REG - Accesso Technology - Half-year Report
26/09/2024 07:00
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RNS Number : 7033F Accesso Technology Group PLC 26 September 2024
26 September 2024
accesso® Technology Group plc
("accesso" or the "Group")
INTERIM RESULTS
for the six-month period ended 30 June 2024
accesso Technology Group plc (AIM: ACSO), the premier technology solutions
provider to leisure, entertainment, and cultural markets, today announces
interim results for the six months to 30 June 2024 ('H1 2024').
Commenting on the results, Steve Brown, Chief Executive Officer of accesso,
said:
"As we set out in our most recent trading update, our first half results show
our organic business performed broadly in line with our expectations in the
first half, while our overall performance was held back by a delay to an
important project for Accesso Horizon(SM). As we recognise revenue on a
milestone basis, these delays resulted in our Group results coming in below
where we had originally hoped. This project remains a major validation of our
acquisition rationale, and we see no change to the overall contract value.
As we started the second half, the attractions sector widely reported lower
guest volumes than were anticipated. Our current guidance reflects that this
softness continued through the peak trading periods of July and August and
will likely run through the remainder of the year. We anticipate this will
normalise as operators continue to adjust pricing and promotional strategies
to align with current consumer expectations.
We are always confident that our business is diversified enough to withstand
transactional volume fluctuations over the medium and long term, but with the
effects in the current year exacerbated by the delay we experienced in accesso
Horizon, we felt it prudent to adjust our full year outlook.
Subsequently we have taken measures to limit cost expansion and preserve
margin through the second half. With the key trading periods of July and
August in hand, we are tracking towards our revised full year outlook.
While reporting these results, we must also take the opportunity to remember
Fern MacDonald, our Group CFO, who recently passed away. As a professional she
was a force for good in our company, and as a person she was a dearly loved
friend and colleague. She is sorely missed by all at Accesso, and we are all
thinking of her family at this time".
Six months ended Six months ended % change
30 June 2024 30 June 2023
Unaudited Unaudited
($000) ($000)
Group Revenue 69,194 65,783 5.2%
Ticketing and distribution 51,833 43,761 18.4%
Guest Experience 13,206 16,035 (17.6%)
Professional Services 4,155 5,987 (30.6%)
Group Revenue - constant currency 4 68,652 65,783 4.4%
Gross Profit 52,724 48,326 9.1%
Gross Margin % 76.2% 73.5% 3.7%
Cash EBITDA 1 6,482 6,481 0.1%
Statutory profit / (loss) before tax 295 (863) 134.2%
Net cash 2 18,292 9,182 99.2%
Adjusted basic earnings per share (cents) 3 8.65 7.50 15.3%
Basic earnings / (loss) per share (cents) 0.53 (1.51) 135.1%
Footnotes:
(1) Cash EBITDA: operating profit before the deduction of amortisation, impairment
of intangible assets, depreciation, acquisition and integration costs, and
costs related to share-based payments less capitalised development costs (see
reconciliation in Financial review).
(2) Net cash is calculated as cash and cash equivalents less borrowings. Lease
liabilities are excluded from borrowings on the basis they do not represent a
cash drawing.
(3) Adjusted basic earnings per share is calculated after adjusting operating
profit for impairment of intangible assets, amortisation on acquired
intangibles, acquisition costs and share-based payments, net of tax at the
effective rate for the period on the taxable adjusted items (see note 6)
(4) Revenue metrics for the period ended 30 June 2024 have been prepared on a
constant currency basis using rates from the period ended 30 June 2023 to
assist with assessing the underlying performance of the revenue streams.
Average monthly rates for H1 2023 were used to translate the monthly H1 2024
results into a constant currency using the range of currencies as set out
below:
a. GBP sterling - $1.21 - $1.26
b. Euro - $1.07 - $1.10
c. Canadian dollar - $0.73- $0.75
d. Australian dollar - $0.66-$0.69
e. Mexican pesos - $0.05 - $0.06
f. Brazilian real - $0.19 - $0.21
g. UAE Dirham - $0.27 - $0.27
h. Singapore dollar - $0.74 - $0.75
First half highlights
· Organic business trading broadly in line with expectations in first
half: Group revenue of $69.2m reflects solid Guest Experience performance
despite the absence of low-quality pass-through revenue for providing
temporary seasonal staffing present in H1 2023. Despite overall Ticketing and
Distribution revenue coming in lower than expected due to the delays in
accesso Horizon, eCommerce revenue still grew in the strong double digits, and
we saw improved revenue from Ingresso as optimisation efforts have begun to
yield results.
· New business results indicate demand environment is strong: The
Group signed 21 new venues during the period (H1 2023: 16), with particular
strength in the growing Ski (5 venues) and Live Entertainment (5 venues)
verticals. The Group's new restaurant and retail proposition accesso
Freedom(SM) won 8 new customers during the period and took 5 customers live.
Strong demand also led to the introduction of accesso ShoWare(SM) into the UK
near the end of the period, with benefit expected in the near to mid-term as
we establish market awareness and convert sales opportunities.
· accesso Horizon on track, but project delays impact growth: This
2023 acquisition provides a significant broadening of our international
presence as we focus on the wider range of global growth opportunities. The
shift in the installation timeline for a large project in the Middle East
impacted first half results and full year guidance, but project revenue and
profit profile remain fully intact.
· Solid start for accesso Paradox(SM): This innovative SaaS solution
for the Ski industry, acquired in 2023, has immediately benefited from our
prompt action to improve the solution's eCommerce offering. As a result,
nearly half a million eCommerce products were sold during the period, up by
14% compared to the same period last year. Efforts to enable the solution to
work in tandem with our other products have progressed well alongside
necessary feature enhancements to enable significant growth opportunities in
the important US Ski market.
· Full year outlook and guidance: As announced on 15 August, the
combination of changes to the implementation timeline for an important accesso
Horizon project and slightly softer than expected trading have led the Group
to adjust its full year outlook as follows: it now expects a full year revenue
outturn of approximately $150m - $153m, and a Cash EBITDA margin of 13% - 14%.
· Share buyback programme now underway: On 23(rd) August 2024 the
Group announced a share buyback programme with the intention of returning up
to a maximum aggregate amount of £4m to the Company's shareholders. This
programme is being funded from existing cash resources.
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 ("MAR").
Upon the publication of this announcement, this inside information is now
considered to be in the public domain. The Company will be hosting a webcast
presentation for analysts at 1pm. Analysts and institutional investors are
also able to request a copy of the presentation and audio webcast conference
details by contacting accesso@dgagroup.com. A copy of the presentation made to
analysts will be available for download from the Group's website, shortly
after the conclusion of the meeting.
