THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SHARES IN THE CAPITAL OF THE COMPANY, NOR SHALL IT (OR ANY PART OF IT), OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH OR ACT AS ANY INDUCEMENT TO ENTER INTO, ANY CONTRACT OR COMMITMENT WHATSOEVER.

13 February 2014

Actual Experience plc
(“Actual Experience” or the “Company”)
Admission to AIM

Actual Experience plc (AIM: ACT), the analytics as a service company, is pleased to announce that it has applied for all of the Issued Ordinary Shares of the Company to be admitted to trading on the AIM Market of the London Stock Exchange (“Admission”). It is expected that Admission will become effective and dealings in the Ordinary Shares will commence at 8.00 a.m. today.

The science behind the Company’s software was developed over the last 10 years at Queen Mary’s University of London. This technology enables Actual Experience to measure the digital world as users experience it, enabling customers of the Company to measure and improve the performance of the business applications that they provide to their staff and their own clients, reducing costs while improving the experience of the user.

Admission Details:

  • the Admission Document prepared by the Company in connection with Admission (the “Admission Document”) was published on 12 February 2014, and is available on the Company’s website www.actual-experience.com
  • The total number of Ordinary Shares in issue at Admission will be 28,619,450 giving the Company a market capitalisation of approximately £15.6m based on an introduction price of 54.5 pence
  • N+1 Singer is acting as Nominated Adviser and Broker to Actual Experience

Overview of the Company:

Actual Experience has developed an innovative business tool to enable corporations to manage their digital supply chain and thereby improve the experience of their employees, customers, and partners with regard to important digital products and services.

Founded in 2009, Actual Experience has already acquired an impressive list of blue-chip customers including Accenture (UK) Limited, Cisco Systems Inc., Deutsche Post AG, and Verizon Business, Inc.

In November 2013, the Company secured equity funding of £4.07 million from a group of investors led by funds managed by Henderson Global Investors Limited. The purpose of the funding was to provide further working capital to the Company, and, in particular, to facilitate expansion of its development and sales functions to drive further growth. IP Group is a circa 30 per cent. shareholder in the Company, having first invested in the Company in 2010.

The Company has 16 employees all based in Bath, UK. Actual Experience has a strong management team and a board of directors with significant experience of operating in the European and US technology industry and also of managing high growth companies.

It is hoped that the Introduction will raise the profile of the Company, better position the Company to attract, recruit and retain key employees, provide the Company with greater flexibility for future growth and increase access to capital should further finance be required to expand the business.

Dave Page, CEO and Co-Founder of Actual Experience, commented,

We take it for granted that other supply chains, such as automotive or logistics are managed – but digital supply chains are in comparison flung together with little or no management. Our technology changes that. Having grown an impressive client list we are now at the stage of taking our technology out to the broader market and the fundraise in November 2013 provided us with the fire power to do so.

“We believe that we have the opportunity to build a world-leading UK technology business, grown out of UK academia and supported by UK business investment. A public listing is the next step in our long-term evolution and will enable us to showcase our ground-breaking technology to a much wider audience.”

Terms defined in this announcement have the meanings given to them in the Admission Document.

For further information, please contact:

Actual Experience plc via Newgate Threadneedle

Dave Page, CEO

Steve Bennetts, CFO

N+1 Singer Tel: 020 7496 3000

Shaun Dobson, Nick Donovan, William Goode

Newgate Threadneedle Tel: 020 7653 9850

Caroline Evans-Jones/ Josh Royston/ Heather Armstrong

Additional Information

Overview of the technology

Actual Experience has developed an innovative business information tool to enable corporations to analyse their digital supply chain and thereby improve the experience of their employees, customers, and partners with regard to important digital products and services.

Business IT departments, cloud services providers and broadband internet service providers commonly have problems fielding calls or emails from dissatisfied employees or customers despite their management tools indicating that their services are working satisfactorily. For example, a video conferencing system may be “freezing” or an important airline ticketing system may be processing data very slowly but service managers may be unable with current tools to diagnose, and therefore rectify, the causes of this sub-optimal performance.

Actual Experience’s technology analyses digital products and services as users experience them. This enables businesses to set KPIs and adjust and adapt their digital supply-chains to meet those KPIs. Actual Experience calls this ‘Digital Supply-Chain Analytics’ and it allows customers to:

  1. enable continuous service improvement to meet KPIs;
  2. de-risk technology and process transformations; and
  3. facilitate digital supply-chain cost reduction, while maintaining KPIs.

