Actual Experience : Interim Results to 31 March 2022

24 May 2022

Actual Experience plc

(the "Company" or "Actual Experience" or "Actual")

UNAUDITED CONSOLIDATED INTERIM RESULTS

for the six months ended 31 March 2022

Components in place for transition from start-up to scaleup

Actual Experience plc (AIM: ACT), the Digital Workplace Management System (Analytics-as-a-Service) company, announces its unaudited consolidated interim results for the six months ended 31 March 2022.

Financial Highlights

• Revenue of £0.82m (H1 FY21: £0.89m)
• Gross profit of £0.35m (H1 FY21: £0.45m)
• Operating loss of £2.84m (H1 FY21: £2.19m)
• Loss per share of 4.97p (H1 FY21: loss per share of 4.29p)
• Cash and cash equivalents at 31 March 2022 of £5.37m (30 September 2021: £8.22m)

Operational Highlights

• Direct sales team has increased focus on direct customer engagement
• Appointments of Chief Product Officer and Chief Revenue Officer have strengthened executive team
• New Digital Workplace Management System (DWMS) portal, soft launched following consultations with existing customers
• New go-to-market strategy developed to speed up the conversion of pipeline to customers

Current trading and outlook

• Components in place for transition from a start-up to a scaleup
• Sales activity focus on selling the enhanced product offering
• Pipeline of new business prospects building steadily, with focus on converting these opportunities into recurring revenue streams
• Lower cost base expected in the second half of the year

Dave Page, CEO of Actual Experience plc, said: "Actual Experience now has the components in place for transitioning from being a start-upto a scaleup business. With the new DWMS portal, which harnesses our unique Human Experience (HX) insights, we have a better defined product that has been well received by actual and prospective customers. With this improved product development, we are working to scaleup the business by focusing on direct sales and marketing efforts to convert our pipeline of global blue-chipopportunities into revenue generating long term customers.

Whilst the current macro environment has accelerated the need for our product offering, as enterprises embrace new and hybrid ways of working, we have also been impacted by the lengthening of procurement processes at these large businesses. We remain confident that the second half of the year will see improved momentum as our product and sales investments bear fruit."

Kirsten English, Chair of Actual Experience plc, said: "Our primary focus is to generate more sales. To this end we have recently invested in a direct sales force, invested in marketing, hired a Chief Product Officer and a Chief Revenue Officer to bring onboard further business." Our new portal provides clear 'quant driven' answers to the questions that the 'C' suite and Board in corporations are asking about the hybrid workplace; how much time is our company wasting due to the inefficiency of digital tools and how do we fix this? How does digital inefficiency impact the wellbeing of our people? Where are our people working from and what does this mean in terms of our real estate outlook? Actual Experience's analytics service pinpoints precisely where companies can invest to make the greatest

positive impact on employee efficiency and wellbeing and critically we can also measure the resultant return on that investment."

Enquiries:
Actual Experience plc	Tel: [phone]
Dave Page, Chief Executive Officer
Steve Bennetts, Chief Financial Officer
Singer Capital Markets Advisory LLP	Tel: [phone]
Shaun Dobson
Will Goode
MHP Communications [e-mail]	Tel: [phone]
Reg Hoare
James Bavister
Will Mullan

About Actual Experience

Actual Experience's goal is to make the digital world work for everyone, everywhere, all of the time. As the working world evolves post-pandemic, the global shift to a flexible hybrid model has brought with it a significant challenge; how do businesses create an environment that gives their people what they need to thrive, whilst protecting the commercial efficiency of the business and driving growth at the same time?

By underpinning their strategic decision making with our data-driven insights, our customers gain the clarity and confidence needed to build sustainable digital ecosystems within their organisations - delivering both a great employee experience and increasing the efficiency of the digital workplace. Powered by over 10 years of academic Human Experience research, our Digital Workplace Management System doesn't need any interaction with employees to provide a unique and highly actionable dataset that People, Technology and Finance leaders can rely upon to plan impactful projects against their most critical agenda items including wellbeing, profitability, DE&I and ESG initiatives.

