# Actual Experience turnaround substantially completed

- Link: https://www.directorstalkinterviews.com/actual-experience-turnaround-substantially-completed/4121121482
- Published: 2023-06-12T07:16:13+01:00
- Author: Emily Johnson

**Actual Experience plc** ([LON:ACT](https://www.directorstalkinterviews.com/company/actual-experience-plc/act.l)),
the Digital Workplace Management Platform (DWMP) company, has announced its unaudited
consolidated interim results for the six months ended 31 March 2023.

**Financial Highlights**

·      Revenue of £0.23m (H1 FY22: £0.82m)

·      Gross loss of £0.07m (H1 FY22: £0.35m)

·      Operating loss of £2.54m (H1 FY22: loss of £2.84m)

·      Loss per share of 1.16p (H1 FY22: loss per share of 4.97p)

·      Cash and cash equivalents at 31 March 2023 of £3.10m (30 September 2022: 
£2.87m)

**Operational Highlights**

·      Successful early commercial release of the new Digital Workplace Management
Platform (DWMP) in October with Defra, leading to the first sale of the Company’s
new product offering less than 6 months after launching.

·      Significant automation of the delivery process for DWMP content, significantly
reducing the load on manual resources and facilitating operational leverage.

·      Sales pipeline increasing due to a combination of reinvigorated partner relations
and the bolstering of the sales team.

·      Several significant pipeline opportunities progressed to advanced stages 
in the funnel during the period.

·      Further strengthening of the Board with the addition of two highly experienced
Non-Executive Directors.

·      Recruitment of an experienced CEO after the period end, marking the beginning
of the next phase of the Company’s growth. 

**Current trading and outlook**

·      Market demand is reflected in the increasing volume of interest in Digital
Workplace Experience (DEX) as shown by commentary from Gartner and Forrester. Organisations
will prioritise investment in technologies that optimise their digital infrastructure
for the new era of hybrid working, often termed ‘the new ways of working’. The Company’s
board believes that it is in a strong position to capitalise on this significant
market opportunity.

·      Feedback from partners and enterprises for our recently launched DWMP continues
to be very positive, and we will seek to maintain our technology leadership by developing
a rich roadmap of features and capabilities.

·      With the recruitment of an experienced CEO, the turn-around phase is largely
complete and resources are increasingly focused on optimising sales execution to
deliver strong revenue growth.

·      Immediate focus remains on generating orders from our more advanced sales
opportunities. In addition, sales and marketing outreach campaigns are delivering
increased numbers of prospects into our sales pipeline and we will seek to ensure
efficient progression through the sales stages.

·      Our first DEX customer, Defra, remains an important relationship for Actual,
and we will seek to expand the size and scope of this deployment while also working
to engage with other central government departments.

·      We will continue to tightly manage operating expenses and seek to derive 
further economies while investing in sales and marketing activities.

> **_Kirsten English, Chair of Actual Experience plc, said:_** “As detailed in the
> 2022 Annual Report, Actual Experience has implemented fundamental and extensive
> changes to the business in the last 12 months. Since the beginning of the current
> financial year, the Company has completed the goals that were set by the Board
> for this turnaround phase, and the focus will now move to execution and growth
> with predictable revenue and strong customer fulfilment at the top of the agenda.
> With the new CEO, fresh ideas and a proven track record of execution will open
> the next chapter for Actual Experience.”

> **_Iain McCready, CEO of Actual Experience plc, said:_** “I’m delighted to be 
> joining Actual at this important time. The measures taken by the Board and Leadership
> team over the last year have positioned the Company to leverage its excellent 
> technology to establish a leading position in the rapidly developing DEX technology
> market sector. My focus will be to translate this potential into strong revenue
> growth through effective sales and marketing execution.”

**Market**

As the emerging technology category of Digital Employee Experience (DEX) continues
to gain rapid momentum, analysts are increasingly emphasising its importance and
commenting that this will become a major area of enterprise focus and investment
in the coming years.

The market definition and scope of what DEX entails is still in its infancy, with
an element of confusion arising from multiple technology suppliers promoting differing
visions, each aligned to their individual capabilities.

With a standardised approach yet to be defined within the market, Actual’s DWMP
offering is well placed to provide a practical starting point for enterprise DEX
transformations. The Company’s proprietary HX Score is unique in its capability 
to provide a reliable baseline of the overall employee experience of the digital
workplace as well as delivering a prioritised list of improvement projects, ranked
by business impact and enterprise value creation. The Company’s technology is quick
to deploy and is partner agnostic, meaning it forms an ideal foundation to any wider
DEX transformation programme.

**Product development**

At the beginning of the period, the Company launched an early release of its newly
built DWMP. During a six-month pilot, the team worked closely with the customer,
Defra, to understand their use of the insights and data, making iterative improvements
month-on-month. The DWMP showed quantified before and after productivity savings
due to improvements made by the customer. At the end of the pilot, the Company was
delighted to announce the first sale of the new platform. The Actual Experience 
team were praised for their deep knowledge of the complex area of Digital Experience
Management and the usefulness of the DWMP insights, which allow firms to navigate
successfully through transformational change over the total enterprise.

Following the early commercial release, the CPO set up a new cross-functional process
encouraging the sales and customer facing teams to connect openly with the R&D and
product functions within the business. The Company remains committed to building
and improving the DWMP based on tested market problems to ensure the commercial 
viability of the platform.

