REG - Access Intelligence - Interim Results
04/07/2023 07:00
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RNS Number : 8296E Access Intelligence PLC 04 July 2023
ACCESS INTELLIGENCE PLC
("Access Intelligence", the "Company" or the "Group")
INTERIM RESULTS
Access Intelligence Plc, (AIM: ACC) the technology innovator delivering
Software-as-a-Service ("SaaS") solutions for the global marketing and
communications industries, is pleased to announce its unaudited half year
results for the six months ended 31 May 2023.
Highlights:
As outlined in its trading update of 22 June 2023, the Group has continued to
make progress against its strategic objectives, most importantly delivering
its first six-month period of Annual Recurring Revenue ("ARR") growth in the
APAC region since the acquisition of Isentia, alongside continued ARR growth
in the EMEA & NA market:
· The Group's ARR increased by £1.4 million(1) in the period,
demonstrating a significant increase in momentum in ARR growth across the
Group when compared to ARR growth of £0.5 million(1) in H1 2022. Each
individual region contributed to the ARR growth during the first half.
ARR FY22 H1 23 Change in ARR
EMEA & North America (Constant Currency) £29.4m £30.5m +£1.1m
EMEA & North America (Reported) £29.4m £30.5m +£1.1m
APAC (Constant Currency) £29.0m £29.3m +£0.3m
APAC (Reported) £30.6m £29.3m -£1.3m
Group (Constant Currency) £58.4m £59.8m +£1.4m
Group (Reported) £60.0m £59.8m -£0.2m
· Total revenue for the period was £31.3 million (H1 2022: £32.7
million) with 95% of revenue being recurring (H1 2022: 93%).
· The Group delivered Adjusted EBITDA(2) in the period of £2.0
million (H1 2022: £0.3 million), a year-on-year increase of £1.7 million.
· As a result of the actions taken over the last two years to
optimise the business for profitable growth and free cash flow generation, the
Board anticipates the delivery of higher adjusted EBITDA and cash generation
in the second half in line with full year expectations.
Christopher Satterthwaite, non-executive Chairman, commented:
"As outlined in June, Access Intelligence has delivered a significant increase
in ARR growth(1) during the first half of the year. This growth has been
observed in all global regions serviced, and for the first time since the
acquisition of Isentia, there has been ARR growth in the APAC region.
The full release of the Group's next generation platform into the APAC market
during the next few months provides a considerable opportunity for accelerated
growth. Both existing and potential customers in the region will be able to
benefit from Access Intelligence's market-leading technology, positioning the
Group well for further expansion. In the EMEA and North America region, growth
has been sustained with a focus on providing a wider range of the Group's
products to both new and existing customers at higher average order values.
The Board continues to focus on improving profitability and cash generation.
Several cost optimisation initiatives have already been implemented and there
will be continued emphasis on delivering a lean operating model as the Group
continues to grow.
Overall, the Board is pleased with the progress being made and remains
confident in the outlook for the Group in the second half of the year and
beyond."
( )
1. On a constant currency basis
2. Adjusted EBITDA is earnings before interest, tax, depreciation and
amortisation and adjusted for share based payments, share of losses of an
associate and non-recurring expenses primarily relating to acquisition,
integration and restructuring costs in respect of Isentia.
For further information:
Access Intelligence
plc
020 3426 4024
Joanna Arnold (CEO) / Mark Fautley
(CFO)
finnCap Limited (Nominated Adviser and Broker)
020 7220 0500
Corporate Finance:
Marc Milmo / Fergus
Sullivan
Corporate Broking:
Alice Lane / Sunila de Silva
Chairman's statement
I am pleased to announce our unaudited interim results for the six months
ended 31 May 2023.
In an increasingly noisy world, being relevant and distinctive has gone beyond
a nice to have, it's become a survival strategy. For marketers and
communicators, the only way to stay relevant is by knowing their audience.
But what we used to call audiences has fundamentally changed: the internet and
the end of mass media and linear media consumption has fragmented audiences,
going from mass fan bases to a multiplicity of niches, and from cultural
moments to cultural movements. This poses a significant challenge for marcomms
professionals.
Access Intelligence harnesses the digitalisation of audiences to make audience
intelligence more accessible to organisations of all kinds and all sizes. By
powering the world's leading audience intelligence platform that harnesses
rich data sets, artificial intelligence and human minds, the Group's customers
can tap into the most nuanced and actionable insights on their customers,
markets, and society.