Actual Experience is listed on the London Stock Exchange (AIM: ACT). Our corporate headquarters are in Bath, UK. Actual Experience's unique and patented digital analytics-as-a-service is founded on cutting-edge research from Queen Mary University of London.

For further information please visit www.actual-experience.com

BUSINESS REVIEW

The start of the financial year for Actual Experience saw two new contract wins which were announced in November 2021. Both contracts were for Business Impact Assessments (BIA) and provided clear validation of the quality and relevance of the Company's technology offering. The first of these new contract wins was with a Channel Partner to use across its own organisation, assisting in its new hybrid working policy, as well as providing a powerful reference as it sells to its own customers. The second contract was with a leading global food and beverages business. These two contract wins were the third and fourth awarded to the business since its pivot to the professional services model.

Having been awarded these two new BIA wins, the Company is now working to convert them to Continuous Improvement (CI) contracts, as part of our 'land and expand' strategy, as we have been doing with all our new customers. Since November of last year, significant progress has been made in converting these customers to CI contracts. However, the sales team has been finding that in the current climate of macroeconomic and geopolitical uncertainty, the procurement processes for the larger multinational enterprises we are selling into has been lengthened.

Despite the increasing length of time it is taking to convert these contracts into orders, the board is encouraged by the potential within the pipeline.

As part of our preparedness for transition from start-up to scaleup, we have recently significantly bolstered our executive team with two experienced hires to help drive growth.

Firstly, we recruited Scarlet Jeffers as Chief Product Officer to lead the development of our new product offering and to be responsible for driving a deep understanding of the needs of our customers and the wider market into our development roadmap. Scarlet's work has directly led to the development of a new portal, greatly improving the user experience for our customers and delivering a better overall product-market fit. With the newly defined product scheduled for launch in the coming months, we will be able to fully implement our new go-to-market strategy.

Secondly, we appointed Roy Jugessur as Chief Revenue Officer. This role will strengthen our customer engagement, sales, and marketing functions as we build out our pipeline of new business opportunities.

As previously announced, a long-standing contract via a Channel Partner (based on our legacy offering) has not been renewed due to a change in customer strategy. This contract delivered revenues of £1.2m in FY2021 and £0.4m in the current fiscal year.

Board Changes

As previewed in our announcement in September 2021, Kirsten English was appointed as Chair, with effect from the date of the AGM in March this year. Kirsten has extensive experience relevant to our business, particularly in this growth phase as we transition from start-up to scaleup. In the first months of her tenure, Kirsten has been actively engaging with the Company's largest shareholders, to ensure an open and collaborative dialogue.

Market

As business emerges from the Covid-19 pandemic, we are seeing a growing number of examples, especially in larger global blue-chip companies, where management is embracing the concept of new ways of working, in recognition and that a hybrid working environment can be more cost efficient for their businesses, as well as increasing productivity and well-being for their staff. This move to a new way of working directly benefits Actual Experience, as a customer might effectively go from having 100 offices to 100,000 home offices, with a commensurate reduction in the visibility and control of the workplace.

Our DWMS and our unique Human Experience analysis gives our customers greatly improved insight into the impact that the digital workplace is having on employee and business efficiency. This service is crucial for many businesses grappling with a drastic change from the traditional five-day office week. Not only does our technology allow customers to be more focussed in terms of targeting capital

expenditure and reducing operational costs to maximise efficiency and productivity, our product also facilitates a greater level of employee engagement, playing a part in ensuring that separation and physical distance between employees does not lead to a fractured working environment. By coupling business impact insights with highly actionable technology data, we can support our customers in creating a sustainable future of work in their business.

