more geographies and verticals to act as the execution platform to deliver omnichannel personalisation at scale.

b)    Launching our own AI-powered offering for retailers globally - EagleAI

Through the acquisition of Untie Nots we gained great new customers, an increased geographical reach and a fantastic team, many of whom have deep experience using and developing AI solutions for retailers. Untie Nots' AI-based SaaS solution which powers personalised and gamified continuity promotions or 'Challenges', has been a great addition to our product portfolio.

To further capitalise on the exceptional AI talent we now have within our business, Eagle Eye's sales and marketing executives and Untie Nots' development teams have been working together to build a new offering, EagleAI, which uses AI to autonomously create the right personalised offers to send to the right customers. By using our AI offering rather than traditional data science techniques, retailers will be able to create one to one experiences for each of their customers using a fully automated stack of AI algorithms to optimise product affinity, stretch and reward levels for each individual customer. EagleAI is unique in that it has been built specifically for retailers, a sector both teams understand deeply. We believe that EagleAI could be sold as both a standalone offer picking product or in conjunction with AIR, whereby the EagleAI decisioning would feed into the AIR platform, enabling the AI-derived personalised offers to be executed in real time across all channels.

We are currently working on a pilot and believe this offering can open up a considerable additional addressable market for Eagle Eye, following its launch in 2024.

c)     Using AI to enhance our tech stack and development capabilities

Internally, we are exploring how AI can be applied to our own internal projects, processes and tools to continue to the run the business in a Better, Simpler, Cheaper way. It is in its early stages, but we believe this will be an important way of reducing toil whilst maximising the time we can spend on innovation and product development. We expect AI to be the capability that enables further efficiencies within Eagle Eye which in turn could drive higher margins to allow us to reinvest into the business to support our continued growth.

Delivering against our five strategic pillars for growth

1.    Customer strategy: Win, Transact, Deepen

We continued to successfully deliver across the three areas of our customer strategy in the Year - Win, Transact and Deepen.

·      'Win': bring more customers on to the Eagle Eye AIR platform;

·      'Transact': drive higher redemption and interaction volumes through the platform; and

·      'Deepen': encourage our customers to adopt more of our product portfolio as they become more adept at digital marketing.

Win

Each new win adds substantial additional value given our high level of customer retention, and revenue from our largest revenue-generating customers typically increases by a multiple of over three times by the end of their third year on the AIR platform, through both increased use of the platform and the addition of new services.

The Group delivered a steady level of "Win" related revenue for the Year, which included extending our reach into new territories.

New customer highlights include a multi-year contract with Morrisons to provide promotion and loyalty services, a multi-year loyalty contract with Hudson's Bay Company in Canada and IKEA Taiwan, our second IKEA subsidiary.

We also facilitated Untie Nots' entry into the Singapore market, securing a multi-year contract with Singapore's largest retailer, NTUC FairPrice Co-Operative Ltd ("FairPrice").

We have introduced a range of initiatives to increase our future win rate, including: the acquisition of Untie Nots, which provides a quicker 'win' product, with several positive joint conversations already underway; a partnership with Google Cloud, providing an additional source of leads; and increased investment in our marketing activity. As a result, we are seeing an improved level of leads in the pipeline and have entered FY24 with a strong new business pipeline. Wins post year end include a three-year contract with an Australian retailer, increasing our presence in the region.

Partnerships provide additional strength and access to potential customers

We have a clear and considered strategy to work with other 'Best in Class' partners within the marketing ecosystem to provide a digitally connected experience across the shopping journey both at home and in-store from the shelf to the register. Our strategy enables us to engage and partner with several relevant businesses, where we are able to extend our sales and marketing reach and ultimately bring more customers on to the AIR platform.

In the Year, we deepened our strategic partnership with Google, firstly through our Google Cloud Partner Advantage accreditation in H1, giving us access to Google's training, co-marketing and technical resources. Importantly, we also launched Eagle Eye on Google Marketplace, making it easier and more cost effective for enterprise Google users to discover, purchase and deploy Eagle Eye AIR. In the first six months of launching, we have already transacted our first two enterprise deals, being Morrisons and FairPrice. We have engaged with the Google sales teams in each of our key regions and in June 2023 our senior team were invited to meet senior Google executives at Google's offices in California.

We also deepened our relationships with key partners across the spectrum of the marketing ecosystem including rolling out our Oracle Simphony integration to a number of other brands internationally and new partnerships with Salesforce. We continue to partner with Neptune Retail Solutions ("NRS"), with whom we are targeting the vibrant and highly active Consumer Packaged Goods ("CPG") digital coupons market in North America. Together with NRS we are working closely to deliver for two of our major clients in the US which continues to progress well. We remain focused on revitalising and modernising how CPG companies can engage shoppers digitally through personalised promotions.  