Continued growth in EMEA & North America
The Group's business in the EMEA and North America markets has demonstrated
sustained growth, delivering an increase in ARR of £1.1 million in the period
and with total regional ARR reaching £30.5 million at 31 May 2023. The
business continues to build a good pipeline in the region, including a number
of significant strategic opportunities. Whilst these more strategic
opportunities have a longer sales cycle than the majority of the Group's
pipeline, they represent some of the most interesting use cases for Access
Intelligence's technology and insights offerings. They also reflect the
longer-term market opportunity for Access Intelligence to increase average
order values by signing up a greater proportion of new business sales from
larger, more technical contracts using a wider range of the Group's product
offering.
New client wins in EMEA and North America include: Basis Technologies, the
British Fashion Council, Carnival, the Delegation of the European Union to the
United Kingdom, Dentsu, the English Football League, Havas, HM Land Registry,
The Insolvency Service, Iris Worldwide, Matalan, Mayborn Group, McCann, The
National Lottery Heritage Fund, The National Trust, the Office of the
Children's Commissioner, Ofgem, Penguin Random House, Punch Taverns, Sayara
International, Student Loans Company, and Tate & Lyle.
First ARR growth delivered in APAC
In APAC there has been positive momentum with the region delivering ARR growth
of £0.3 million(1) in the period, with total regional ARR of £29.3m at 31
May 2023. By comparison, ARR had declined by £0.7 million(1) in the first
half of FY2022.
The first six months of the current financial year are the first period of ARR
growth delivered in APAC since the acquisition of Isentia in September 2021
and reflect the stabilisation of the business in the region as it has been
integrated into the wider Group. There has been strong engagement with
customers and there remains a considerable opportunity to continue to combine
Isentia's established media monitoring and insights services in the region
alongside Access Intelligence's audience intelligence offering. This return to
growth in the region has been delivered ahead of the release of the Group's
fully integrated next generation platform into the market in the next few
months.
The Group has won a number of new clients (including client win backs) in the
region during the first half, including: CBRE, the Department of Employment
& Workplace Relations, the Department of Fire and Emergency Services, the
Department of Health and Aged Care, FIFA, Mecca Brands, Merlin Entertainments,
Mercedes, New Zealand Rugby, Senate of the Philippines, Tesla, Uluru Dialogues
and University of Canberra.
Optimisation of the Group's operations
A key focus throughout 2023 and beyond is to ensure that the Group has a
stable, profitable and cash generative core business as the platform from
which to grow in all serviced global regions. Management continuously seeks to
optimise the Group's operational structure, supported by the delivery of
substantial synergies as part of the integration of Isentia into the Group
alongside other cost reduction initiatives. Recurring administrative
expenditure has reduced by approximately 11% year on year from £24.1 million
in H1 2022 to £21.4 million in H1 2023, with non-recurring costs incurred
during the first half to achieve this reduction.
In addition to focussing on improved profitability, the Group's invoicing
profile is changing in certain regions leading to an enhancement in its
working capital management. Contract liabilities have increased by £2.8
million year on year as a greater proportion of customer contracts are
invoiced annually in advance with the associated benefit to cash flow. This is
expected to continue in the second half alongside further growth in
profitability.
Results for the half year
The primary key performance indicator monitored by the Board is the growth in
ARR year-on-year. This reflects the annual value of new business won, together
with upsell into the Company's existing customer base as it delivers against
its land and expand strategy, less churn. It is an important metric for the
Group as it is a leading indicator of future revenue.
During the period, the Group's ARR grew by £1.4 million(1) (H1 2022: £0.5
million(1)). ARR at 31 May 2023 was £59.8 million, comprising £30.5 million
in EMEA and North America and £29.3 million in APAC.
Revenue for the period was £31.3 million (H1 2022: £32.7 million), with
recurring revenue comprising 95% of total revenue for the period (H1 2022:
93%).
EMEA & North America revenue increased by £1.0 million year on year to
£13.6 million (H1 2022: £12.6 million) as a result of ongoing ARR growth in
the region. Recurring revenue comprised 98% of total EMEA & North America
revenue in the period (H1 2022: 95%).
APAC revenue declined by £2.4m year on year to £17.7 million (H1 2022:
£20.1 million) due to the combined effect of the reduction in ARR in FY22
being reflected in revenue in the period and a reduction in non-recurring
campaign revenue. Recurring revenue comprised 92% of total APAC revenue in the
period (H1 2022: 90%) with non-recurring revenue being lower in FY23 due to
customers running fewer one-off campaigns given wider macro-economic
conditions.