For further information, please contact:
accesso Technology Group plc +44 (0)118 934 7400
Steve Brown, Chief Executive Officer
Matthew Boyle, Chief Financial Officer
Deutsche Numis (Nominated Adviser and Sole +44 (0)20 7260 1000
Broker)
Simon Willis, Joshua Hughes, Iqra Amin
DGA Group (Financial Public Relations) +44 (0)20 7550 9225
Adam Davidson, Leah Dudley, Corbin Ellington
About accesso Technology Group plc
At accesso, we believe technology has the power to redefine the guest
experience. Our patented and award-winning solutions drive increased revenue
for attraction operators while improving the guest experience. Currently
serving over 1,200 clients in 34 countries around the globe, accesso's
solutions help our clients streamline operations, generate increased revenues,
improve guest satisfaction and harness the power of data to facilitate
business and marketing decisions.
accesso stands as the leading technology provider of choice for tomorrow's
attractions, venues and institutions. To stay ahead, we invest heavily in
research and development because our industries demand it, our clients benefit
from it and it makes a positive impact on the guest experience. Our innovative
technology solutions allow venues to increase the volume and range of on-site
spending and to drive increased transaction-based revenue through cutting edge
ticketing, point-of-sale, virtual queuing, distribution and experience
management software.
Many of our team members have direct, hands-on experience working in the
venues we serve. In this way, we are experienced operators who run a
technology company serving attractions operators, versus a technology company
that happens to serve the market. From our agile development team to our
dedicated client service specialists, every team member knows that their
passion, integrity, commitment, teamwork and innovation are what drive our
success.
accesso is a public company, listed on AIM: a market operated by the London
Stock Exchange. For more information visit www.accesso.com
(https://www.accesso.com/) . Follow accesso on X
(https://x.com/accessotech) , LinkedIn
(https://www.linkedin.com/company/accesso) and Facebook
(https://www.facebook.com/accessoTechnologyGroup/) .
***
Chief Executive's Review
Sticking to the task: business evolution on track
During the first half of 2024 we made important progress on key strategic
priorities aimed to drive growth and profitability. Our fundamentals - a
strong transactional revenue base, a focus on operational excellence that
drives Cash EBITDA, and a strong balance sheet - underpins our approach. At
our core, we continued to serve our customers with passion, commitment and
positive impact. And in our technology, we brought new innovation to market
that continued to extend our leadership.
At the same time, we continued to integrate the acquisitions made in 2023 that
will form a critical part of tomorrow's accesso. The market reception for
these acquisitions - particularly accesso Horizon, our market leading
ticketing and visitor management system, and accesso Paradox, our new solution
for the important ski market - has reinforced our conviction in the future
prospects for the Group.
In accesso Horizon, we were particularly pleased to announce our first
post-acquisition marquee win for the product with 21 venues being constructed
by Saudi Entertainment Ventures, a wholly owned subsidiary of the Saudi Arabia
Public Investment Fund (PIF). This win in a greenfield market shows why we
remain so convinced of accesso Horizon's place in our portfolio of leading
solutions.
Returning to the current year, our start to the second half has been informed
by slightly lower-than-expected trading volumes in the early and mid-summer in
various markets across the globe. Although still exhibiting growth, the uptick
has been lower than we had anticipated. In totality, transactional revenue
trends in H1 were broadly in line with our expectations, but slightly less
robust than we had hoped. When July trading results were lower than our
expectations alongside increased clarity in regard to the timeline for a key
accesso Horizon project, it became evident we should adjust our full year
outlook to reflect a prudent assumption that this softness would continue
through the rest of calendar 2024.
Despite these headwinds, our conviction in our long-term business prospects
remains unchanged for three main reasons. First, our business is increasingly
diversified. Second, our customer relationships are incredibly strong, and our
product offering stands heads above the competition in both the quality of the
solutions and our reputation for high quality delivery. Third, our new
business activity shows increasing demand for our products and services. Of
course, we are disappointed not to have continued our accelerating growth in
this period and to have lowered our expectations for the full year. However,
we remain 100% committed to our growth plan, and equally confident in the
long-term resilience of our business.
Financial performance
During the first half the Group delivered revenue of $69.2m at growth of 5.2%
year-on-year. Excluding the reimbursement revenue received for providing
temporary seasonal staff to a major customer, which ended in H2 2023, revenue
growth was 9.9%. While lower than our expectations, business activity remained
at a solid level, which indicates ongoing robust demand for our technology.
With staffing levels generally in line with our go-forward expectations,
operational efficiency remains a key priority. Excluding the impact of
acquisitions, our underlying cost base increased 4.3% compared to the prior
year period.
Cash EBITDA of $6.5m (H1 2023: $6.5m) was affected by lower-than-expected
revenue performance. Total Gross Profit increased slightly to $52.7m (H1 2023:
$48.3m). After a strategically significant year in 2023 with three important
acquisitions we are broadly comfortable with the shape of our business going
forward. Cost control and profit optimisation remain critical objectives for
the Company, and we expect profit growth to resume in 2025. Our strong balance
sheet and continued cash generation means we are well positioned for future
growth and have demonstrated success in taking advantage of strategic
opportunities as they arise.
Operating review
Organic first half trading broadly in line with expectations
Excluding the impact of customer-side timeline shifts on an important accesso
Horizon project, our first half revenue result of $69.2m was broadly in line
with our plan, driven primarily by strong double-digit growth in our Ticketing
and Distribution segment, which was 18.4% ahead of the prior period including
the impact of acquisitions. On an organic basis, also excluding the impact of
the low-quality pass-through revenue, our Group revenues were 3.4% ahead of
the prior period. This growth was driven by our distribution business, led by
Ingresso, showing new signs of growth following changes to the operational
structure, delivering revenues 48.4% ahead of H1 2023. With emerging softness
in venue attendance, organic ticketing revenue increased less than expected
with growth of 1.4% ahead of the prior year period.
Our Guest Experience revenues were impacted by the planned structural change
in seasonal staffing provided to a major customer ($2.8m H1 2023). The Group's
shift away from this low-quality pass-through revenue was completed in H2
2023. Excluding this impact, Guest Experience revenues were in line with the
prior period. Again, this was despite attendance headwinds particularly at the
start of the peak trading period in June.
To better present our revenues going forward we have removed Professional
Services from the Guest Experience segment in both the current and prior
period. This Professional Services revenue will be shown as a separate
standalone segment from this period onwards. These revenues are for services
that stand separate from our transactional and license revenues and fluctuate
depending on customer project life cycles.
