REG - Access Intelligence - Trading Update

Access IntelligenceAnnouncement

13/12/2022 07:00

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RNS Number : 4499J  Access Intelligence PLC  13 December 2022

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR.

 

 

Access Intelligence plc

("Access Intelligence" or the "Company")

Trading Update

 

Access Intelligence (AIM: ACC), the technology innovator delivering
Software-as-a-Service (SaaS) solutions for the global marketing and
communications industries, announces an update on trading for the year ended
30 November 2022.

 

Year to 30 November 2022

Access Intelligence has traded robustly in 2022 delivering excellent revenue
growth of 97% and Adjusted EBITDA ahead of consensus expectations(1) whilst
continuing to transform and integrate the Isentia business acquired in Q4
2021. In the period, the Company launched Pulsar into the Australia and New
Zealand ("ANZ") market and remains encouraged by customer engagement with its
expanded global product offering.

 

During the year, the Company has continued to optimise its software platform
and associated services for the APAC market. Advancements have been made in
the Company's media monitoring offering, including expanded coverage of print
and online news, as well as significant enhancements to broadcast monitoring
and analytics. An integration with NewsGuard also helps communications
professionals to quickly detect potential sources of misinformation before
they spread and become damaging to their client or brand.

 

At the 2022 AMEC Awards, a global awards programme for communications
measurement, Access Intelligence won five awards and was nominated for a
further six. The awards aim to recognise and celebrate exceptional work and
showcase the importance of research, measurement, insights and analytics in
communications.

 

The Board expects total revenue for the financial year to be
approximately £65.6m (2021: £33.3m, 97% growth, 14% organic growth(2)).
It is expected that Adjusted EBITDA will be approximately £2.3m (2021: loss
of £0.5m), ahead of consensus expectations(1). Net cash at 30 November 2022
was approximately £4.8 million, also ahead of consensus expectations(1).

 

Despite the challenges that wider economic conditions present in terms of
overall revenue growth, Access Intelligence has achieved its target Adjusted
EBITDA for the year through the realisation of greater than expected synergies
being delivered ahead of schedule.

 

Performance in Europe remains on track with improving Annualised Recurring
Revenue ('ARR') and margin, whilst the Company's sales in North America have
been challenged by a slowdown in decision making at the Enterprise level.
Overall ARR growth in the EMEA & NA region for the year was £2.5m.

 

New client wins in the EMEA & NA region during the second half include
Advertising Standards Authority, Airbnb, Asahi, Associated British Foods,
Aston Villa FC, Chivas Brothers, CNN International, Grant Thornton, House of
Commons, HSBC, Hubspot, Jaguar Land Rover, Lidl, Lloyds Register, News Corp,
NFU Mutual, Office for National Statistics, Save The Children, Severn Trent
Water and Tik Tok.

 

In APAC, management has focussed on ensuring that it has a stable and
profitable core business to provide the Company with the platform from which
to grow in the region in 2023 and beyond. It has achieved substantial
synergies in the region ahead of expectations and ahead of schedule and has
sold a number of deals that combine established media monitoring and insights
services in the region alongside Access Intelligence's audience intelligence
offering.

 

As well as extracting further synergies, the Company focussed on ensuring it
was delivering long term profitable recurring revenue contracts in the region
and this led to management electing not to renew a number of contracts where
the Company would not be able to deliver them profitably. Having regard to the
Company's extraction from these loss making contracts, overall ARR in the
region declined by £1.4m.

 

New client wins and client winbacks in the APAC region during the year include
Commerce Commission, Edelman, Esso, Havas, Kiwibank, Moderna, QIC, Royal
Commission into the Robodebt Scheme, Samsung, SA Power Networks, Transgrid and
the University of Sydney. Additionally, we have seen positive momentum with
Pulsar sales in APAC, with sales to Cricket Australia, Dementia Australia,
University of Otago, Sherson Willis, BizCover and Genea Fertility.

 

Overall ARR for the year across all regions increased by £1.1m, resulting in
a total ARR at 30 November 2022 of £60.0m (2021: £58.9m).

 

Outlook

In 2023 management will continue the process of transformation. The existing
Isentia product in the APAC region will be replatformed to the Company's next
generation product providing integrated media monitoring, broadcast and social
intelligence.

The new platform will allow Access Intelligence to offer its customers deep
audience understanding that is fully actionable - creating an on-going loop
between insight, strategy, execution, and optimisation. It will bring together
best-in-class audience perspectives, with clear implications for our client's
strategy and subsequent actions allowing them to respond in real time to
intelligence, and to continually learn from connections.

This will provide the Company with clear market differentiation against its
competition and customers will benefit from a significantly enhanced suite of
products and services. This next generation product is on track for launch in
Q2 2023, opening up a significant upsell and cross sell opportunity in the
region and enabling further margin improvement.

In Europe, the Company expects to see an acceleration in ARR growth compared
to 2022 whilst in North America, the Company is assuming that the current
slowdown in decision making in the Company's target market will continue into
2023. A streamlined team will target a smaller number of high value, high
margin deals through a focus on developing enterprise corporate accounts to
improve long term ARR.

In current market conditions, core products have continued to perform very
well but risk remains around the pace of growth of the Company's premium
enterprise intelligence offering where strategic budgets are under pressure.
Pipeline remains strong although contract conversion continues to be a risk
given the prevailing economic climate.

Across all regions, management are focussed on improving margin and cash
generation as a priority during 2023, with the group targeting a substantially
improved Adjusted EBITDA margin by 2024.

 

Christopher Satterthwaite, Non-Executive Chairman of the Company, said:

"Access Intelligence has seen a year of continued transformation with the
integration of Isentia progressing well. The EMEA and North America region
has continued to deliver ARR growth including a significant number of
blue-chip customers wins, whilst in APAC the focus has been on ensuring that
the business has a profitable core to support future growth underpinned by the
Company's next generation product release in Q2 2023.

 

In the near term, prevailing economic conditions are expected to continue to
prolong sales cycles for some of the Company's larger strategic enterprise
opportunities especially in the North American market, but management is
focussed on ensuring that the business maintains a lean cost base to support
margin enhancement and to protect cash flow. Access Intelligence remains well
placed to take advantage of its global opportunity through its market leading
products and award winning media insights offering.

 

Overall, the Board is pleased with the progress made during the year and
remains very positive about the opportunity for the Company to deliver
profitable growth."

 

 

 

1    The Board understands that consensus expectations for the Company's
Adjusted EBITDA for 2022 is £1.8m and that consensus expectations for the
Company's net cash position at 30 November 2022 is £4.1m.

2      Excluding Isentia, acquired September 2021.

 

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

 

 

 

 

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