The Group delivered a gross margin of 75% in the period (H1 2022: 75%) despite
the lower year on year revenue due to synergies achieved on infrastructure and
data feeds, alongside reduced variable costs of sale.
Adjusted earnings before interest, tax, depreciation and amortisation
("EBITDA") were £2.0 million (H1 2022: £0.3 million). Adjusted EBITDA
excludes certain non-recurring expenses totalling £3.8 million for the period
(H1 2022: £1.4 million), in addition to the Group's share of loss of an
associate of £0.1 million (H1 2022: £0.1 million) and a share-based payments
charge of £0.5 million (H1 2022: £0.6 million).
Non-recurring items in the period included restructuring and migration costs
in respect of the Isentia acquisition of £3.6 million (H1 2022: £0.9
million) and legal costs in respect of Australian copyright of £0.2 million
(H1 2022: £0.4 million). Reported EBITDA loss was £2.5 million (H1 2022:
loss of £1.7 million).
The Group has continued to increase investment in its software platforms with
identifiable new product development activity being capitalised. The Group
capitalised development costs of £4.2 million for the period (H1 2022: £3.5
million), with a further £1.1 million (H1 2022: £1.4 million) of product,
research and development costs being expensed through profit and loss.
The Group's operating loss was £6.0 million (H1 2022: loss £7.4 million).
The Group incurred £3.5 million of depreciation and amortisation charges (H1
2022: £5.7 million).
The basic loss per share was 6.29p (H1 2022: loss 1.50p).
The Group held cash at the end of the period of £2.7 million (H1 2022: £9.3
million). It does not currently have a loan facility in place but will
continue to evaluate options for this during the second half.
Outlook
During the first half of 2023, Access Intelligence has focused its activities
in two key areas: continued advancement of its market leading products
including the release of the Group's next generation platform into the APAC
region; and refinement of the Group's operating model to improve EBITDA
margins and free cash flow conversion.
The ongoing investment in products and operations will provide customers
across all regions with a fully integrated offering that goes beyond media
monitoring and social listening to deliver deep audience intelligence.
This enhanced offering supports the continued scaling of the business through
improved sales and renewals and is expected to result in increased average
order values as a greater number of customers take a wider suite of the
Group's products and services. This trend has been clear over recent years
with Access Intelligence's largest customer in 2018 generating revenue of
£60k, whereas the Group now has over 150 customers with annual contract
values exceeding £50k and a significant number with annual contract values
exceeding £100k.
The ARR growth delivered by the Group during the first half is expected to
contribute to higher revenue in the second half, whilst the Group's pipeline
also continues to grow with a number of strategic opportunities expected to
close during Q3.
Access Intelligence's ongoing efforts to optimise its operating model have
already resulted in a significant reduction in year on year recurring
administrative expenses and costs of sale. These efforts will continue as the
Group's technology is made available to all customers globally in a fully
integrated platform.
Overall, the Board is pleased with the progress being made and remains
confident in the outlook for the Group in the second half of the year and
beyond.
Christopher Satterthwaite
Non-executive Chairman
Access Intelligence Plc
Consolidated Statement of Comprehensive Income
for the six months ended 31 May 2023
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31-May-23 31-May-22 30-Nov-22
£'000 £'000 £'000
Revenue 31,277 32,731 65,710
Cost of sales (7,927) (8,280) (15,915)
Gross profit 23,350 24,451 49,795
Recurring administrative expenses (21,364) (24,131) (47,468)
Adjusted EBITDA 1,986 320 2,327
Non-recurring administrative expenses (3,849) (1,369) (1,215)
Share of loss of associate (116) (125) (254)
Share-based payments (498) (564) (1,121)
EBITDA (2,477) (1,738) (263)
Depreciation of tangible fixed assets (270) (324) (747)
Depreciation of right-of-use assets (944) (1,168) (2,140)
Amortisation of intangible assets - internally generated (1,118) (932) (1,745)
Amortisation of intangible assets - acquisition related (1,179) (3,263) (2,312)
Operating loss (5,988) (7,425) (7,207)
Financial income 7 5 14
Financial expense (137) (151) (295)
Loss before tax (6,118) (7,571) (7,488)
Taxation credit 1,052 572 3,295
Loss for the period (5,066) (6,999) (4,193)
Other comprehensive income
Items that will or may be reclassified to profit or loss (2,967) 5,085 2,427