Ongoing new business success and increasing geographical diversification
During the first half the Group continued to see solid new business momentum
demonstrating the enduring appeal of its products to customers. At the end of
June, we had signed 21 new venues in the period, up from 16 in the same period
last year, with growth continuing to come from strategically important sectors
including Ski and Live Entertainment. It was also pleasing to see accesso
Freedom, our new restaurant and retail platform, continuing to resonate with
customers and deliver 8 wins. Even before the financial benefits start to
accrue, these successes act as important reference points in the market and
act as strong proof of this new, highly complementary product offering.
From a geographic perspective, we also continued to broaden our footprint and
increase the diversification of our revenue driven by recent acquisitions. For
example, we generated $1.2m revenue from the Middle East (H1 2023: $nil) and
revenues from the Asia Pacific region increased by 25.1% compared to H1 2023.
Capturing new opportunities in the broader global market is a key priority and
increasing our market presence in these regions sets the stage for expansion
from both the newly acquired solutions and our broader range of products.
Acquisition strategy validated by market acceptance for key new products
During 2023 accesso made three strategic acquisitions, two of which have given
us new and important products to add to our portfolio. The acquisition of VGS,
now accesso Horizon, and Paradocs Mountain Software, now accesso Paradox, are
both receiving positive feedback from customers and continuing to win business
that will support improved financial outcomes for the group going forward.
In the case of accesso Horizon, in March we were able to announce a major win
in the strategically important Middle East region with Saudi Entertainment
Ventures (SEVEN). This venture selected our solution as the key provider to a
project that will involve 21 new cutting-edge entertainment destinations
across 14 cities, featuring over 150 attractions. These will include diverse
dining outlets, and local and international retail outlets that complement the
overall entertainment ecosystem that SEVEN is spearheading. This unique
deployment showcases the full range of accesso Horizon's capability to other
likely buyers in this high-investment region, and demonstrates the level of
differentiation this product offers in the marketplace.
For accesso Paradox we remain on track with our initial growth plan with 7
resorts signing since acquisition. Difficult North American weather conditions
at the end of 2023 and during early H1 2024 slowed some operators from making
commitments to a new solution in the immediate months that followed. Alongside
selling to new venues, the solution provides an important pathway for ski
customers using our on-prem product, accesso Siriusware(SM), who desire a
transition to a cloud-based SaaS solution. In terms of cross-sell opportunity,
we are seeing notable market interest in the combination of accesso Paradox
and accesso Freedom as a comprehensive package for ski venue operators.
Post period end summer trading
As outlined in our Trading Update in August, consumer trading volume across
our key end markets was below our expectations in the initial weeks after the
period ended. Our revised full year revenue guidance assumes these lower
volumes persist through the remaining peak months of the year.
Product and technology
The quality and interoperability of accesso's technology continues to set the
business apart against competition in the market. The Group also remains
committed to furthering its market leading position by continually investing
in and advancing its products. For example, during the period the connection
between accesso Freedom and accesso Siriusware was completed and now allows
customers to seamlessly utilise the two products alongside each other. The
fully updated accesso Passport eCommerce offering was finalised and
implemented by all major customers prior to the key summer trading period. A
new mobile POS solution compatible with accesso Siriusware and accesso
Passport customers was completed to enable the untethered sale of tickets,
parking and other items. For accesso Paradox, several of the key feature
enhancements to bring the solution to the US market were delivered including
the integration of accessoPay. With accesso ShoWare, localisation requirements
were completed that enabled the launch of the solution in the UK, including
functionality for VAT, language and reporting. The integration to Salesforce
was also delivered for accesso ShoWare as this has been identified as a key
requirement across the target customer base.
Further to the items that were completed in the period, efforts on larger
scale, mid-term initiatives continued to progress. eCommerce is at the core of
our commercial success and our continued focus on innovation is central to
maintaining market leadership and achieving our growth objectives. The
development of a re-envisioned eCommerce solution for accesso Passport is
underway that will improve flexibility to customize for customers, expand
analytic capabilities and increase operational efficiency. This new offering
is designed with the flexibility to work seamlessly with other core solutions,
including accesso Paradox with some early implementations targeted for
mid-2025.
People and culture
The quality of our team remains a key competitive advantage. Ongoing
relationships with our clients are key to their satisfaction and the
continuity of internal knowledge leads to higher quality operational and
engineering success. At the end of the period, employee turnover of 4% is
trending slightly lower than at the same point in the prior year. Our annual
employee engagement survey was completed in May with 95% participation and an
overall score placing us again in 75(th) percentile of benchmark companies.
We launched our first ever Emerging Leader program, which is an interactive,
virtual leadership development program for new or soon to be aspiring leaders.
In our continued commitment to DEI, we re-launched our Women's Leadership
Development Program, IgniteHer, which aims to empower women and illuminate
opportunities for career advancement at accesso and beyond. We also partnered
with Technovation, a global tech education nonprofit that inspires girls to be
leaders and problem solvers in their communities, to provide volunteers to be
virtual judges who give valuable feedback to teams of girls on the mobile apps
they build.
CFO Transition
On 12 August this year, accesso CFO Fern MacDonald tragically passed away
following an unflinching battle with cancer. Ms. MacDonald was a model CFO, a
trusted advisor, and a friend to many, who will be sorely missed by all at
accesso. The thoughts of those at the Group are with Ms. MacDonald's family at
this time.
Matthew Boyle, who held the position of Group VP Finance at the time of Ms.
MacDonald's passing, has assumed the role of CFO. Mr. Boyle is an experienced
practitioner who has been with the Group for five years, serving two of those
as Ms. MacDonald's deputy. In 2023, he was a key figure in driving the Group's
successful completion of three major acquisitions. His expertise in financial
reporting, commercial analysis, and business leadership continues to support
the Group. Prior to accesso, Mr. Boyle was with BDO UK LLP for 8 years,
serving large international groups and AIM listed businesses in both the audit
and transaction services functions. Mr. Boyle graduated with First-Class
degree in Accounting and Finance from the University of Southampton and is
a member of Institute of Chartered Accountants in England and Wales (ICAEW).
Outlook
The demand for accesso's products, and the strength of the Group's end
markets, gives us confidence in the continued success of our business. While
there has been some softness in consumer trading over the summer months,
accesso has taken prudent measures to limit the near-term and preserve margin
through the second half, and the Board is confident in the revised revenue
expectations for the full year. The Group's robust financial position and the
strength of our business platform will return us to our intended growth path
next year.
