Trading Statement

Big Technologies PLC

19 January 2024

 

19 January 2024

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

Big Technologies plc

("Big Technologies" or the "Company" and the "Group")

Trading Update

Big Technologies plc, the UK-based remote people monitoring technology company, issues the following trading update ahead of the announcement scheduled for 26 March 2024 of its full year results for the year ended 31 December 2023.

The Group has continued to perform in line with the board's expectations with revenue for the year ended 31 December 2023 expected to be approximately £55 million (2022: £50.2 million) and adjusted EBITDA to be approximately £33 million (2022: £30.5 million). These results are in line with current market expectations¹.

Outlook for 2024

Revenue from our contract to provide electronic monitoring services to one of our larger customers, based in Colombia, is expected to end during the first half of 2024. This contract has been subject to short term renewals since September 2021. A number of recent new contract wins are expected to partially offset the potential revenue loss from Colombia.

During the second half of 2023, we have significantly expanded our business development efforts in the US market, the largest market in the world for electronic monitoring and substance detection. We expect this investment to accelerate sales growth in the medium term, but the additional costs are expected to reduce operating profit margins in the US in 2024 until new sales are realised.

As a result of these developments, we expect Group sales for 2024 to be at least at the level achieved in 2022. More detailed guidance for 2024 will be given at the time of our results in March when the outcome in Colombia is known with greater certainty.

The Group continues to see opportunities to expand market share and scale-up the business and is in the process of releasing its first innovative substance detection technology to priority customers. We have enjoyed contract renewals across the business and won a number of new customers in recent months which will start to contribute revenues during 2024 and 2025. A return to growth is expected for 2025 and beyond.

^{1: The Company has compiled forecasts from four analysts with current market forecasts for 2023 revenue to be in the range of £54.0 to £54.5m, with a consensus of £54.3m, and for adjusted EBITDA to be in the range of £32.7m to £32.8m, with a consensus of £32.7m.}

Sara Murray OBE, Chief Executive Officer, commented:

 
"In difficult market conditions, 2023 has seen the Group deliver a strong performance with continued growth in sales, profits and our cash reserves. We continue to invest in the business and in our market-leading suite of monitoring products and expect to see growth in the coming years. We are obviously disappointed with the outcome in Colombia, with a customer that we have served well for a number of years. We see a pipeline of attractive business opportunities around the globe and will continue to work diligently to replace this revenue stream."

For further information please contact:

Big Technologies	[phone]
Sara Murray (Chief Executive Officer) Daren Morris (Chief Financial Officer)
Zeus (Nominated Adviser and Sole Broker)	[phone]
Jamie Peel / Dan Bate / Kieran Russell  (Investment Banking) Benjamin Robertson (Equity Capital Markets)

About Big Technologies

Big Technologies is the parent company of Buddi, which was founded in 2005 by its current CEO, Sara Murray, following an initial idea to create a GPS device small enough for a child to carry. Today, Big Technologies is a proven supplier of innovative and high-quality products and services to the remote personal monitoring industry. Big Technologies provides products and services under a number of brand and trading names, with 'Buddi' being the most well-known and being used in respect of activities within the core criminal justice market. Big Technologies (under the buddi brand) has created a leading, integrated technology platform (including both hardware and software solutions) for remote monitoring of individuals, providing state-of-the-art Electronic Monitoring (EM) solutions on a SaaS-like, subscription basis.

Electronic Monitoring in the criminal justice sector involves utilising location technologies to remotely monitor and manage people at all stages of the criminal justice system. The Company's focus on the Criminal Justice market in the immediate term has been demand-driven, with significant opportunities created by a combination of favourable market tailwinds as electronic location devices are increasingly recognised as alternatives to imprisonment, and superior technological capability enabling the Company to meet this demand effectively.

Big Technologies' criminal justice solution has been iteratively developed over a 10-year period, utilising the knowledge of an experienced management team listening to customers.  The solution consists of a proprietary software platform with modular monitoring hardware, capable of being adapted to multiple applications. The Company's criminal justice solution is principally focussed around the "Buddi Smart Tag", an electronic monitoring hardware device, and "Buddi Eagle", the in-house developed, cloud-based monitoring software. Collectively, the hardware and the intelligent tools integrated into Big Technologies' software enable real-time tracking of monitored individuals with high levels of accuracy and reliability. Buddi evidences a substantial reduction in false alerts when compared to competitor systems which, combined with the reduction in subsequent investigations, can result in substantial cost savings for customers.

In addition to the high levels of accuracy, the Buddi Smart Tag has several key advantages over its competitors' devices. The tag is lighter, smaller, has longer battery life and offers a simple, contact free and shorter installation process, providing substantial staff cost savings for customers. This superior product design, coupled with the intelligent monitoring software, typically comes at a small price premium to competitor devices. However, the overall effectiveness and reliability of the solution, combined with the substantial cost savings delivered as a result of reduced monitoring costs, have helped Big Technologies deliver strong revenue growth from both existing and new customers. The Company leases its devices and software solutions to customers typically based on daily or monthly rates.

 

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