In economic terms, when the complex and expensive digital supply-chains that employees and customers rely on underperform, in some instances businesses can lose up to 9 per cent. of revenues. At a macro level, this problem is a considerable constraint on the $8 trillion global digital economy.

In 2012, Actual Experience won the Institute of Engineering and Technology Innovation Award. The potential of the Company’s technology was recognised by winning the Frost & Sullivan Global Customer Value Leadership Award 2013 and, more recently in November 2013, the Company was awarded the British Computer Society UK Innovation and Entrepreneurship Award.

Key strengths

Actual Experience has the following key strengths:

Differentiated product

While there are many digital performance management tools in existence, the Company is not aware of a comparable solution that offers customers a similar ability to optimise the human experience of digital products and services.

Market opportunity

The product is sector agnostic and scalable and thus the Company has the potential to secure customers in every major industry sector. The Directors believe that any organisation that conducts a significant portion of its operations online is a potential customer, resulting in a large and growing addressable market. The Company currently has customers in finance, media, ISP, logistics, retail, public sector, integrators and outsourcers, and publishing, amongst others.

Blue chip customers

The Company’s solution has been deployed in several large, multinational organisations including Accenture (UK) Limited, Cisco Systems Inc., Deutsche Post AG, and Verizon Business Inc.

Experienced Board and strong management team

The Board has significant expertise and experience of operating in the European and US technology industry and also of managing high growth companies.

History

In 1998, Professor Jonathan Pitts began a research project at what was then the Department of Electronic Engineering (now the School of Electronic Engineering and Computer Science) at QMUL. This project was the first in a sequence of EPSRC–funded projects investigating the complex behaviours of traffic in packet-based network infrastructure, and developing a range of techniques for modelling the end-to-end performance arising from uncertain user demands being placed on shared infrastructure. This led to novel methodological advances, developing holistic quality of experience measures that provide what the Company believes is a new method for evaluating the impact of component behaviours on perceived human experience.

Actual Experience was co-founded by Professor Jonathan Pitts and Dave Page to further develop and commercialise those analytical techniques. The Company was incorporated in March 2009 as a spin-out from Queen Mary, and secured initial funding of £0.81 million in February 2010 from a consortium of early stage investors led by IP2IPO. This funding enabled the Company to develop an initial version of the ‘Digital Supply-Chain Analytics’ service from its office in Bath.

In November 2011, Actual Experience secured additional funding of £0.60 million with the majority of the subscription again coming from IP2IPO. With initial sales commencing in 2010, this funding provided the necessary working capital to enable the Company to recruit additional development employees and to establish a greater customer facing presence. Employee numbers increased steadily from eight in November 2011 to the current level of 16, all based at the Company’s Bath office.

Further equity funding of £4.07 million was received in November 2013 from a group of investors led by funds managed by Henderson. Concurrent with this funding, convertible loan notes totaling £0.51 million, including accrued interest, which had been issued between April and July 2013, were converted into equity. The purpose of this funding was to provide further working capital to the Company and, in particular, to facilitate expansion of its development and sales functions to drive further growth.

Routes to market

Initial sales orders have been achieved through a combination of direct selling and joint sales and marketing activity with specialist consultancy firms. While Actual Experience will continue to invest in these activities, it is expected that an increasing portion of new orders will be achieved by fostering partnerships with global service providers so as to create scale in the business and facilitate greater penetration of the service. Such partners offer scalability due to their managed services business models and global customer base.

The first sales were made to three global service providers under this model in 2013. The Board believes that working with such partners will yield significant revenue growth in the future.

Partnerships

Actual Experience has developed relationships with a number of reseller partners. Since product launch in 2012, the proportion of sales made through these partners has increased to 45 per cent. of total revenues. Currently such reseller partners are small, UK-based technology and business consultancies.

Competitive advantage

The Directors believe that there are a number of specific points of differentiation between the Company’s product and other performance management tools, including the following:

  • most performance management tools evaluate performance from a system perspective. Actual Experience’s product evaluates performance from the human perspective;
  • existing performance management products typically focus on one part of the digital supply-chain, e.g. the network, data centre or application. Actual Experience’s product analyses the entire digital supply-chain; and
  • some existing performance management products also measure so-called ‘end-user’ experience, but it is a technical measurement of end-to-end system performance, not the human experience – or MOS – that Actual Experience provides, which the Company believes has significantly more economic relevance to customers, employees and businesses.

