HØNEFOSS, Norway, Nov. 5, 2024 /PRNewswire/ — SmartCraft ASA, the leading Nordic provider of mission-critical SaaS solutions to small and mid-sized companies in the construction sector, today reported its results for the third quarter of 2024, with continued solid revenue growth, strong cash flow, but margins impacted by dilutive acquisitions and one-off items.
Reported revenue in the second quarter grew 32 percent year-on-year to NOK 132 million, of which 94 percent was recurring. During the third quarter, SmartCraft has started to transform the business models in the newly acquired companies to increase their recurring revenues, which has a short-term impact on revenues and margins, but drives both revenues and margins over time.
The adjusted EBITDA-capex margin was 25.3 percent (33.8% in Q3 23), including a negative effect of 4.4 percentage points from acquired companies and a further negative effect of 4.1 percentage points, partly from one-off initiatives in the quarter to increase scale and synergies. Customer revenue churn in the third quarter was slightly up to 8.3 percent. Operating cash flow was 34 million, up 58 percent year-on-year.
“The demand for digital solutions remains high in the construction industry, and with a challenging macroeconomic backdrop, we are pleased with delivering double-digit organic growth in annual recurring revenue (ARR) in the third quarter. From the second to the third quarter, we added NOK 13 million in ARR, to a record-high growth of 3 percent, lifting ARR to NOK 474 million,” said CEO of SmartCraft Gustav Line and continued:
“The ARR growth since the third quarter last year was 29 percent, including the contribution of the acquisitions of Clixifix in the UK and Locka in Sweden. This underpins our strong long-term record with 28 percent compounded annual growth since 2019.”
The acquisition of Clixifix, concluded in the second quarter 2024, was SmartCraft’s first expansion outside the Nordics.
“The entry to the UK opens a huge opportunity space, increasing our total addressable market to NOK 50 billion, and we have already started multiple projects to explore organic growth and additional acquisitions with Clixifix as a base. I am also pleased to see that the Clixifix operation itself is performing well with significant year-on-year margin improvement and recurring revenue growth above 30 percent,” said Gustav Line.
SmartCraft’s SaaS solutions are primarily aimed at small and medium-sized businesses in the renovation segment, a part of the construction industry which normally is less affected by the soft macroeconomic conditions than the broader construction segment. At the same time, the improving economic outlook in Sweden positively influences trade.
“Three interest rate cuts in Sweden so far this year have resulted in increased optimism within the construction industry and led to accelerating revenue growth for SmartCraft Sweden. This is a good indication of what to expect in Norway when interest rates come down in this market too. All in all, we stay positive about our prospects and reiterate our target of 15-20 percent organic revenue growth in the medium term. Similarly, we expect the adjusted EBITDA margin to increase due to the scalability of the business,” said Gustav Line.
The third quarter 2024 report and presentation materials are enclosed.
WEBCAST PRESENTATION
Investors, analysts, and journalists are welcome to join an English-language webcast presentation of the report today, Tuesday 5 November 2024, at 08:00 CET.
Webcast link: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20241105_2
Presenters: CEO Gustav Line and CFO Kjartan Bø
Viewers are welcome to submit written questions through the webcast player during and after the presentation. A recording of the presentation will be available on the same link and at https://smartcraft.com/investor-relations/ immediately after the live stream is concluded.
DISCLOSURE REGULATION
This information is considered to be inside information pursuant to the EU Market Abuse Regulation, and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
CONTACTS
Gustav Line, CEO, +47 952 67 104, gustav.line@smartcraft.com
Kjartan Bø, CFO, +47 410 27 000, kjartan.bo@smartcraft.com
ABOUT SMARCRAFT
SmartCraft is the leading Nordic provider of mission-critical SaaS solutions to SMEs in the construction sector, increasing their productivity, margins, and resource efficiency. The Group currently has more than 13 300 customers and 260 employees distributed across Norway, Sweden, Finland and UK. SmartCraft was listed on the Oslo Stock Exchange in June 2021.
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