Financial Review
Financial overview
In the first half of 2024, the Group delivered revenue of $69.2m, up 5.2% on
last year, or 4.4% at constant currency. Excluding the low-quality
pass-through revenue received for providing temporary seasonal staff to a
major customer, which ended in H2 2023, revenue growth was 9.9%. We delivered
strong gross profit growth with our margin up 2.7 percentage points
year-on-year at 76.2% (H1 2023: 73.5%). This gross margin increase reflects an
ongoing improvement in the quality of our overall revenue stream. Our flat
Cash EBITDA performance reflects higher administrative expenses due to the
increased size of our overall business, as a result of three acquisitions in
the prior year, set against slightly lower than expected revenue growth in the
period. With our revenue outturn primarily related to a project delay, we are
confident our growth trajectory will resume as planned as we move towards and
into 2025.
Key performance indicators and alternative performance measures
The Board continues to utilise consistent alternative performance measures
("APMs") internally and in evaluating and presenting the results of the
business. The Board views these APMs as representative of the Group's
underlying performance.
The historic strategy of enhancing accesso's technology offerings via
acquisitions, as well as an all-employee share option arrangement, necessitate
adjustments to statutory metrics to remove certain items which the Board does
not believe are reflective of the underlying business.
By consistently making these adjustments, the Group provides a better
period-to-period comparison and is more readily comparable against businesses
that do not have the same acquisition history and equity award policy.
APMs include Cash EBITDA, Adjusted basic EPS, net cash, underlying
administrative expenditure and repeatable and non-repeatable revenue analysis
and are defined as follows:
· Cash EBITDA is defined as operating profit before the deduction
of amortisation, impairment of intangible assets, depreciation, acquisition
and integration costs, and costs related to share-based payments less
capitalised internal development costs;
· Adjusted basic earnings per share is calculated after adjusting
operating profit for impairment of intangible assets, amortisation on acquired
intangibles, acquisition costs and share-based payments, net of tax at the
effective rate for the period on the taxable adjusted items;
· Net cash is defined as available cash less borrowings. Lease
liabilities are excluded from borrowings on the basis they do not represent a
cash drawing;
· Underlying administrative expenses are administrative expenses
adjusted to add back the cost of capitalised development expenditure and
property lease payments and remove amortisation, impairment of intangible
assets, depreciation, acquisition costs, and costs related to share-based
payments. This measure is to identify and trend the underlying administrative
cost before these items; and
· Repeatable revenue consists of transactional revenue from
Virtual Queuing, Ticketing and eCommerce and is defined as revenue earned as
either a fixed amount per sale of an item, such as a ticket sold by a customer
or as a percentage of revenue generated by a venue operator. Normally, this
revenue is repeatable where a multi-year agreement exists and purchasing
patterns by venue guests do not significantly change. Other repeatable revenue
is defined as revenue, excluding transactional revenue, that is expected to be
earned through of a customer's agreement, without the need for additional
sales activity, such as maintenance and support revenue. Non-repeatable
revenue is revenue that occurs one-time (e.g. up-front licence fees) or is not
repeatable based upon the current agreement (e.g. billable professional
services hours) and is unlikely to be repeatable without additional successful
sales execution by accesso. Other revenue consists of hardware sales and
other revenue that may or may not be repeatable with limited sales activity if
customer behaviour remains consistent.
The Group considers cash EBITDA, which disregards any benefit to the income
statement of capitalised development expenditure, as its principal operating
metric.
These APMs should not be viewed in isolation but as supplementary information.
As adjusted results include the benefits of the Group's acquisition history
but exclude significant costs (such as significant legal or amortisation
expenditure), they should not be regarded as a complete picture of the Group's
financial performance, which is presented in its total results.
Key Financial Metrics
Group revenue for the first half of 2024 was $69.2m (H1 2023: $65.8m), up 5.2%
on H1 2023. While we are happy to have seen growth, the results were behind
the ambitious expectations we set ourselves at the outset of the year. As we
explained in our trading update in August 2024, a material portion of expected
revenue from accesso Horizon in the Middle East has yet to come through due to
a shift in the client's project timeline. This has impacted the anticipated
growth in the Ticketing and Distribution segment and, when delivered, will be
largely comprised of one-time license fees and professional services, with
increasing maintenance & support as the project progresses.
We set out details of our revenue by segment, geography and repeatable to
non-repeatable analysis below.
Revenue on a segmental basis was as follows:
Six months ended 30 June 2024 Six months ended 30 June 2023*
Unaudited Unaudited
$000 $000 %
Ticketing 41,146 36,560 12.5%
Distribution 10,687 7,201 48.4%
Ticketing and distribution 51,833 43,761 18.4%
Virtual queuing 11,196 10,876 2.9%
Virtual queuing - staffing cost reimbursement - 2,811 (100.0%)
Other guest experience 2,010 2,348 (14.4%)
Guest experience* 13,206 16,035 (17.6%)
Professional Services* 4,155 5,987 (30.6%)
Total revenue 69,194 65,783 5.2%
*The Guest Experience segment has been restated to exclude Professional
Services that are not being provided in conjunction with one of our products.
The prior period Guest Experience revenue was $22.6m being the sum of the
Guest Experience and Professional Services H1 2023 amounts.
Ticketing and Distribution
Ticketing and Distribution revenue was up 18.4% up on H1 2023, driven by
Ticketing up 12.5% and Distribution up 48.4%. This segment includes the
benefit of a full period of accesso Horizon and accesso Paradox following
their acquisitions made towards the end of H1 2023. Together, these
acquisitions contributed $4.1m of the increase in Ticketing revenue. Excluding
these acquisitions, Ticketing would have increased by 1.4%.
Distribution revenues increased by 48.4% which reflects the addition of a
significant new distribution partner in H2 2023. This partner's revenues for
the period H1 2024 contribute the majority of the increase alongside positive
increases in existing customers using one of our ticketing solutions
integrating further with our distribution platforms to widen their sales
channels. We made the strategic decision to move away from the lower margin
consumer direct portion of our Distribution business and near the end of the
period transitioned that operation to one of our key distributors.
Guest Experience
Within the Guest Experience segment, and as noted in annual results for the
year ended 31 December 2023, a change in strategy resulted in the management
and provision of seasonal labour being returned to a major customer from July
2023. A further breakdown of the virtual queueing (accesso LoQueue®) revenue
within the Guest Experience segment is presented in the table below. H1 2024
included hardware sales of $1.8m of accesso Prism(SM) bands to a blue-chip
customer. While transactional volumes on queueing are broadly in line with the
prior period, some customers have adjusted their service which resulted in
transactional revenues being down 7.2%.