Total comprehensive loss for the period attributable to the owners of parent
company
(8,033) (1,914) (1,766)
Earnings per share:
Basic loss per share (6.29)p (1.50)p (1.38)p
Diluted loss per share (6.29)p (1.50)p (1.38)p
Access Intelligence Plc
Consolidated Statement of Financial Position
at 31 May 2023
Unaudited Unaudited Audited
As at As at As at
31-May-23 31-May-22 30-Nov-22
£'000 £'000 £'000
Non-current assets
Intangible assets 68,142 67,358 69,269
Investment in associate 346 591 462
Right-of-use assets 2,450 2,661 1,896
Property, plant and equipment 688 975 861
Deferred tax assets 5,037 4,325 4,345
Total non-current assets 76,663 75,910 76,833
Current assets
Trade and other receivables 13,787 14,772 13,695
Current tax receivables 240 783 1,025
Cash and cash equivalents 2,670 9,291 4,922
Total current assets 16,697 24,846 19,642
TOTAL ASSETS 93,360 100,756 96,475
Current liabilities
Trade and other payables 10,285 7,649 8,945
Accruals 4,773 7,604 4,946
Contract liabilities 16,669 13,824 13,818
Provisions - 632 -
Lease liabilities 1,602 1,831 1,610
Total current liabilities 33,329 31,540 29,319
Non-current liabilities
Provisions 455 382 471
Lease liabilities 1,336 1,644 907
Deferred tax liabilities 5,401 7,578 5,404
Total non-current liabilities 7,192 9,604 6,782
TOTAL LIABILITIES 40,521 41,144 36,101
NET ASSETS 52,839 59,612 60,374
Equity
Share capital 6,526 6,528 6,526
Treasury shares (141) (148) (141)
Share premium account 74,424 74,372 74,424
Capital redemption reserve 395 395 395
Share option reserve 2,520 1,465 2,022
Foreign exchange reserve (231) 5,394 2,736
Other reserve 502 502 502
Retained earnings (31,156) (28,896) (26,090)
TOTAL EQUITY ATTRIBUTABLE TO EQUITY SHAREHOLDERS
52,839 59,612 60,374
Access Intelligence Plc
Consolidated Statement of Changes in Equity
for the six months ended 31 May 2023
Share Treasury Share Capital Share Foreign Other Retained Total
capital shares premium redemption option exchange reserve earnings
account reserve reserve reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 December 2021 6,528 (148) 74,419 395 901 309 502 (21,897) 61,009
Loss for the period - - - - - - - (6,999) (6,999)
Other comprehensive loss for the period - - - - - 5,085 - - 5,085
Expenses related to issue of share capital - - (47) - - - - - (47)
Share-based payments - - - - 564 - - - 564
At 31 May 2022 6,528 (148) 74,372 395 1,465 5,394 502 (28,896) 59,612
Profit for the period - - - - - - - 2,806 2,806
Other comprehensive loss for the period - - - - - (2,658) - - (2,658)
Issue of share capital (2) 7 52 - - - - - 57
Share-based payments - - - - 557 - - - 557
At 30 November 2022 6,526 (141) 74,424 395 2,022 2,736 502 (26,090) 60,374
Loss for the period - - - - - - - (5,066) (5,066)
Other comprehensive loss for the period - - - - - (2,967) - - (2,967)
Share-based payments - - - - 498 - - - 498
At 31 May 2023 6,526 (141) 74,424 395 2,520 (231) 502 (31,156) 52,839
Access Intelligence Plc
Consolidated Statement of Cash Flow
for the six months ended 31 May 2023
Unaudited Unaudited Audited
6 months ended 6 months ended Year
ended
31-May-23 31-May-22 30-Nov-22
£'000 £'000 £'000
Loss for the year attributable to shareholders (5,066) (6,999) (4,193)
Adjustments for:
Taxation (1,052) (572) (3,295)
Financial expense 137 151 295
Financial income (7) (5) (14)
Depreciation and amortisation 3,510 5,687 6,943
Share based payments 498 564 1,121
Share of loss of associate 116 125 254
Operating cash (outflow)/inflow before working capital changes (1,864) (1,049) 1,111
Increase in trade and other receivables (92) (1,079) -
Increase in trade and other payables 1,363 119 1,351
(Decrease)/increase in accruals (173) 716 (1,942)
Increase in contract liabilities 2,851 1,680 1,674
(Decrease)/increase in provisions (16) 61 (438)
Net cash inflow from operations before taxation 2,069 448 1,756
Tax received 1,134 166 711
Net cash inflow from operations 3,203 614 2,467
Investing
Interest received 7 5 14
Acquisition of property, plant and equipment (119) (211) (506)
Acquisition of software licences and other intangible assets (34) - (60)
Cost of software development (4,169) (3,478) (7,986)
Net cash outflow from investing activities (4,315) (3,684) (8,538)
Financing
Interest paid (130) (144) (286)
Lease liabilities paid (917) (1,198) (2,356)
Issue of shares (net of costs) - (47) 10
Net cash outflow from financing activities (1,047) (1,389) (2,632)
Net decrease in cash (2,159) (4,459) (8,703)
Opening cash and cash equivalents 4,922 13,456 13,456
Exchange (losses)/gains on cash and cash equivalents (93) 294 169
Closing cash and cash equivalents 2,670 9,291 4,922
Notes
1. Unaudited notes
Basis of preparation and accounting policies
The financial information for the six months to 31 May 2022 is unaudited and
was approved by the Board of Directors on Monday 3(rd) July 2023.
