REG - Access Intelligence - Trading Update

Access IntelligenceAnnouncement

16/01/2024 07:00

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RNS Number : 7659Z  Access Intelligence PLC  16 January 2024

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", the "Group" 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, is pleased to announce an update on trading for the
year ended 30 November 2023.

 

Year to 30 November 2023

During 2023, Access Intelligence focussed its efforts in two key areas: the
continued advancement of its market leading products including the release of
the Group's next generation platform into the APAC region; and further
refinement of the Group's operating model to improve EBITDA margins and free
cash flow conversion.

 

The Group's Annual Recurring Revenue ("ARR") increased by £2.7m(1) in the
period, demonstrating clear progress in growth momentum across the Group when
compared to flat year on year ARR(1) in 2022. This growth was underpinned by
both improved renewal rates and new business win performance year on year.

 

Each region within the Group contributed to the ARR growth during the year,
with a strong turnaround being delivered in APAC where the first ARR growth
has been delivered since the acquisition of Isentia. The Group's audience
intelligence proposition is resonating well where the combination of global
media monitoring and world class social listening has secured major new wins.
In addition the Group has seen a number of very encouraging winbacks from
competitors in the period as customers that had left Isentia prior to its
acquisition by Access Intelligence have now returned to benefit from the
Group's market-leading technology and services.

 

 ARR                       FY21     FY22 Change  FY22     FY23     FY23

                                                          Change

 EMEA & North America      £26.9m   +£2.5m       £29.4m   +£1.1m   £30.5m

 (Constant Currency)
 EMEA & North America      £26.9m   +£2.5m       £29.4m   +£1.1m   £30.5m

 (Reported)

 APAC                      £31.7m   -£2.5m       £29.2m   +1.6m    £30.8m

 (Constant Currency)
 APAC                      £32.0m   -£1.4m       £30.6m   +0.2m    £30.8m

 (Reported)

 Group                     £58.6m   +£0.0m       £58.6m   +£2.7m   £61.3m

 (Constant Currency)
 Group                     £58.9m   +£1.1m       £60.0m   +£1.3m   £61.3m

 (Reported)

 

The Board expects total revenue for the financial year to be
approximately £62.4m (2022: £65.7m reported, £63.9m(1)).  A clear focus
on optimisation of the Group's operating model during the year has helped the
Group to deliver year on year Adjusted EBITDA growth of 204%, and improvement
in Adjusted EBITDA margin from 3%(1) in 2022 to 11% in 2023. It is expected
that Adjusted EBITDA will be approximately £7.0m (2022: £2.3m reported,
£2.2m(1)), slightly ahead of consensus expectations(2).

 

Overall headcount (FTE) was reduced as the Group's AI led technology platform
has enabled automation of some previously manual services, improving overall
client experience through enhanced accuracy and speed of delivery, whilst
duplicate roles have been removed across the Group as the business has become
more globally integrated.

 

Net cash at 30 November 2023 was approximately £2.2m, reflecting the
additional non-recurring restructuring costs incurred during the second half
as part of the Group's effort to optimise its overall cost base leading into
2024. A new £3.0m financing facility has been put in place by the Group to
provide additional working capital headroom during 2024 as management
continues to focus on improving margins and cash generation.

 

Accelerating ARR growth in APAC

A strong turnaround has been delivered in the APAC region during the year with
first period of ARR growth since the acquisition of Isentia being delivered
during the first half (£0.3m) and an acceleration in ARR growth during the
second half (£1.3m). The overall ARR growth of £1.6m for the year represents
a £4.1m(1) improvement compared to the prior year where ARR in APAC declined
by £2.5m(1). The combination of Isentia's established media monitoring and
insights services in the region alongside Access Intelligence's audience
intelligence offering has led to a notable improvement in renewal rates
alongside much stronger new business performance and winbacks against the
competition across various sectors, including government, finance and retail.

 

A focus on profitable, long-term customer contracts alongside a reduction in
one-off campaign revenue has led to recurring revenue increasing to over 93%
for the year in the region compared to less than 90% in 2022.