Transact

Chargeable AIR redemption and loyalty interaction volumes, a key measure of usage of Eagle Eye AIR, increased by 98% to 3.3 bn (2022: 1.7 bn). We continue to benefit from the accelerated ability to take these customers live into the Transaction phase.

Growth in transaction and subscription revenue was driven by the Woolworths Group contract in Australia reaching full-scale, the full go-live of a large grocer in the U.S., and the national rollout of Asda's loyalty programme, Asda Rewards. Eagle Eye AIR powers Asda Rewards, operating the offer and reward management within the app - which was number one in the UK app store for six weeks post-launch[2], the membership card, star products, missions, and cashpot as well as the creation and redemption of vouchers through its integration with Asda's point-of-sale systems. Nearly five million customers now use the Asda Rewards app every month and have been growing their cashpots to help reduce their grocery bills. In June 2023, Asda announced that more than £100m had already been earned into cashpots during the first half of the year[3].

Deepen

A key part of our strong performance has been the considerable increase in use of the AIR platform by our existing customers, as reflected our strong NRR of 137%. This is due to the significant increase in interest in our promotion and loyalty offerings as retailers look to enhance the way they retain and reward their customers, particularly with the cost-of-living crisis continuing to tighten household budgets.  The new capabilities and cross-sale capability from our acquisition of Untie Nots have provided increased opportunities to deepen our contractual relationships with existing customers. Pleasingly, our long-term contract customer churn rate by value remains very low at below 1% with good levels of renewals taking place.

Key deepen successes include a new five-year contract with The John Lewis Partnership, a new pan-partnership loyalty project launching in 2024 alongside dunnhumby. This brings together Eagle Eye's existing relationships with John Lewis, first announced in 2017 to improve John Lewis's digital marketing capabilities, and with Waitrose, subsequently announced in 2019. 

We also significantly deepened our relationship with Pret a Manger in the period, supporting them in relaunching their coffee subscription as 'Club Pret'. In this new model, Eagle Eye enables Pret to offer their subscribers 10% off all products and five barista made beverages a day for the monthly cost of £30. This re-launch was swiftly followed by the Eagle Eye-powered Pret 'Gold Card', available for all employees to manage their team member discount.

Further customer expansions include Staples US retail and the deepening of our partnership with Mitchells & Butlers through the launch of its Staff Rewards app as well as an app targeting suppliers, providing discounts at venues across the UK.

2.    Innovation

Innovation sits at the heart of everything we do at Eagle Eye. As one of six core company values, we pride ourselves on innovating both with and for our customers to deliver value which ultimately helps the businesses we work for better delight their end customers. Innovation has enabled us to continually deliver new solutions to the market in the Year which differentiate us and enable us to provide added value to our core enterprise customer base. Innovation is in our DNA and we will continue to celebrate our teams for delivering new capabilities as it is critical to our future success.

During the Year, we have grown significantly, onboarding new customers in new geographies and Deepening the services we provide to them. We are now servicing more than 90,000 unique outlets globally, up 15% vs. the prior year. From a platform point of view, this has meant a continued focus in the period on ensuring we can match this fantastic growth, delivering against the needs of our current, new and future customers all over the world when it comes to our product's speed, scale and flexibility.

Extending the digital marketing toolkit

Eagle Eye AIR provides retailers with a comprehensive digital marketing toolkit, but we continue to innovate in this space to enable us to deliver an even more flexible and extensive set of use cases to our customers to power their leading customer engagement initiatives. In the period, we have deployed more than 60 new features, including new promotion types (e.g. quest campaigns), extensions to existing product capabilities (e.g. message at till), delivered new ways for retailers to reward their customers (e.g. social and behavioural rewards), and have packaged up a number of new, enterprise ready direct-to-consumer APIs (e.g. delivering digital and mobile services to our customers). In addition to this, we have built new features that will support us as we enter new verticals and geographies (e.g. pending points and a set of mobile ready APIs which enable easier integration).

Continuing to lead with personalisation, speed and scale

As we extend our toolkit, we also innovate to ensure that we can meet the needs of our growing customer base when it comes to speed and scale. We currently have more customers than ever transacting more than ever through our platform and so we are continually working to improve performance to ensure that we can deliver more, faster. Currently, in an average month, we issue more than 2.5 billion offers to customers worldwide, distribute more than 185 billion loyalty points into millions of unique wallets and process more than 6.7 billion API calls across the AIR platform. We continue to make use of the best technologies that cloud has to offer, significantly improving the overall performance of our AIR platform and to scale the overall running of the platform, maintain lightning response times whilst we build more and more capability. As a result of our investment into this area of the business, we are able to process these ever-increasing volumes at ever-faster speeds.