The interim financial statements do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements for the year ended 30
November 2022.
The interim financial information for the six months ended 31 May 2023,
including comparative financial information has been prepared on the basis of
the accounting policies set out in the last annual report and accounts.
The preparation of the interim financial statements requires management to
make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income
and expense. Actual results may subsequently differ from those estimates.
In preparing the interim financial statements, the significant judgements made
by management in applying the Group's accounting policies and key sources of
estimation uncertainty were the same, in all material respects, as those
applied to the consolidated financial statements for the year ended 30
November 2022.
The Group has elected to present comprehensive income in one statement.
Going concern assumption
The Group meets its day to day working capital requirements through its cash
balance but also maintains relationships with a number of financial
institutions and believes that, should it be required, it would be able to put
in place an appropriate working capital facility. It did not have a bank loan
or overdraft at 31 May 2023 and had a net cash balance of £2,670,000.
Consequently, after making enquires, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they continue to adopt
the going concern basis of accounting in preparing the interim financial
statements.
Information extracted from the Group's 2022 Annual Report
The financial figures for the year ended 30 November 2022, as set out in this
report, do not constitute statutory accounts but are derived from the
statutory accounts for that financial year.
The statutory accounts for the year ended 30 November 2022 were prepared under
IFRS and have been delivered to the Registrar of Companies. The auditors
reported on those accounts. Their report was unqualified, did not draw
attention to any matters by way of emphasis and did not include a statement
under Section 498(2) or 498(3) of the Companies Act 2006.
2. Revenue
The Group's revenue is primarily derived from the rendering of services. The
Group's revenue was generated from the following territories:
Unaudited Unaudited Audited
6 months ended 6 months ended Year
ended
31-May-23 31-May-22 30-Nov-22
£'000 £'000 £'000
United Kingdom 10,953 10,396 20,659
North America 1,363 1,480 2,586
Europe excluding UK 983 611 1,844
Australia and New Zealand 13,520 15,852 30,876
Asia 4,135 4,284 8,797
Rest of the world 323 108 948
31,277 32,731 65,710
3. Earnings per share
The calculation of earnings per share is based upon the loss after tax for the
respective period. The weighted average number of ordinary shares used in the
calculation of basic earnings per share is based upon the number of ordinary
shares in issue in each respective period.
The impact of share options granted under the company's share option scheme
are anti-dilutive due to the Group being in a loss-making position, so the
weighted average number of ordinary shares used in the calculation of diluted
earnings per share is the same as for basic earnings per share.
This has been computed as follows:
Unaudited Unaudited Audited
As at As at As at
31-May-23 31-May-22 30-Nov-22
Numerator
Loss for the year and earnings used in basic EPS (£'000) (8,033) (1,914) (1,766)
Earnings used in diluted EPS (£'000) (8,033) (1,914) (1,766)
Denominator
Weighted average number of shares used in basic EPS ('000) 127,699 127,597 127,643
Effects of:
Dilutive effect of options N/A N/A N/A
Weighted average number of shares used in diluted EPS ('000) 127,699 127,597 127,643
Basic loss per share (pence) (6.29) (1.50) (1.38)
Diluted loss per share (pence) (6.29) (1.50) (1.38)
4. Availability of interim results
The interim results will not be sent to shareholders but will be available at
the Company's registered office at The Johnson Building, 79 Hatton Garden,
London, EC1N 8AW and on the Company's website: www.accessintelligence.com
(http://www.accessintelligence.com) .
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