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DJ Primorus Investments PLC Engage Technology Investor Update

TIDMPRIM

RNS Number : 5934G

Primorus Investments PLC

07 November 2018

Primorus Investments plc

("Primorus" or the "Company")

Engage Technology Investor Update Received

Primorus Investments plc (AIM: PRIM, NEX: PRIM) is pleased to provide shareholders with an update on its investment in the SaaS ("Software as a Service") end-to-end workforce software vendor Engage Technology Partners ("`Engage") by way of an update received by Primorus from Engage. Primorus has invested a total of GBPGBP1.4m in Engage made up of GBPGBP400,000 at GBP15 per share and GBPGBP1.0m at GBP22 per share.

This update follows on from information provided in the Primorus Q3 Report announced on 24 October 2018 and please note that some areas of content of the Engage Report is deemed commercial in confidence however Engage have kindly allowed us to transmit some of the information for the benefit of Primorus shareholders.

Highlights;

-- Strong construction market penetration via VMS ("Vendor Management System") sales to Tier 1 construction companies. Post-period reporting 75 live Corporate Clients with a further 17 contracted pending going live.

-- Significant corporate interest from global software vendors and aggregators in Engage products and the Engage platform. Discussions with multi-party potential corporate investors accelerate.

-- Collaboration with California-based Jumio to incorporate and integrate their global RTW ("Right To Work") verification solution into the Engage platform.

-- Completed several keenly awaited critical first version self-serve product units including OSP ("Outsourced Payroll Product") and PAYE for Temps allowing the entire platform to attain a level of self service across the offering.

-- A product scaling refinement has reduced the run-rate average monthly revenues to below management forecasts. Pleasingly product engineering has already mitigated this specific issue.

-- Projected platform revenues expected to accelerate into Q1 2019 and point of maximum product development spend reached in October and cashflows heading back towards breakeven in 2019.

Alastair Clayton, Executive Director, commented:

"We are pleased to report a summary of a very positive Quarterly Report received from Engage and I am happy to be able to share what I am allowed to with shareholders. It is clear the Engage team continue to win business at an impressive rate and what is noteworthy is the speed with which the Engage VMS product has penetrated the market. With several key self-service product deliveries dropping in the Quarter we are closely watching the platform's ability over the coming few quarters to automate the on-boarding process and generate globally scalable revenues from its existing and future customers.

We invested in Engage not because of its immediate revenue generation, and there was a (now mitigated) revenue miss this quarter as outlined above, but because we believe the viral nature of the platform has the potential to totally disrupt the existing software offerings servicing this huge global sector. What is most pleasing is that we have begun to see the first signs that the sales aspect of the Engage platform is both viral from the bottom of the supply chain upwards but also top down from large corporates seeking solutions for their UK and overseas operations.

I believe that, should the trajectory of client wins, and product delivery, continue to grow as they are, we will begin to see the revenue gain pace and grow exponentially over the coming quarter or two as all the benefits of taking the time (and money) to build a truly globally scalable, self-service, pure SaaS platform begin to pay off. Engage have taken a more difficult path to deliver a better revenue outcome.

As with many of the private businesses we meet, I see the biggest risk for Engage as one of executing small short-term financings in a market dominated by large, Private Equity and Venture Capital investors. Make no mistake, just because Engage needs modest amounts of money to execute its plan, it doesn't mean the resulting company cannot, in my opinion, be a global market force.

We are aware that whilst this strategy may not fit the standard large investors "cookie-cutter" investment criteria, it does fit ours. Judging by the significant corporate interest being shown in the Engage platform by other specialist investors, global HR software vendors and aggregators, I am confident that we are not alone."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information, please contact:

 
 Primorus Investments plc:         +44 (0) 20 7440 0640 
 Alastair Clayton 
 
 Nominated Adviser:                +44 (0) 20 7213 0880 
 Cairn Financial Advisers LLP 
 James Caithie / Sandy Jamieson 
 
 Broker:                           +44 (0) 20 3621 4120 
 Turner Pope Investments 
 Andy Thacker 
 

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November 07, 2018 02:00 ET (07:00 GMT)