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Fissara Limited Investment Review - Jan 2017
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Status Update
- Since investment completion in July 2016, the business has fallen behind revenue targets but it has managed costs so that margin and EBITDA remain ahead of budget.
- Meanwhile it has successfully established a strong pipeline of trials and pilots - this should see an improvement in performance in the medium term.
- Fissara has completed an encouraging pilot with a large engineering company (AMCO) with the objective to now move towards a full divisional roll out.
- An agreement has been reached with Clarke Telecom (Telco Infrastructure) for a paid pilot.
- o2, the international mobile operator, has agreed to a second project that provides evidence that Fissara can offer solutions for global enterprises with complex requirements.
- A new branding strategy is being implemented at the Company, as most noticeably demonstrated with the launch of the www.fissara.com website.
- The Company has made some additional hires to support its expansion plans. The offshore (India) development team has doubled in size and generated improvements in both quality and in productivity.
- In December 2016 the Fissara software platform won the Best Technology Product Award 2016 at the Talk of Manchester business awards.
- In January 2017, David Harding (ex-CEO of William Hill) will join the board as an Observer to support the business and provide ongoing monitoring on behalf of Growthdeck investors.
Investment Overview
| Company name | Fissara Limited (name changed 15/12/16) |
| Investment vehicle | UK Limited company |
| Principal business activity | Software tool to allow companies to more effectively manage remote workers & assets |
| Growthdeck investors investment | £403,500 |
| Investment completion date (first close) | July 2016 |
| Growthdeck investors equity | 20.18% |
| Growthdeck investors protections | Investor Representative consent required for key company actions |
| Growthdeck involvement | Investor representative on Board monitoring performance |
Trading Performance
| Year End March (£'000) | 2016 Budget |
2016 Actual |
2017 Budget |
| Turnover | 316 | 260 | 952 |
| Cost of Sales | (209) | (113) | (470) |
| Gross Profit | 107 | 147 | 482 |
| Gross Profit (%) | 34% | 57% | 51% |
| Overheads | (299) | (280) | (630) |
| EBITDA | (192) | (133) | (148) |
* Management Accounts for Apr to Oct 2016
Cash Update
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Given the delay in revenue generation, the management team has carefully managed cash with expenses remaining below budget as noted.
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At financial year end (October 2016) Fissara had cash reserves of £326k against a budgeted cash position of £276k. Some of this surplus capital can be explained by a delay in recruitment due to difficulties in identifying appropriate developer (Java & mobile) candidates.
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Growthdeck continues to work with the company to raise additional equity funding (circa £100k) to provide some further cash contingency for the business.
Exit Planning
- There are no updates to report in terms of exit planning - it is still anticipated that a trade sale to major software vendors or IT providers in a 2019/20 timeframe is the most likely liquidity event.
Summary
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Performance since completion of the July 2016 round has been variable. Good cost control has conserved cash and kept loss to below that budgeted for.
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Whilst the number of product trials and pilots with high quality names has been impressive, this has yet to translate to material commercial commitments.
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Recruitment of staff has been an ongoing challenge but the Company is now making progress in strengthening the team with appointments necessary to fulfil the business’s potential.
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Fissara is deepening engagements and building credibility with a number of large corporates that the management team hopes will establish long term and profitable relationships.