Six months ended 30 June 2024 Six months ended 30 June 2023*
Unaudited Unaudited
$000 $000 %
Virtual queuing - transactional 9,417 10,150 (7.2%)
Virtual queuing - staffing cost reimbursement - 2,811 (100.0%)
Virtual queuing - hardware 1,767 657 168.9%
Other guest experience 2,022 2,417 (16.3%)
Guest experience* 13,206 16,035 (17.6%)
*The Guest Experience segment has been restated to exclude Professional
Services that are not being provided in conjunction with one of our products.
The prior period Guest Experience revenue was $22.6m being the sum of the
Guest Experience and Professional Services H1 2023 amounts.
Professional Services
For the current period we have split revenues generated within The Experience
Engine(TM) (TE2) between platform fees, which remain in the Guest Experience
segment, and the delivery of bespoke Professional Services to large customers
in the ski, theme park, and cruise ship markets, which move to a separate
Professional Services segment.
The platform fees for TE2 were in line with our expectation and were 2.4%
ahead of the prior period.
Our Professional Services segment revenues cover those that are not associated
with a particular product. As a key technology infrastructure partner, large
attraction and leisure operators look to us to provide support for their own
internal project cycles. We realise that this element of our business will
fluctuate year over year, however we are positioned to take the opportunities
when they arise. In H1 2024, Professional Services revenues were down an
expected $1.8m (30.6%) reflecting anticipated project fluctuations with two of
our larger customers when compared to H1 2023.
Revenue on a geographical basis was as follows:
Six months ended 30 June 2024 Six months ended 30 June 2023
Unaudited Unaudited*
$000 $000 %
USA 41,562 44,507 (6.6%)
Canada 2,317 1,525 51.9%
United Kingdom 14,565 11,550 26.1%
Other Europe 3,049 2,796 9.0%
Middle East 1,184 - -
Asia/Australia/South Pacific/Africa 4,221 3,374 25.1%
Mexico 1,845 1,688 9.3%
Other Central and South America 451 343 31.5%
Total revenue 69,194 65,783 5.2%
*This disclosure has been enhanced to present disaggregated revenue for USA,
Canada in the comparative period. USA and Canada were previously presented as
an aggregated total of $46.0m.
Our revenues in the USA decreased 6.6% compared to H1 2023 which includes the
planned decrease in virtual queueing seasonal staffing cost reimbursement as
well as the decrease in Professional Services revenues discussed earlier in
this report. These decreases were offset by revenues from our ticketing
products, predominantly accesso Horizon but also accesso Passport and accesso
ShoWare. Canadian revenues increased 51.9% following a full period of accesso
Paradox revenues after the acquisition in late April 2023.
As noted above, the primary reason for the 26.1% increase in UK revenues was
the performance of the Distribution business following the signing of new
distributor agreements in H2 2023.
We generated $1.2m revenues in Middle East as well as increasing revenues in
Other Asia, Australia and South Pacific by 25.1%. These increases are a result
of the acquisition of accesso Horizon which is delivering ongoing projects to
blue chip customers in Middle East, Japan, and Singapore as well as the
completion of a major zoo implementation in Australia.
Similarly, our European revenues benefitted from $0.5m revenues generated
through the Italian office of accesso Horizon.
Our Mexico, Central and South American regions continued to improve upon their
positive performance in 2023 with revenue increases of 9.3% and 31.5%
respectively. This is the result of the live entertainment products delivering
volumes in excess of the prior period.
Revenue quality
Six months ended 30 June 2024 Six months ended 30 June 2023
Unaudited Unaudited*
$000 $000 %
Virtual queuing 9,417 10,150 (7.2%)
Virtual queuing seasonal staffing cost reimbursement - 2,811 (100.0%)
Ticketing and eCommerce 41,649 36,968 12.7%
Transactional revenue 51,066 49,929 2.3%
Maintenance and support 5,044 3,842 31.3%
Platform fees 1,694 1,655 2.4%
Recurring license revenue 1,072 354 202.5%
Total Repeatable 58,876 55,780 5.5%
One-time licence revenue 856 828 3.4%
Professional services inclusive of product related fees 5,650 6,655 (15.1%)
Non-repeatable revenue 6,506 7,483 (13.1%)
Hardware 1,927 1,245 54.8%
Other 1,885 1,275 47.8%
Other revenue 3,812 2,520 51.3%
Total revenue 69,194 65,783 5.2%
Total Repeatable as % of total 85.1% 84.8%
*Certain revenue categorisations have been reclassified in the prior year
comparative to reflect the alignment of revenues from acquisitions in the
prior period with the existing products. Categorisation for the prior period
to 30 June 2023 was previously disclosed as follows: Maintenance and support
($3,454k), Recurring license revenue ($nil), One-time license fees ($1,182k)
and Professional services inclusive of product related fees ($7,044k). With
these reclassifications, the total percentage of repeatable revenue for the
prior period has increased to 84.8% from 84.0%.
The above is an analysis of the Group's revenue by type. Transactional revenue
consisting of Virtual Queuing, Ticketing and eCommerce is defined as revenue
earned as either a fixed amount per sale of an item, such as a ticket sold by
a customer, or as a percentage of revenue generated by a venue operator.
Normally, this revenue is repeatable where a multi-year agreement exists and
purchasing patterns by venue guests do not significantly change, as they did
in 2020 as a result of the pandemic. Other repeatable revenue is defined as
revenue, excluding transactional revenue, that is expected to be earned
through each year of a customer's agreement, without the need for additional
sales activity, such as maintenance and support revenue.
Repeatable revenue of 85.1% is consistent with the 84.8% H1 2023.
Non-repeatable revenue is revenue that occurs one-time (e.g. up-front license
fees) or is not repeatable based upon the current agreement (e.g. billable
professional services hours) and is unlikely to be repeatable without
additional successful sales execution by accesso.
The Group's transactional revenue streams have continued to grow, up 2.3% on
H1 2023, largely driven by the increase in distribution revenue discussed
above.
Maintenance and support revenue increased 31.3% and recurring license revenue
increased by 202.5% following the acquisition of accesso Horizon which has a
largely operated a license and support model, comprising both one-time
licenses and repeatable recurring licenses, rather than our typical usage
basis for ticketing & eCommerce customers.
Non-repeatable revenue is revenue that occurs one-time (e.g., up-front license
fees) or is not repeatable based upon the current agreement (e.g., billable
professional services hours) and is unlikely to be repeatable without
additional successful sales execution by accesso. There was a 13.1% decrease
in non-repeatable revenue owing to lower Professional Services for the reasons
set out earlier in this review.
