FreeAgent revenue soars 41% following IPO

Edinburgh-based accounting software firm FreeAgent, which went public last year, said its revenue increased 41% to £8 million for the year ended March 31, but it made a net loss of £2.9 million “including share-based payment expense of £0.8m as the group continues to invest in scaling its business.”

FreeAgent said its gross profit increased 38% to £6.6 million.

Earlier this year FreeAgent, which provides accounting software for “micro” businesses, won a major contract with The Royal Bank of Scotland Plc to offer RBS business account customers access to FreeAgent’s software.

FreeAgent chief executive Ed Molyneux said: “The oversubscribed IPO validated our firm belief that AIM is the right capital environment to achieve our goal of building an enduring, market-leading position in our industry and beyond.

“I am delighted that I am able to affirm the confidence of our investors and report growth in line with or exceeding market expectations in this, our first full year results as a quoted company …

“As outlined in our AIM admission document, our focus on micro-businesses (those with fewer than 10 employees, which comprise 95% of all businesses in the UK) contrasts markedly with our principal competitors who position themselves more towards the ‘small’ businesses universe of 5-50 employees.

“We continue to see strong structural growth in this UK micro-business market, with self-employment continuing to rise faster than growth in numbers of larger businesses.

“In recent months we have also learned more detail around the HMRC’s ‘Making Tax Digital’ (MTD) agenda, which represents the biggest change to tax administration in the UK for a generation.

“All businesses except the very smallest (those with turnover below £10,000) will be required to manage their tax affairs digitally, and update HMRC at least quarterly with summary accounting information.

“HMRC has confirmed that some businesses will start to be impacted from April 2018 and by 2020 all businesses will be within the MTD regime.

“FreeAgent is well placed to support these businesses as MTD progresses.”