In the Year we have applied hundreds of new rules and permutations to our cloud-based adjudication engine, POS Connect. This enables retailers to achieve levels of individual personalisation with their customers that has never been seen before, at an unprecedented speed and scale.

Delivering value faster

This year we were excited to launch our Eagle Eye Academy across the world. This bespoke training platform gives our customers the ability to get up to speed more quickly on how to get the most value out of Eagle Eye AIR. The Academy contains a full array of courses available to take online, with learning paths for different parts of our platform. Initial feedback both from our internal teams and from customers has been fantastic. This, coupled with best practice guides for integration, enabling our API documentation to be available online and automating the configuration of the platform means that customers can start to get value from AIR from day one.

3.    International growth

The benefits of our investment into international expansion are evident, with the deepening of our clients' engagements in the US and Australia, as mentioned above, and initial customers secured in Southeast Asia. As a result, we have seen significant revenue growth from the US (+129%) and APAC (+56%) in the Year. 35% of the Group's total revenue now comes from the US (2022: 21%). We now have a much broader international footprint, adding France, Germany and Singapore following a year of expansion, providing a wider funnel for opportunities going forward.

International marketing activities

We made initial investments into Singapore and Germany as well as additional direct sales resource in North America, targeting the considerable US promotions and loyalty market and, as a result, marketing activities stepped up to support the sales resource investment in these regions. We plan to further increase our sales and marketing activities throughout FY24, with a particular focus on investing into North America and France, in line with our strategy to invest as we 'Win'.

Investment has been made into lead generation campaigns to drive more inbound leads into the sales pipeline as well as an events programme that included the Tech For Retail Show in France, Groceryshop in the US, breakfast briefings with major retailers in Singapore, Thailand and Malaysia, and NRF, the most influential retail conference in the US. Eagle Eye also joined key trade associations including GS1 Switzerland, California Grocers Association, FMI, Australian Loyalty Association and NRF to raise awareness amongst loyalty professionals and increase networking opportunities. These activities led to a considerable increase in leads compared to FY22 with converted leads up 61%.

We are also encouraged by the initial marketing activities being carried out with Untie Nots, individually and jointly, building the pipeline both in the UK but predominantly internationally. Untie Nots is leveraging our more extensive sales and marketing expertise and strong customer network which has led to encouraging conversations. Untie Nots' contract win with NTUC FairPrice Co-Operative Ltd in Singapore demonstrates the benefit to Untie Nots of Eagle Eye's international marketing reach, and we look forward to continuing building a promising joint international sales pipeline.

4.    Better, Simpler, Cheaper

As a business we strive to maximise our productivity and efficiency and look for ways to benefit from our increasing scale as we continue to invest in innovation and growing the business.  We have developed a proven business model to grow our EBITDA margin, whilst also investing, as we 'Win', in sales & marketing and enhancements to the product to generate new opportunities for growth.

On the 'Better' side we have invested in new tooling to help us manage the AIR platform more effectively, as described above, resulting in availability of 99.97%. We continue to upskill our staff and have again invested in our technical staff to achieve Google Cloud Certifications as well as building an internal library of resources and collateral, and launching our Eagle Eye Learning Academy internally and externally. We successfully recertified our ISO27001 across all our offices globally, as well as continuing our SOC2 Type II certification.

As ever, we have continued to look at how better to onboard our clients and the volume and speed of new clients in the Year shows the great work done in this area with more to come in the new financial year. Security is always a huge focus for the Group, and we continue to invest in this area by moving to a continuous assurance, always on monitoring, backed by expert third parties who monitor our platforms and the dark web for possible threats 24/7.

Our people and beliefs

Firstly, I'd like to take this opportunity to thank Malcolm Wall, who will retire as Chair following this year's AGM. Malcolm has been an incredible support to me and this business over the past nine years and his importance cannot be overstated. He has provided significant guidance since Eagle Eye joined AIM and we have all benefitted from his extensive experience and knowledge. On behalf of the whole Company, we thank him for his service and wish him all the very best for the future. Our new Chair, Anne de Kerckhove, who will join the Board in October as Non-Executive Director before assuming the Chair role at the close of the AGM, brings a wealth of experience in the technology, media and entertainment industries and high growth, international businesses and we look forward to working with her. I'd also like to thank our long-standing Non-Executive Director, Bill Currie, who after 12 years on the Eagle Eye Board stepped down following the Group's interim results in March 2023. We are incredibly grateful for all the support and guidance he has provided in his time with Eagle Eye and wish him the very best.