Board of Directors

Dave Page, aged 46, Chief Executive Officer and Co-Founder

Dave has diverse commercial and technical IT experience. For the last 18 years, he has advised on multinational corporate business systems, with roles in enterprise, outsourcing, software and hardware companies. Dave was the founding member of the management team at Nexagent, a venture funded software business acquired by EDS in 2008. Nexagent established systems that enabled consistent application performance across fragmented international corporate intranets. In 1998, Dave established and led the Consulting team for the $1 billion European Service Provider line of business at Cisco. Before this, Dave worked at IBM Global Services, BT Global Services and NatWest on numerous aspects of corporate IT infrastructure.

Steve Bennetts, aged 59, Chief Financial Officer

Steve joined Actual Experience in October 2013. He qualified as a Chartered Accountant with Ernst & Young and subsequently has spent most of his career in the technology sector. Initially Steve worked as EMEA Finance Director at several Nasdaq quoted companies, such as Avid Technologies and Pyramid Technologies, where he gained valuable international experience as well as leading accounting, HR, legal, and administrative functions. This period included leadership of the team put in place to establish Amazon’s European operations, including managing the early hyper-growth in the UK and Germany. Subsequently Steve has worked at VC funded UK based technology companies, such as Nexagent Limited and Tribold Limited. A highlight of this period included the trade sale of Content Technologies for approximately $1 billion.

Dr. Mark Reilly, aged 34, Non-Executive Director

Mark Reilly runs the Physical Sciences portfolio of companies for IP Group plc, one of the UK’s leading university intellectual property commercialisation specialists and an investor in Actual Experience. He has led investments in, and played a key role in the growth of, numerous high-tech companies, including successful IP Group exits such as mobile software company Overlay Media (sold to inMobi in 2012) and wind turbine power electronics pioneer Amantys. Prior to joining IP Group, Mark was the founder and Managing Director of Remarkable Innovation, a Singapore-based technical due diligence company. He spent his early career in the ICT sector, working with a range of organisations from blue chip multinationals and NGOs to early stage start-ups. Mark holds a PhD in Engineering from Cambridge University.

Nigel Mitchell, aged 52, Non-Executive Director

In 1982 Nigel was a co-founder of Chase de Vere Investments plc, holding a number of strategic and operational roles over 20 years. He became CEO in 1999 and following the acquisition of Chase de Vere by the Bank of Ireland Group in 2000, remained as CEO establishing and delivering an ambitious growth strategy. Since 2003 Nigel has worked on various start-up ventures with a technology and environmental bias. He is a founder shareholder and non-executive Director of the clean energy company 2OC Limited. He has been a non-executive director of Actual Experience since July 2009.

Stephen Davidson 58, Non-Executive Director

Stephen is currently non-executive chairman of JSE and AIM-listed Datatec Limited and non-executive director of Inmarsat plc, Restore plc and Jaywing plc. He has recently been chief executive of Mecom Group plc, where he was previously non-executive chairman. In his earlier career, Stephen was CFO, then CEO, of Telewest Communications plc and vice chairman of investment banking at WestLB Panmure. He joined the Board in February 2014.

Current Trading and Prospects

The Company’s current ‘Digital Supply-Chain Analytics’ product was launched at the beginning of 2012 with four fee-paying customers. Utilising the Company’s ‘Analytics-as-a-Service’ business model, the initial focus was to prove that these early adopters would derive demonstrable benefits and that they would renew and expand their business with the Company, placing Actual Experience at the heart of their digital supply-chain analytics strategy. The success of this initial proof of concept work during 2012 encouraged management to expand the Company’s sales campaigns, and the customer base subsequently grew to approximately 40 customers by December 2013.

Revenues have grown from approximately £120,000 in the year ended 31 July 2012 to over £440,000 in the 14 month period ended 30 September 2013. Most of the Company’s revenue relates to UK sales relationships, but during 2013 initial orders were secured from German and American customers.

As 2013 progressed, Actual Experience secured business from large, blue-chip organisations and has also started to generate revenue with larger, more internationally focused partners. Working with large organisations generally results in longer sales cycles, and slower deployment and adoption than smaller customers, but with prospects for far greater revenues from the analytic services provided.