REG - Access Intelligence - Trading Update

Access IntelligenceAnnouncement

22/06/2023 07:00

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RNS Number : 5132D  Access Intelligence PLC  22 June 2023

22 June 2023

 

ACCESS INTELLIGENCE PLC

("Access Intelligence", the "Company" or the "Group")

 

TRADING UPDATE

 

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 an update on trading for the
six months ended 31 May 2023.

 

The Group has made 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 expects to report ARR growth of £1.4m in the period(1),
demonstrating a significant increase in momentum in ARR growth across the
Group when compared to ARR growth of £0.5m in H1 2022(1). 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

 

·    The Board anticipates total revenue for the period to be not less
than £31.3m, compared to £32.7m in H1 2022(1) with 95% of the Group revenue
being recurring (H1 2022: 93%).

 

·    Adjusted EBITDA is anticipated to be not less than £2.0m for the
period, a year-on-year increase of £1.7m(1).

 

·    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.

 

Continued growth in EMEA & North America

In EMEA and North America the Group has continued to grow, delivering an
increase in ARR of £1.1m(1) in the period, similar to the first half of the
prior year. 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.

 

EMEA & North America revenue has increased by £1.0m compared to the prior
year comparative period due to ongoing ARR growth in the region. Regional
adjusted EBITDA has also improved due to the year-on-year revenue growth
alongside cost optimisation initiatives.

 

New client wins in EMEA include: the British Fashion Council, Carnival, the
Delegation of the European Union to the United Kingdom, Dentsu, the English
Football League, HM Land Registry, The Insolvency Service, Iris Worldwide,
Matalan, Mayborn Group, 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.

 

As previously announced, a significant contract worth £0.5m per annum has
been won in North America with a customer seeking to use the Company's
technology to obtain greater insights into its local and global communications
strategy. Other important wins in North America include Basis Technologies,
Havas, Legendary, McCann, and a partnership with Reddit to deliver strategic
research to be presented at Cannes 2023 Festival of Creativity this week.

 

First ARR growth delivered in APAC

In APAC there has been positive momentum with the region delivering ARR growth
of £0.3m(1) in the period, ahead of the full release of the Group's next
generation platform into the market expected in the next few months. In the
first half of the prior year, ARR had declined by £0.7m(1). 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.

 

Overall, APAC revenue has declined by £2.3m compared to the prior year
comparative period 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. Non-recurring revenue comprises 8% of total APAC revenue (H1
2022: 10%) and has been lower in FY23 due to customers running fewer one-off
campaigns given wider macro-economic conditions. Adjusted EBITDA in the region
has increased year on year however as a result of synergies and other cost
optimisation initiatives delivered.

 

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

The Group's cash balance at the period end was £2.7m with the Board focussed
on delivering positive cash flow in the second half through improved
profitability and working capital enhancement due to a change in the Group's
invoicing profile. Management continuously seeks to optimise the Group's
operational structure to provide a stable and profitable platform from which
to grow in all serviced global regions. This has been supported by the Group
delivering substantial synergies as part of the integration of Isentia into
the Group alongside other cost reduction initiatives.

 

The board looks forward to updating shareholders further with interim results
in July.

 

Christopher Satterthwaite, Non-Executive Chairman of Access Intelligence,
commented:

"As anticipated, the first half of the year has seen Access Intelligence
deliver a significant increase in ARR growth(1), coming from all global
regions and with the first period of ARR growth in APAC since the acquisition
of Isentia.

 

With the Group's next generation platform being released into the APAC market
during Q3 2023, there is a considerable opportunity for the Group to
accelerate growth as both existing and potential customers in the region are
able to benefit from Access Intelligence's market leading technology. In EMEA
and North America, growth has continued with a focus on signing up new
customers to take a wider range of the Group's product offering at higher
average order values.

 

The Board remains focussed on the delivery of improved profitability and cash
generation with a number of cost optimisation initiatives delivered to date
and with further focus on this during the remainder of the financial year.

 

Overall, the Board remains confident in the outlook for the Group in the
second half of the year and beyond."

 

(1.)  On a constant currency basis

 

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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