The central tenet of Eagle Eye is to create value for our customers. This drives what we do, and we believe it is key to making a successful business. All the value we create is thanks to our brilliant employees.

Integration with the Untie Nots team has been smooth, as we are aligned with in both our values and culture, and now we have an even larger team of people who are dedicated to developing market leading technology that delivers value to some of the biggest industry names around the world.

At Eagle Eye we have a clear vision, mission, and purpose, and a unique 'Purple' way of working that we curated and follow because we believe it influences our lives and the world for the better. Our Purple Playbook, introduced last year and given to every member of our team, celebrates the evolution of Eagle Eye and explains our belief that by following the 'Purple Method', we will continue to grow together.

Our commitment to our ethos, purpose and Purple Method helps us deliver value to clients, which we track through our NPS score. We are incredibly proud of our latest score of +66 which is significantly higher than the Technology Industry benchmark of +35. We celebrate the contribution of our people both at our Annual Company Conference and throughout the Year through our Purple Values Awards.

Last year we launched our 'Purple Pathways' career development programme, which supports employees in developing their careers at Eagle Eye and advancing into new roles Pathways is an interactive tool which employees navigate, which shows the critical skills required for progression and the type of experiences or training that could be provided. It is fantastic to see our team members already reaping the benefits of the programme, with more than 52% of employees now having a formal development pathway in place. In addition, we designed and implemented our bespoke Purple Leaders training - focusing on eight core modules essential for existing and aspiring managers as part of their Pathways. We believe that having a great boss is one of the most important ingredients for workplace happiness and success and are therefore thrilled that 100% of our current managers have already taken part in this training programme.

As part of our onboarding process, we run a bespoke programme called Life Skills for all new starters. This introduction to cognitive behavioural therapy is an investment into our new starters to help them become the best version of themselves.

In the Year we launched our new Wellbeing policy which is underpinned by our value of Passion. Our vision statement is that we are "passionate about your mental and physical health, and we place your wellbeing at the heart of our culture" and as part of the new policy we have delivered a range of initiatives to achieve this vision, including mental health training, fitness sessions and risk assessments to ensure safe working at home.

As part of our ongoing commitment to charity work and to create a positive and engaged work environment, we continue our partnership with 52 Lives, a charity built around the concept of 'kindness' who find individuals who need help and then deliver it. Every month, we recognise the individual that our efforts have helped and during the course of the Year, run a series of employee-generated fundraising events.

Our 'Purple Women' initiative continues to effect positive change in the workplace and champions policies that offer parents more flexible working patterns, enhanced leave packages, and additional support on their return to the work; together with education and support of health-related issues impacting employees. During Pride month in June 2023, we also launched a 'Purple Pride' initiative that aims to create a safe workspace for all employees, celebrating our individuality and encouraging everybody to be themselves. Looking, ahead we will continue to evolve our employee development programmes, succession planning and diversity and inclusion efforts. We remain committed to continuous improvement and investment in its employees and making Eagle Eye a great place to work.

Of the many 'Simpler' initiatives across the teams, a few notable successes include the move to Terraform which allows us to standardise and control our environments globally in a more structured way, and the use of Financial Force now rolled out across our Delivery teams to help us manage their effectiveness and project allocation.

In terms of running the business 'Cheaper', our KPI of Google Cloud Platform spend percentage against recurring revenue is the indicator we have been using to monitor our Google Cloud spend. This year we have averaged 20.5% by closely monitoring and taking on initiatives to drive us forward in our goal to become more cloud native and serverless. We successfully migrated to PubSub for our messaging service, and we continue in our drive to become more efficient and resilient by the use of cloud native tooling.

The acquisition of Unite Nots provides immediate synergies, such as cloud hosting costs and the ability to offer them our extensive sales and marketing expertise, as described above. We now have the combined sales and marketing efforts of our two companies in our arsenal, enabling us to streamline our efforts and reduce costs.

Our people costs represent 65% of the operating costs of the business in the Year (FY22: 65%) and we recognise they are our biggest asset. Our business model continues to allow us to use remuneration as one of the levers to reward and retain our best people. Continued investment into the new year is built into our plan each year, in line with the model we have developed. We continue to review average industry wages and are comfortable we are well placed to manage any rises in the year ahead.