Other revenues (primarily hardware-related) were 51.3% higher than H1 2023.
Hardware revenues are primarily the large sale of accesso Prism bands to a
blue-chip customer that typically arise biannually. Other revenues comprise
commissions received from the Group's guest ticket insurance partners as well
as third-party hardware partners. Other revenue also includes referral
commissions received from the Group's guest payment gateway partners.
Gross Margin
The Group recorded a gross profit increase of 9.1% from $48.3m to $52.7m. This
gross profit was delivered at an improved gross margin of 76.2% (H1 2023:
73.5%). This improvement in gross margin is reflective most notably of the
removal of the seasonal staffing reimbursement revenue from the Group's
virtual queueing agreement with a customer.
Administrative expenses
Reported administrative expenses increased 4.9% to $51.5m in the period (H1
2023: $49.1m) and underlying administrative expenditure increased by 10.8% to
$46.6m. Both metrics increased due to the inclusion of a full period of costs
from the three acquisitions made in H1 2023. Excluding the impact of these
acquisitions and the related acquisition costs on both periods, reported
administrative expenses would have increased 1.1% and underlying
administrative expenses by 4.3%. The Group's headcount, including contractors,
has slightly decreased in the current period from 692 at the end of December
2023 to 680 at the end of June 2024. We are continuing to mitigate the impact
of revenue shortfalls by managing the cost base accordingly.
Six months ended 30 June 2024 Six months ended 30 June 2023
Unaudited Unaudited
$000 $000
Administrative expenses as reported 51,516 49,127
Capitalised development expenditure (1) 1,238 1,616
Amortisation related to acquired intangibles (1,962) (668)
Share-based payments (2,163) (1,059)
Amortisation and depreciation (2) (2,363) (4,706)
Property lease payments and receipts not in administrative expense 396 262
Exceptional expenditure on acquisition & integration related costs (24) (2,466)
Underlying administrative expenditure 46,638 42,106
(1) See consolidated cash flow statement.
(2) This excludes acquired intangibles but includes depreciation on
right of use assets.
Cash EBITDA
The Group delivered cash EBITDA for the period of $6.5m (H1 2023 $6.5m). While
the Group has increased gross profit by $4.4m, this has been offset by a
similar increase in underlying administrative expenses. As explained earlier
in this review, we had anticipated further revenue growth in H1 2024 from our
Middle East projects however these project timelines have shifted. As a
result, our cash EBITDA, while in line with the prior period, is below our
expectations. As a Group we continue to invest heavily in our products, our
total development expenditure increased to $21.8m, 2.8% higher than H1 2023
because of the spend on acquired products, accesso Horizon and accesso
Paradox. These development costs include accesso Freedom, our new food and
beverage platform, which has seen positive sales momentum since its launch in
November 2023.
The table below sets out a reconciliation between statutory operating profit
and cash EBITDA:
Six months ended 30 June 2024 Six months ended 30 June 2023
Unaudited Unaudited
$000 $000
Operating profit / (loss) 1,208 (801)
Add: Exceptional expenditure on acquisition & integration related costs 24 2,466
Add: Amortisation related to acquired intangibles 1,962 668
Add: Share-based payments 2,163 1,059
Add: Amortisation and depreciation (excluding acquired intangibles) 2,363 4,705
Less: Capitalised internal development costs paid in cash (1,238) (1,616)
Cash EBITDA 6,482 6,481
The Group recorded an operating profit of $1.2m in H1 2024 (H1 2023: loss of
$0.8m); and adjusted earnings per share in the first half of 2024 of 8.65
cents (H1 2023: 7.50 cents).
Development expenditure
Six months ended 30 June 2024 Six months ended 30 June 2023
Unaudited Unaudited*
Total development expenditure 21,848 21,246
% of total revenue 31.6% 32.3%
*Development expenditure for the period ended 30 June 2023 has been restated
to exclude $0.5m relating to product delivery which was previously categorised
within development.
Our total development expenditure for H1 2024 increased to $21.8m, 2.8% higher
than H1 2023, driven by a full period of the acquired entities, accesso
Paradox and accesso Horizon, expenditure being included within H1 2024. These
increases were offset by the impact of several staffing reductions made toward
the end of H2 2023 within the Engineering functions. These reductions
reflected changes in the Group's product roadmaps following the acquisitions
made during H1 2023.
Development expenditure represents all expenses incurred by the Group's
Engineering and Product Management functions, predominantly comprising payroll
and software related costs. It is important to note that although these costs
include research and development activities to determine product roadmaps and
the engineering resources to deliver those items, the categorization also
include a wider range of expenses. Costs to maintain our existing solutions
and work with our customers to provide help desk technical support are also
reflected in development expenditure. The Group's own internal IT &
Security functions as well as staffing related to cloud infrastructure support
for our SaaS solutions are a further part of the categorisation. The Group is
evaluating options to present this development spend on a more disaggregated
basis.
The Group capitalises elements of development expenditure where it is
appropriate and in accordance with IAS 38 Intangible Assets. Capitalised
development expenditure of $1.2m (H1 2023: $1.6m) represents 5.7% (H1 2023:
7.6%) of total development expenditure. The Group's research and development
includes both the improvement of existing customer products, which in turn
leads to increased customer satisfaction and retention, as well as a focus on
creating new revenue streams. It continues to be critical to continue to meet
and exceed the expectations of our existing customers' requirements and the
current solutions they utilise. Development continues to expand the product
set and add features that will be important for our customers' operations in
the future.
Cash and net cash
Net cash at the end of the period has reduced to $18.3m from $31.5m at 31
December 2023. This is the result of a working capital cycle that follows the
seasonality of the Group's trade which peaks in the summer months with cash
generation following shortly thereafter.
30 June 2024 30 June 2023 31 December 2023
$000 $000 $000
Cash in hand & at bank 37,202 43,175 51,814
Borrowings (18,910) (33,993) (20,349)
Net cash 18,292 9,182 31,465
The Group delivered operating cashflow before movements in working capital of
$7.8m (H1 2023: $6.3m). This increase was due to greater profitability in the
current period.
The Group had an outflow of $5.6m from financing activities. This included
outflows of $2.8m on the purchase and cancellation of accesso's own shares
through the buyback programme and a repayment of $1.5m on the Group's
revolving credit facility. As of 30 June 2024, the Group had drawn $19.75m
($18.9m net of finance costs) of the $40.0m facility that expires in May 2027.