Strategy

Having previously completed our pivot to our new Analytics-as-a-Service offering, we are now ready to scaleup our business by focussing on direct engagement with our prospective and existing customers to ensure we are delivering the best value to customers that we can with our technology.

We continue to develop our direct sales capability, with our new Chief Revenue Officer, Roy Jugessur in place to strengthen our sales function, and with further product enhancements;

• Greater automation of our reporting to reduce the resource required to deliver to individual customers each time, this will enable us to scale effectively and quickly as the pipeline closes.
• Scalability of our service clouds so that we can cost-effectively handle the demands of the world's largest enterprises as we enter an aggressive growth phase.

Product development

Chief Product Officer Scarlet Jeffers has been leading the development of our new DWMS offering and is responsible for driving into our work a deep understanding of the needs of our customers and the wider market into our work. In developing the new portal, Scarlet and her team have been engaging directly with our prospective and existing customers to understand more clearly their wants and needs. We are:

• Soft-launchingan engaging, intuitive customer portal to show the business value of our insights with greater impact. This will allow us to optimise margins and also pave the way for building resonance in the market as we become recognisable in our niche
• Increasing the capability of our measurement software to capture non-invasive diagnostics about home worker internet setups and provide the level of granularity that large enterprise organisations need in order to make hybrid working truly sustainable
• Using a refreshed Human Experience Score to give a more intuitive understanding in the market and to be reflective of the experience of home workers by accounting for variability in the digital workplace
• Putting heavy focus on doing more with our data, finding ways to provide deeper insights and working to understand how we can interface with other sources of information for our customers in the future

Sales & Marketing

In the period, Actual Experience took several positive steps to improve its sales function, with further investment in the direct sales team. Our direct sales team has focussed on increasing the level of direct customer engagement, which promises to assist in converting pipeline prospects into paying customers.

We have focussed our marketing activity on various means of testing and evaluation of messaging and positioning to people leaders (CHROs) and finance leaders (CFOs). This has included participation in conferences, round tables, podcast style interviews, blogs and other forums, particularly in the HR space, that has helped to improve the positioning and value of our product.

Outlook

Actual Experience is now well prepared to scaleup its operations. Market conditions remain encouraging for our business, as our technology offering directly supports the needs of many large blue-chip companies that are increasingly looking to embrace new hybrid ways of working. It is becoming ever clearer that 'new ways of working' are here to stay and are no longer directly a temporary response to the impact of Covid-19.

With the newly refined portal and increased customer engagement, the Company is now at a stage where further development of the product is not the key priority. Instead, we are transitioning to a scaleup business by focussing on our direct sales and marketing functions to ensure we maximise the breadth and depth of businesses that can feed into our active pipeline of prospects.

The increasing length of procurement processes at large, global blue-chip companies has proven a challenge. However, the Board expects that the second half of 2022 will see increased momentum as the benefits of our improved product offering and sales functions lead to new 'wins'.

FINANCIAL REVIEW

Consolidated Income Statement

Total revenue for the six months to 31 March 2022 was £824,706, a decrease on the prior year of 7.3% (H1 FY21: £889,467). This decrease reflects the previously announced cancellation of a longstanding contract that relied on our legacy product offering, partly offset by new DWMS revenues. The Company maintained its focus on developing a direct sales capability during the period, while continuing to work with its partners on indirect sales opportunities. Revenues from Channel Partners in the period account for 96.4% of sales (H1 FY21: 97.9%).

A gross profit of £354,386 was achieved in the period, compared to the gross profit of £446,902 in the corresponding period in 2021. The gross margin for the six months was 43.0%, representing a decrease from the prior period (H1 FY20: 50.2%). This decrease in gross margin reflects the impact of fixed costs on a lower revenue period and investment made in cloud infrastructure to support new DWMS revenue opportunities.

Administrative costs amounted to £3,194,804, compared to £2,632,341 in the six months to 31 March 2021. This increase primarily arose from the investment in sales and marketing activities in the period