5.    M&A

We successfully completed the acquisition of Untie Nots in January 2023, a rapidly growing SaaS company enabling retailers to deliver AI-powered, personalised spend-stretch challenges to customers at scale which are profitable by design. The acquisition provides us with accelerated entry into the French market, brings some of Europe's largest grocers into the Group, adds to our growing roster of US clients and provides a wealth of cross-sale opportunities for both businesses. Importantly, the Untie Nots team have been able to benefit from becoming part of our more advanced sales and marketing organisation, considerably expanding the reach for their innovative technology. The Untie Nots team also bring additional capabilities and deep experience of using and developing AI solutions for retailers.

In just a few months post-acquisition, we are already seeing the benefits of working together. Introduced by Eagle Eye, Untie Nots secured a contract with FairPrice, Singapore's largest supermarket chain, in May 2023. This was the first win for the Group in the region and demonstrates the benefit to Untie Nots of Eagle Eye's international marketing reach, and the speed of the sales cycle for the Untie Nots offering. It is also testimony to the benefit of our own investment into international expansion and we continue to build a promising international sales pipeline, alongside Untie Nots.

The success of the acquisition and mutual benefit to both businesses provides us with a blueprint for further acquisitions, and we continue to assess the market for new opportunities.

Outlook

We have entered FY24 in a strong position with a growing pipeline and considerable momentum across the Group. Trading in FY24 to date has been in line with the Board's expectations.

In the current difficult economic environment, retailers are turning to data driven, personalised promotions and rewards as one of the most effective ways to drive increased trade and retain customer loyalty. Meanwhile, advances in technology, such as generative AI, are making personalisation more accessible for a wider range of retailers. Eagle Eye's central position as the technology that enables the execution of these programmes means we are becoming increasingly relevant, providing further growth opportunities.

The Group continues to successfully manage inflationary pressures and the underlying growth and flexibility of the Company's business model mean that we can invest into the business and people with confidence to support future growth. The successful acquisition of Untie Nots demonstrates the benefit we can bring to other businesses looking to scale, and we continue to assess the market for earnings enhancing acquisition opportunities.

We have a growing addressable market, high profile customers in multiple geographies, an outstanding team and a high-quality business model driving growth in revenue, profits and cash generation. Alongside this, developments within AI and the clear demand from our customer base and wider retail sector, means we are very excited about the future of Eagle Eye.

Tim Mason, Chief Executive Officer

Financial review

Key Performance Indicators

⁽¹⁾ Adjusted EBITDA excludes costs associated with the acquisition of Unite Nots SAS, share-based payment charges along with depreciation, amortisation, interest and tax from the measure of profit and is reconciled to the GAAP measure of profit before taxation in note 5.

⁽²⁾ Adjusted Profit before tax excludes costs associated with the acquisition of Unite Nots SAS.

⁽³⁾ Net cash is cash and cash equivalents less borrowings.

Group results

Revenue

Revenue growth for the Group was 36% for the Year (FY22: 39%), with the contribution to H2 from Untie Nots building on top of the strong organic growth in revenue of 29%.

The Group's Annual Recurring Revenue¹ (ARR), which is our period exit rate for recurring AIR and Untie Nots subscription and transaction revenue, plus any professional services contracted for more than 12 months hence and secured new wins, excluding any seasonal variations and lost contracts, increased by 40% to £33.3m (FY22: £23.9m). The growth rate in ARR is higher than the overall revenue growth due to subscription and transaction revenue increasing to 80% of total revenue (FY22: 76%) as the use of our services increases with our largest Tier 1 clients across the globe, as well as benefitting from the impact of the acquisition of Untie Nots. The increased use of the platform can particularly be seen from the 63% increase in AIR transactional revenue to £15.7m (FY22: £9.7m).

Professional services revenue increased by 12% to £8.6m (FY22: £7.6m). Under IFRS 15, a SaaS business will typically recognise revenue (including implementation revenue from professional services) over time. In some cases, this means implementation revenue is now recognised over the period the service is live. Therefore, during the period of implementation for a new client, which is typically between two and six months, no revenue will be recognised, although directly attributable associated costs are also spread over the same period, matching revenue and costs. Revenue from professional services that has been deferred into future periods, but delivered and billed, was £5.8m at 30 June 2023 (30 June 2022: £3.0m).

The Group has maintained a strong Net Revenue Retention² (NRR) rate, which is the improvement in recurring AIR revenue excluding new wins in the last 12 months. In FY22 our NRR benefitted from the recovery in the Food & Beverage sector from the impact of Covid-19. Excluding the Covid-19 recovery impact NRR for FY22 was 137%; in FY23 this has been maintained due to continued successful deepening of existing accounts, including increased transactional revenue.