After the period end, the next version of the product was released, with extensive
improvements and new features including a new Equality Grade metric (which models
how even the distribution of digital wellness is across an organisation) to better
support business leaders with DE&I initiatives. 

In addition to customer-facing improvements, the Company also made substantial progress
in automating the customer insights creation process, reducing the amount of manual
resource needed to service clients on a continuous basis.

Several new development opportunities have been identified to increase the Company’s
product portfolio, including a lighter version of the platform with a number of 
use cases and a regulatory based tool to track the impact of hybrid working patterns
on scope 3 carbon emissions. 

**Sales & Marketing**

During the period, Actual continued to apply the lessons learned from early engagements
with prospective customers and further refined its sales focus and approach, both
in terms of partner projects and direct sales efforts. This has led to positive 
sales pipeline development, with increased numbers of active prospects and also 
good momentum through the various sales stages. This progress has been further supported
by greater enterprise awareness of, and focus on, the need for transformation of
their digital infrastructure to ensure efficient business processes in the more 
complex, hybrid working environment.

As noted in the Company’s Annual Report, sales cycles remain lengthy, and efforts
to reduce this have been hampered by the challenging general business environment
and, specifically, the weak macroeconomic conditions. Notwithstanding this, several
of our sales engagements are now progressing to the point where customer decisions
will be made, and we hope to be able to announce further customer orders in the 
near future.

Over the period, the Company has formed a strong market positioning based on learnings
from the sales cycles and the commentary on the emergent DEX category. A key priority
moving forward will be to re-establish a marketing function within the business 
to further drive sales activities.

**Strategy**

As a small company with market-leading technology, we will continue to leverage 
our existing strong relationships with Verizon and Vodafone while putting in place
further sales and technology partnerships with leading technology companies. In 
this way, we are planning to achieve significant market penetration by accessing
our partners’ large global enterprise customers.

At the same time, our direct sales team will continue to engage directly with prospective
customers to ensure we continue to understand evolving market requirements and trends.

Typically, new enterprise sales engagements will commence with a subset of the total
addressable opportunity in each account, such as employees in a region, country,
or division. Over time, we expect that the initial engagement will expand to address
the whole digital estate. This is the approach adopted with Defra, and we term this
a ‘land and expand’ strategy.

As well as growing our customer base in this way, a further driver of top-line growth
is expected to arise from new product expansion initiatives that are planned in 
our development roadmap. An example of this is the opportunity to develop further
our work that leverages our existing technology to estimate the carbon impact (scope
3 emissions) of commuting and business travel dynamics across an organisation.

This product development road map is aimed at ensuring we maintain our technology
leadership in the DEX sector. In addition, we will continue to enhance the scalability
of our service clouds, driving down per-seat costs and ensuring that we can handle
the demands of the world’s largest enterprises.

**Board Changes**

The Board has been significantly strengthened in the period by the appointment, 
in October 2022, of Harmesh Suniara and Barry Hoffman, in February 2023. Harmesh
and Barry bring to the board extensive experience in capital markets and people 
management respectively. After the period end, in June 2023, we welcomed Iain McCready
to the board as CEO and Executive Director.

After almost ten years of service, Stephen Davidson stepped down from the board 
in March 2023 and his contribution to the development of the Company is appreciated.

**Outlook**

With the recent appointment of a new CEO, the turnaround of the Company is now largely
complete. Management and the board are now keenly focused on taking the business
to the next stage of growth and achieving its strategic objectives.

Since launching the new platform at the start of the current financial year, the
Company continues to receive consistent and positive feedback from both commercial
prospects and partners alike, as demonstrated by a growing sales pipeline and reinvigorated
relationships with our partners. In late May 2023, after the period end, the Company
completed development on the next version of the platform, enhancing the offering
based on market feedback. This resulted in significant improvement in both the capability
and usefulness of the data. Furthermore, several promising additional value creation
opportunities have been identified and the resulting rich product development roadmap
will lead to value-enhancing adjacent features and capabilities. 

The Digital Employee Experience (DEX) category is emergent and there remains a general
lack of clarity for business leaders on how to deliver effective digital workplaces.
Actual’s platform is outcome-oriented, which means it is perfectly placed within
the market to guide customers through these complex, enterprise-wide transformation
projects. 

This requirement is clearly a market problem which the DWMP can address, as shown
in current RFIs and RFPs that the Company has been invited to participate in. Working
closely with leading analysts as well as investing in marketing and brand building
will be key to the growth of the business and maintaining the Company’s technology
leadership position. Actual’s ability to support multiple business leaders by quantifying
the ROI of improvements to productivity, reportable ESG efforts and employee wellbeing
remains a unique capability in the market. 

The Company has progressed with its sales strategy and execution and has achieved
a first sale for the new DWMP within 6 months of launch. There are several advanced
sales engagements in the pipeline that are expected to lead to outcomes in the coming
months. It is also noted that due to the current macroeconomic climate SaaS sales
cycles are lengthening; however, the Company has put significant focus on communicating
the productivity element of the insights which can estimate the operational dollar
recovery of identified projects, thus adding critical value for potential customers
as cost optimisation efforts become prevalent across the market. 

Actual Experience has delivered the milestones set out a year ago. There is a new
team, a new SaaS product and a first, contracted client using that product. In the
interim, the Company has seen the appetite for Digital Workplace Experience tools
increasing in the market and are uniquely placed to take advantage of this trend.
The new CEO has a track record of taking companies and instilling execution and 
delivery and this is now the strategic focus. There is a clean slate to build upon
and the path ahead is clear.

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