Dividend and share repurchases
The Board maintains its consistent view that the payment of a dividend is
unlikely in the short to medium term with surplus cash more efficiently
invested in share repurchases, strategic product development or, where the
opportunities arise, value accretive acquisitions.
During H2 2023, the Board approved a share repurchase programme of up to
£4.0m. During the period, a further 407,712 shares were repurchased and
cancelled for $2.8m (GBP £2.2m). The programme was concluded on February 29,
2024 with a total repurchase and cancellation of 706,984 shares for a total
consideration of $5.0m (GBP £4.0m).
Post period end, the Board approved a further share repurchase programme of up
to £4.0m which commenced on August 23, 2024. As of 25 September 2024, 334,801
shares have been purchased under this programme for a total consideration of
$2.3m (GBP £1.8m).
Impairment
In line with relevant accounting standards, the Group reviews the carrying
value of all intangible assets on an annual basis or at the interim where
indicators of impairment exist. Management is not aware of any conditions
arising in the period to 30 June 2024 which would materially impact the
recoverable amount for each CGU.
Taxation
The effective tax rate (being the tax rate on profit before income tax) for
the period was 27.7% (H1 2023: 27.6%). The effective tax rate for the full
year is likely to be similar to the half year.
- ENDS -
Consolidated statement of comprehensive income
for the six-month period ended 30 June 2024
30 June 2024 Unaudited 30 June 2023 Unaudited 31 December 2023
Audited
Notes $000 $000 $000
Revenue 69,194 65,783 149,515
Cost of sales (16,470) (17,457) (35,268)
Gross profit 52,724 48,326 114,247
(51,516) (49,127) (104,308)
Administrative expenses
Operating profit before exceptional items 1,232 1,665 12,635
Acquisition and integration related expenditure (24) (2,466) (2,690)
Impairment of intangible assets - - (6)
Operating profit / (loss) 1,208 (801) 9,939
Finance expense (1,184) (509) (2,084)
Finance income 273 447 953
Profit / (Loss) before tax 297 (863) 8,808
Income tax (charge) / benefit 4 (82) 238 (1,116)
Profit / (Loss) for the period 215 (625) 7,692
Other comprehensive income
Items that will be reclassified to income statement
Exchange differences on translating foreign operations 394 2,597 3,138
394 2,597 3,138
Total comprehensive income 609 1,972 10,830
All loss and comprehensive loss is attributable to the owners of the parent
Earnings / (Loss) per share expressed in cents per share:
Basic 6 0.53 (1.51) 19.19
Diluted 6 0.51 (1.51) 18.67
All activities of the company are classified as continuing.
Consolidated statement of financial position as at 30 June 2024
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
Restated*
$000 $000 $000
Assets
Non-current assets
Intangible assets 163,466 164,523 165,188
Property, plant and equipment 1,065 1,430 1,346
Right of use assets 1,591 2,024 1,609
Contract assets 634 251 784
Deferred tax 16,869 15,479 16,703
183,625 183,707 185,630
Current assets
Inventories 447 576 1,115
Finance lease receivables 85 - 165
Contract assets 5,176 4,944 3,345
Trade and other receivables 28,997 26,138 29,700
Income tax receivable 2,340 3,830 2,199
Cash and cash equivalents 37,202 43,175 51,814
74,247 78,663 88,338
Liabilities
Current liabilities
Trade and other payables* 23,225 25,401* 34,939
Lease liabilities 759 689 792
Contract liabilities 5,087 5,670 7,353
Corporation tax payable 5,599 386 6,115
34,670 32,146 49,199
Net current assets 39,577 46,517 39,139
Non-current liabilities
Deferred tax 8,808 9,712 8,821
Contract liabilities 762 138 927
Lease liabilities 1,057 1,518 1,177
Borrowings 18,910 33,993 20,349
29,537 45,361 31,274
Total liabilities 64,207 77,507 80,473
Net assets 193,665 184,863 193,495
Shareholders' equity
Called up share capital 602 598 603
Share premium 154,171 153,741 153,948
Retained earnings 29,274 23,321 31,196
Merger reserve 19,641 19,641 19,641
Translation reserve (2,052) (2,987) (2,446)
Own shares held in trust (7,980) (9,451) (9,451)
Capital redemption reserve 9 - 4
Contingently issuable shares* - -* -
Total shareholders' equity 193,665 184,863 193,495
*Contingently issuable shares of $1.0m have been reclassified to trade and
other payables as a current liability in the comparative
Period. These relate to contingent consideration in relation to the
acquisition of Paradocs Solutions, Inc on 21 April 2023 and were
previously disclosed within equity for the period ended 30 June 2023.
Consolidated statement of cash flows
for the six-month period ended 30 June 2024
30 June 2024 30 June 2023 Unaudited 31 December 2023 Audited
Unaudited Restated*
$000 $000 $000
Cash flows from operations
Profit / (Loss) for the period 215 (625) 7,692
Adjustments for:
Depreciation (excluding finance leased assets) 463 495 975
Depreciation on leased assets 285 187 467
Amortisation on acquired intangibles 1,962 668 2,811
Amortisation on development costs and other intangibles 1,616 4,024 6,390
Impairment of intangible assets - - 6
Loss on disposal of fixed assets 5 103 207
Share-based payments 2,163 1,059 3,187
Movement on bad debt provision 132 (112) 41
Finance expense 1,184 509 2,084
Finance income (273) (447) (953)
Foreign exchange loss / (gain) (64) 673 (187)
Income tax (credit) / charge 82 (238) 1,116
Operating cashflow before movement in working capital 7,770 6,296 23,836
Decrease / (Increase) in inventories 667 (77) (614)
Decrease in trade and other receivables 742 5,762 2,082
(Increase) / decrease in contract assets/contract labilities (4,092) (2,247) 1,960
(Decrease) in trade and other payables (11,495) (9,819) 432
Cash (used in) / generated from operations (6,408) (85) 27,696
Tax paid (894) (1,402) (2,003)
Net cash (outflow) / inflow from operating activities (7,302) (1,487) 25,693
Cash flows from investing activities
Acquisition of VGS Companies (net of cash acquired) - (39,323)* (39,323)
Acquisition of Paradocs Solutions, Inc. (net of cash acquired) - (8,845)* (8,845)
Acquisition of Boxer Consulting Limited (net of cash acquired) - (1,792)* (1,792)
Capitalised internal development costs (1,238) (1,616) (2,839)
Purchase of intangible assets - (15) (14)
Purchase of property, plant and equipment (200) (148) (638)
Proceeds from sale of intangible assets 1 - -
Proceeds from sale of property, plant and equipment - - 8
Interest received 391 467 805
Net cash used in investing activities (1,046) (51,272) (52,638)
Cash flows from financing activities
Share issue 3 120 129
Purchase of shares held in trust - (3,676) (3,676)
Purchase of own shares for cancellation (2,828) - (2,186)
Interest paid (847) (291) (1,387)
Payments on property lease liabilities (476) (261) (668)
Proceeds from property lease receivables 80 - 33
Cash paid to refinance - (630) (1,040)
Proceeds from borrowings - 35,000 35,000
Repayments of borrowings (1,500) - (13,750)
Net cash (used in) / generated from financing activities (5,568) 30,262 12,455
(Decrease) in cash and cash equivalents in the period (13,916) (22,497) (14,490)