Chargeable AIR redemption and loyalty interaction volumes, a key measure of usage of the AIR platform, increased by 98% to 3.3bn (FY22: 1.7bn), ahead of the growth in recurring subscription and transaction revenue, reflecting increasing transactional usage of the platform by all our international grocery clients, in particular for loyalty transactions where we have seen key customers such as Woolworths moving through their contract cycle with volumes from the Everyday Extra subscription increasing within their existing licence and transection fee charging bands.

In addition to winning new business, including Morrisons, IKEA Taiwan and Hudson Bay, a substantial Canadian retailer, and deepening existing relationships, the Group successfully maintained an extremely low rate of long-term contract customer churn by value at 0.2% (FY22: 0.2%). This reflects the scale and breadth of the AIR platform's offering in meeting our customers' needs.

SMS messaging revenue increased from the prior year, despite strong cost headwinds in this commoditised market, to £2.4m (FY22: £2.2m). This reflected inflationary increases with volumes of messages sent down 1% to 65.3m (FY22: 68.3m) driven by those clients who recognise the benefit of an omni-channel strategy and which have integrated their High Street stores and their eCommerce offering, including JD Sports and Pets at Home. Consistent with previous guidance, SMS is expected to continue to represent a decreasing proportion of the Group's revenue in future years.

Gross profit

Gross profit grew 38% to £41.0m (FY22: £29.6m), with gross margin at 95% (FY22: 94%) as the contribution to revenue from the lower margin SMS business continues to reduce.

Costs of sales includes the cost of sending SMS messages, revenue share agreements and outsourced, bespoke development work. All internal resource costs are recognised within operating costs, net of capitalised development and contract costs.

Adjusted operating expenses

Adjusted operating costs increased 39% in line with the growth in gross profit to £32.2m (FY22: £28.9m) as the business has invested in line with our planned growth investment model. These operating expenses, which exclude costs of £1.3m associated with the acquisition of Untie Nots SAS, represent sales and marketing, product development (net of capitalised costs), operational IT, general and administration costs.

The 39% increase in staff costs to £26.1m (FY22: £18.8m) primarily reflected an increase in average headcount for the Year which was up 36% to 222 (FY22: 162), including the impact of the acquisition of Untie Nots. In addition, reflecting the inflationary pressures seen in all territories, we had built into our operating model increased annual pay awards which were made in January 2023. We continue to invest in developing our products, and in sales and marketing to support our growth plan; within staff costs, gross expenditure on product development increased to £6.9m (FY22: £5.2m) and sales and marketing spend was £4.8m (FY22: £3.7m).

IT Infrastructure costs grew at a slower rate than recurring revenue growth by 23% to £8.1m; representing 23% of recurring revenue (FY22: £6.5m; 27% of recurring revenue) as the Group benefited from investment in infrastructure for its overseas regions in FY22 in advance of the significant increases in volumes seen in FY23, with work continuing to optimise the efficiency of our infrastructure as we continue to grow. Capitalised product development costs increased to £2.6m (FY22: £2.2m), whilst amortisation of capitalised development costs was £2.5m (FY22: £2.3m). Contract costs (including costs to obtain contracts and contract fulfilment costs), recognised as assets under IFRS 15, increased to £2.8m (FY22: £2.7m), reflecting the high level of new wins during the Year, and amortisation of contract costs was £1.7m (FY22: £1.3m).

Adjusted EBITDA and profit/(loss) before tax

The strong revenue performance and continued controlled investment spend have resulted in continued growth in organic adjusted EBITDA margin to 21% (FY22: 20%). Reflecting its earlier stage of growth, EBITDA margin for Untie Nots was 4%, resulting in an adjusted EBITDA margin for the Group of 20%, in line with the prior year. The acquisition of Untie Nots and the timing of inflationary pay awards and investment for growth meant that Group EBITDA margin fell to 18% in H2 23 compared to 23% in H1 23. Adjusted EBITDA was up 36% at £8.8m (FY22: £6.5m) for the Year. To provide a better guide to the underlying business performance, adjusted EBITDA excludes the costs of the acquisition of Untie Nots along with share-based payment charges, depreciation, amortisation, interest and tax from the measure of profit. The GAAP measure of operating loss before interest and tax was £(0.6)m (FY22: profit of £0.7m) reflecting the increased amortisation as a result of intangibles recognised under IFRS 3 on the acquisition of Untie Nots of £1.3m and the increased non-cash share-based payment charge of £2.4m (FY22: £1.9m), reflecting the successful revenue and EBITDA performance this year and the strong position the Group continues to be in to deliver increased revenue and profits, which are reflected in future, performance related, vesting assumptions, offset by the EBITDA earnt in the Year.