 

New client wins and client winbacks in the APAC region during the second half
include: Bulgari, Chubb, Hyundai, Independent Parliamentary Expenses
Authority, Mazda, National University of Singapore, New South Wales
Government, Office of the Chief Minister, Paramount (Channel 10), Queensland
Rail, Services Australia, Western Power, and University of Auckland.

 

Continued growth in EMEA & North America

Performance in Europe continues to remain on track with ARR and margin both
increasing year on year. The previously reported slowdown in decision making
at the Enterprise level in North America has continued albeit a healthy
pipeline of opportunities continues to be developed in this market and a
number of leading global agencies including Havas and McCann have adopted our
combined audience intelligence proposition during the year. Overall ARR growth
in the EMEA & NA region for the year was £1.1m.

 

New client wins in the EMEA & NA region during the second half include:
Brooklyn Museum, CBRE, Colt Technology, Driver and Vehicle Standards Agency,
Essar Group, Financial Conduct Authority, GB Railfreight, Guardian Life, Kraft
Heinz, Marie Curie, National Grid, Natural History Museum, Phoenix Group,
Royal College Of Surgeons, Save The Children, Tesco, and UK Infrastructure
Bank.

 

Overall ARR for the year across all regions increased by £2.7m(1) (2022:
£0.0m(1)), resulting in a total ARR at 30 November 2023 of £61.3m (2022:
£58.6m(1)).

 

Outlook

In 2024 management will continue to focus on enhancing product functionality
for customers, building on the Group's market leading audience intelligence
proposition and driving further acceleration in ARR growth across both the
APAC and EMEA & North America regions.

 

The introduction of the Group's next generation product into the APAC market
during 2023 has already created significant upsell and cross-sell
opportunities. This is expected to gain momentum in 2024 as additional
features become available for customers.

In Europe, the Company also expects to see an increase in ARR growth compared
to 2023 whilst in North America, the Group's streamlined team will continue to
concentrate on a select number of high value, high margin deals through
developing enterprise corporate accounts to improve long term ARR.

Enhancing operational efficiency to improve margins has been a significant
priority in 2023 and will continue to be a core focus throughout 2024. As the
Group continues to integrate global systems more effectively, additional
opportunities to realise margin improvement and free cash flow generation are
expected. The focus on ensuring that the business operates from a lean cost
base should support further margin enhancement and positive cash flow during
2024 and beyond.

 

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

"Access Intelligence's integrated audience intelligence proposition is
pioneering an innovative approach to marketing and communications and has been
adopted by leading global agencies who forge strategies for the world's
largest brands and organisations.

 

In 2023, a notable acceleration in ARR growth and improved Adjusted EBITDA
margins has been delivered despite the challenges posed by a difficult
macro-economic environment. The turnaround in the APAC region has been
particularly remarkable, as the Group's market leading products and services
have been well-received by existing, former and new customers. This growth in
ARR in the year provides confidence of revenue growth(1) being delivered
during 2024.

 

The Board is pleased with the progress made during 2023 to deliver profitable,
global ARR growth and

remains confident about the opportunity for the Group to deliver improved
margins and free cash flow generation in 2024 and beyond."

 

 

 

 

1      On a constant currency basis.

2      The Board understands that consensus expectations for the
Company's Adjusted EBITDA for 2023 is £6.7m.

 

For further information:

Access Intelligence
plc                                                                                                                      020
3426 4024

Joanna Arnold (CEO) / Mark Fautley (CFO)

 

Cavendish Capital Markets Limited (Nominated Adviser and Broker)
 
 
 
 
 
                020 7220 0500

Corporate Finance:

Marc Milmo / Fergus
Sullivan
 

Corporate Broking:

Sunila de Silva

 

 

The Group's Nominated Adviser and Broker, finnCap Ltd, has now changed its
name to Cavendish Capital Markets Limited following completion of its own
corporate merger.

 

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