SmartCraft ASA (SMCRT) – Q4 2023: Continued growth with high margins, reduced churn, and strong cash flow

14 February 2024 - 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 fourth quarter of 2023, ending the period with annual recurring revenue (ARR) of NOK 387 million, which represents a growth of 21 percent compared to the same period 2022. Organic ARR growth was 14 percent.

Reported revenue in the fourth quarter was NOK 107 million (+18 percent), of which 97 percent was recurring. Adjusted and reported EBITDA margin was 39 percent. Operating cash flow was NOK 32 million in the fourth quarter, compared to NOK 29 million in the same period last year. For the full year 2023 operating cash flow was 153 million, up 32 percent compared to 2022, and net profits were 115 million, an increase by 71 percent. In the fourth quarter the group had a churn of 7.2 percent, a reduction from 7.9 percent in the third quarter of 2023.

“We ended 2023 with another strong quarter of growth and profitability, and I am happy to be able to highlight the strength and scalability of our business model. Our clients work on renovation rather than new construction, which is a great strength to us as the renovation segment is bigger than the new build part of the industry and has proven to be less volatile, growing steadily over the last years, supported by an ongoing digitalization of the construction industry. Combined with our SaaS based model this implies predictability and low risk related to our development, said SmartCraft's CEO Gustav Line.

The good development in 2023 provides SmartCraft with solid growth momentum for 2024.

“We are working hard and systematically across our brands with marketing on digital and traditional platforms. This has resulted in a 23 percent rise in customer leads in the fourth quarter compared to the same quarter in 2022 which gives us great revenue opportunities in 2024. At the same time, the constant development of digitalization and professionalization of the construction industry represents a strong long-term megatrend for our business. Our software solutions enable small- and medium-sized construction companies to enhance their productivity and earnings, which is more important than ever. We remain confident in our medium-term financial target of 15-20 percent organic growth and increasing margins due to the scalability of the business,” said Gustav Line.

In addition to the organic growth, SmartCraft is actively pursuing an acquisition strategy, and in 2023 the company made its tenth acquisition, Coredination in Sweden.

“We have a good pipeline of potential acquisition objects, and our history of improving profitability and growth in acquired companies is convincing. At the same time, we will remain disciplined regarding capital allocation,” said Gustav Line.

- ENDS -

WEBCAST PRESENTATION

Investors, analysts, and journalists are welcome to join an English-language webcast presentation of the report today, Wednesday 14 February 2024, at 08:00 CET.

Webcast link:

https://channel.royalcast.com/landingpage/hegnarmedia/20240214_3/

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.

CONTACTS  

* Gustav Line, CEO, +47 952 67 104, gustav.line@smartcraft.com  

* Kjartan Bø, CFO, +47 410 27 000, kjartan.bo@smartcraft.com

ABOUT SMARTCRAFT ASA

SmartCraft is the leading Nordic provider of mission-critical SaaS solutions to SME's in the construction sector. The company's business model is highly scalable, based on 97% recurring revenue and low churn. The construction sector is among the least digitalized industries and represents a NOK 10bn software market in the Nordics, growing at a double-digit rate. SmartCraft's solutions help customers to increase their productivity, margins, and resource efficiency.