The Group aims to manage the business to at least achieve the Rule of 40 (Revenue growth + Adjusted EBITDA margin = 40), with an expectation that the Adjusted EBITDA margin achieved for the Group will be at least c20% on an annualised basis. In FY23 our result versus this metric was 56 (FY22: 59).

The loss before tax for FY23 was £(0.8)m (FY22: profit of £0.7m), reflecting the reduction in operating loss before interest and tax. Net finance expense increased to £0.14m (FY22: £0.05m) reflecting the partial utilisation of the Group's revolving loan facility towards funding the acquisition of Untie Nots, along with the higher interest rates seen during the Year.

Profit after tax, EPS and dividend

The improvement in underlying profitability during the Year, in particular in the UK, has allowed the Group to forecast the recovery of taxable losses brought forward from prior years with more certainty which has resulted in an additional deferred tax asset of £1.6m, reflecting historic losses brought forward now being recognised. Along with the continued successful R&D tax credit claims in the UK and France, this has resulted in an overall tax credit of £1.9m in FY23 (FY22: charge of £(0.1)m).

As a result, the Group's profit after taxation increased to £1.2m (FY22: £0.6m) and reported basic earnings per share improved to 4.25p (FY22: 2.12p) with diluted earnings per share of 3.79p (FY22: 1.86p).

No dividend is proposed this year (FY22: £nil) as the Group continues to invest in a managed way to pursue our growth strategy.

Group Statement of Financial Position

The Group had net assets of £24.0m at 30 June 2023 (30 June 2022: £8.6m), including capitalised intellectual property of £5.3m (30 June 2022: £3.5m). The movement in net assets reflects the acquisition of Untie Nots along with improved EBITDA performance in the Year and the exercise of share options during the Year.

Current assets increased by £8.3m primarily due to revenue growth, aligned with an improvement in debtor days to 49 (FY22: 61 days) and higher EBITDA, generating cash in the Year, along with an increased current tax receivable, primarily due to the French R&D tax credit. Liabilities increased by £9.0m primarily due to increased deferred income arising from the treatment of billed revenue for new implementation fees and professional services under IFRS 15, along with higher bonus and commission accruals, reflecting the revenue and EBITDA growth in the period, the term debt acquired with Untie Nots which is used to manage Euro working capital requirements, and the deferred and contingent consideration due on the acquisition of Untie Nots.

Cashflow and net cash

The Group ended the Year with net cash of £9.3m (30 June 2022: £3.6m), exceeding the Board's prior expectations. Excluding costs associated with the acquisition of Untie Nots, the underlying net cash inflow for the Year was £7.0m (FY22: £2.8m). Overall net cash inflow for the Year was £5.7m.

The main components to the net cash inflow were:

·      the operating cash inflow of £12.3m (FY22: £7.4m), reflecting the EBITDA profit (unadjusted for the acquisition of Untie Nots) of £7.5m (FY22: £6.5m), a working capital inflow of £3.9m (FY22: £1.5m outflow) and net tax receipts of £0.9m (FY22: net payments of £0.6m). The £2.4m improvement in working capital primarily arose as a result of increased income deferred under IFRS 15 and enhanced focus on reducing debtor days;

·      net proceeds from the issue of equity during the Year, primarily in relation to the acquisition of Untie Nots, of £7.1m;

·      offset by capital investment in the AIR platform and other infrastructure of £2.6m (FY22: £2.4m), as well as contract costs capitalised under IFRS 15 of £2.8m (FY22: £2.7m);

·      payments in respect of leases of £0.2m (FY21: £0.1m); and

·      £6.3m consideration and costs paid for the acquisition of Untie Nots, net of cash and debt acquired.

Banking facility

The Group has remained comfortably within its banking covenants which relate to the Group's debt ratio and adjusted EBITDA performance. During the Year, the Group's primary banker at the time, Silicon Valley Bank, encountered financial difficulties and US financial regulators closed SVB US, subsequently selling it to First Citizens Bank, while SVB UK was purchased by HSBC and subsequently renamed HSBC Innovation Bank. As a result of successful mitigating actions at the time, the Group maintained access to sufficient liquidity to support the Group's ongoing working capital requirements and to deliver the Group's stated growth strategy throughout the period of uncertainty. Following the respective acquisitions, no Eagle Eye funds were at risk of loss. However, the Group has subsequently revised its treasury policy such that exposure to the failure of one bank is minimised.

In light of the economic environment, and our increasingly global customer base, we have taken the step of hedging elements of our foreign currency net receipts to ensure that the Group is protected from significant and sudden adverse movements in foreign currency exchange rates. There were no open hedges at 30 June 2023 (30 June 2022: none).

The Group continues to hold a £5.0m revolving loan facility with HSBC Innovation, with an additional £2.5m accordion facility available, subject to credit approval at the time. This provides the business with security and flexibility over its financing options to deliver on its growth aspirations. The Group's gross cash of £10.6m (FY22: £3.6m) and the £4.0m undrawn portion of its £5.0m facility (FY22: £5.0m undrawn), less £0.3m debt of Untie Nots, gives the Group £14.3m of headroom, which, allied to growing levels of profitability and organic cash generation, the Directors believe is sufficient to support the Group's current organic growth plans.

Lucy Sharman-Munday, Chief Financial Officer

Consolidated statement of profit or loss and total comprehensive income

for the year ended 30 June 2023

Consolidated statement of financial position

as at 30 June 2023

Consolidated statement of changes in equity

for the year ended 30 June 2023

Consolidated statement of cash flows

for the year ended 30 June 2023

Notes to the consolidated preliminary financial information

1    Basis of preparation

The financial information set out herein does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the Year ended 30 June 2023 has been extracted from the Group's audited financial statements which were approved by the Board of Directors on 18 September 2023 and which, if adopted by the members at the Annual General Meeting, will be delivered to the Registrar of Companies for England and Wales. 

The financial information for the Year ended 30 June 2022 has been extracted from the Group's audited financial statements which were approved by the Board of Directors on 20 September 2022 and which have been delivered to the Registrar of Companies for England and Wales.

The reports of the auditor on both these financial statements were unqualified, did not include any references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006.

The information included in this preliminary announcement has been extracted from the audited financial statements prepared in accordance with UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006 and the International Financial Reporting Interpretations Committee (IFRIC) interpretations issued by the International Accounting Standards Board ("IASB") that are effective as at the date of these financial statements.

The Company is a public limited Company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange.

2    Going concern

As part of their going concern review the Directors have followed the guidelines published by the Financial Reporting Council entitled "Guidance on the Going Concern Basis of Accounting and Reporting on Solvency and Liquidity Risks- Guidance for directors of companies that do not apply the UK Corporate Governance Code".

The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the date of approval of these consolidated financial statements. In developing these forecasts, the Directors have made assumptions based upon their view of the current and future economic conditions that will prevail over the forecast period.

On the basis of the above projections, the Directors are confident that the Group has sufficient working capital and available funds to honour all of its obligations to creditors as and when they fall due. In reaching this conclusion, the Directors have considered the forecast cash headroom, including the impact of the revolving credit facility with HSBC Innovation Bank and the covenants associated with it, the resources available to the Group and the potential impact of changes in forecast growth and other assumptions, including the potential to avoid or defer certain costs and to reduce discretionary spend as mitigating actions in the event of such changes. Accordingly, the Directors continue to adopt the going concern basis in preparing these consolidated financial statements.

3    Segmental analysis

The Group is organised into two principal operating division for management purposes. These reflect the organic Eagle Eye business and the newly acquired Untie Nots business. All non-current assets are held in the United Kingdom, other than the right of use asset relating to the lease for the Paris office of Untie Nots.

Revenue is analysed as follows:

4    Earnings per share

The calculation of basic earnings per share is based on the result attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the Year. The calculation of diluted earnings per share is based on the result attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year, diluted for the effect of options being converted to ordinary shares. Basic and diluted earnings per share from continuing operations is calculated as follows:

5    Alternative performance measure                            

Adjusted EBITDA is a key performance measure for the Group and is derived as follows:

6    Net cash     

Net cash is a key performance measure for the Group and is derived as follows:

7    Business combinations

On 3 January 2023, Eagle Eye Group plc completed the acquisition of 100% of the issued share capital of Untie Nots SAS. The consideration for the acquisition was made up of initial cash consideration of €9.1m and €5.9m worth of newly issued shares in Eagle Eye Group plc. Further consideration of €0.7m was paid on 3 July 2023 following the finalisation of certain tax affairs related to the period prior to the acquisition. Contingent consideration is due to be paid in FY25 subject to specific revenue targets being achieved in the year to December 2024 and achievement of a minimum EBITDA margin. The contingent consideration included in the goodwill calculation is a discounted probability weighted value, payable to those vendors who are not employees of the Group. Contingent consideration due to vendors who are required to remain employees of the Group to earn the consideration will be expensed through the income statement in accordance with IFRS 3.

8    Report and Accounts

A copy of the Annual Report and Accounts for the Year ended 30 June 2023 will be sent to all shareholders in due course, together with notice of the Annual General Meeting, and will be available to view and download from the Company's website at www.eagleeye.com