Cash and cash equivalents at beginning of year 51,814 64,663 64,663
Exchange (loss) / gain on cash and cash equivalents (696) 1,009 1,641
Cash and cash equivalents at end of period 37,202 43,175 51,814
*The purchase of acquisitions net of cash acquired was previously disclosed in
the H1 2023 Interim Statement as a single total of $49,982k based on estimated
acquisition figures at 30 June 2023. This has been restated to apportion
between each acquisition and includes an amendment of $22k in relation to the
VGS Companies acquired on 20 June 2023 on finalisation of the cash acquired,
aligning with the presentation of the Financial Statements for the year ended
31 December 2023.
Consolidated statement of changes in equity
for the six-month period ended 30 June 2024
Share capital Share premium Retained Merger reserve Own Translation reserve Capital Redemption reserve Contingently issuable shares *Restated Total
earnings
shares held
in trust
$000 $000 $000 $000 $000 $000 $000 $000 $000
Balance at 31 December 2023 603 153,948 31,196 19,641 (9,451) (2,446) 4 - 193,495
Comprehensive income for the period
Profit for period - - 215 - - - - - 215
Other comprehensive income - - - - - 394 - - 394
Total comprehensive income/(loss) for the period - - 215 - - 394 - - 609
Contributions by and distributions by owners
Issue of share capital 3 223 (1) - - - - - 225
Share-based payments - - 2,163 - - - - - 2,163
Re-purchase of shares for cancellation (5) - (2,828) - - - 5 - (2,828)
Settlement of share options through Employee Benefit Trust - - (1,471) - 1,471 - - - -
Contingent consideration settled in shares 1 - - - - - - - 1
Total contributions by and distributions by owners (1) 223 (2,137) - 1,471 - 5 - (439)
Balance at 30 June 2024 602 154,171 29,274 19,641 (7,980) (2,052) 9 - 193,665
Balance at 31 December 2022 597 153,621 22,887 19,641 (5,775) (5,584) - - 185,387
Comprehensive income for the period
Loss for period - - (625) - - - - - (625)
Other comprehensive income - - - - - 2,597 - - 2,597
Total comprehensive income/(loss) for the period - - (625) - - 2,597 - - 1,972
Contributions by and distributions by owners
Issue of share capital 1 120 - - - - - - 121
Share-based payments - - 1,059 - - - - - 1,059
Re-purchase of shares for cancellation - - - - (3,676) - - - (3,676)
Contingent share consideration* - - - - - - - -* -
Total contributions by and distributions by owners 1 120 1,059 - (3,676) - - - (2,496)
Balance at 30 June 2023 598 153,741 23,321 19,641 (9,451) (2,987) - - 184,863
*Contingently issuable shares of $1.0m have been reclassified to trade and
other payables as a current liability in the comparative period. These relate
to contingent consideration in
relation to the acquisition of Paradocs Solutions, Inc on 21 April 2023 and
were previously disclosed within equity.
Notes to the Interim Financial Information
1. Basis of preparation
accesso Technology Group plc (the "Group") is a company domiciled in
England. The background of preparation of this financial information is
consistent with the basis that will be adopted for the full year accounts. The
interim financial information has been prepared in accordance with the
recognition and measurement requirements of international accounting standards
in conformity with the requirements of the Companies Act 2006 that are used
for the annual financial statements.
The financial figures included in this half-yearly report are consistent with
AIM rules applicable to interim periods. The basis of preparation is
consistent with the audited financial statements, see note 2 for further
details. This half-yearly report does not contain sufficient information to
constitute an interim financial report as that term is defined in IAS 34.
There are no changes to significant accounting policies.
This interim financial information has neither been audited nor reviewed
pursuant to guidance issued by the FRC and the financial information contained
in this report does not constitute statutory accounts within the meaning of
Section 434 of the Companies Act 2006. The comparative figures for the
financial year ended 31 December 2023 are not the Company's statutory accounts
for that financial year. Those accounts have been reported on by the Company's
auditor and delivered to the registrar of companies. The report of the auditor
was (i) unqualified, (ii) did not include a reference to any matters to which
the auditor drew attention by way of emphasis without qualifying their report,
and (iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
1.1 Going concern
The directors, having reassessed the principal risks and uncertainties,
consider it appropriate to adopt the going concern basis of accounting in the
preparation of the Interim Financial Information.
In reaching this conclusion, the directors noted the Group's $19.75m drawings
on its $40.0m revolving credit facility and cash position of $44.2m as at 31
August 2024. The directors have three forecast scenarios, being a conservative
base case, a severe but plausible downside case and a plausible upside case
through to 31 December 2025. In all scenarios modelled, the Group maintains
sufficient funding headroom and is in compliance with its debt covenants
throughout the period of assessment. The Group is in the process of amending
the facility agreement with its banking provider to ensure that the guarantor
requirements continue to be met. The Group does not foresee any issues with
this amendment, and this does not impact the Directors' Going Concern
assessment.
Consequently, the directors are satisfied that the Group's forecasts take into
account reasonably possible changes in trading performance, including no
anticipated breach of covenants and the ability to satisfy its liabilities as
they fall due for a period of at least 12 months from the date of release of
these interim statements. Therefore, there are no material uncertainties over
going concern and the going concern basis of preparation continues to be
appropriate.
2. Accounting policies
The condensed consolidated interim financial information has been prepared
using accounting policies consistent with those set out on pages 70 to 76 in
the audited financial statements for the year ended 31 December 2023. These
accounting policies have been applied consistently to all periods presented in
this financial information.
The policy for recognising and measuring income taxes in the interim period is
described in Note 4.
3. Business segments and revenue analysis
Segmental analysis
The Group's operating segments under IFRS have been determined with reference
to the financial information presented to the Board of directors. The Board of
the Group is considered the Chief Operating Decision Maker ("CODM") as defined
within IFRS 8, as it sets the strategic goals for the Group and monitors its
operational performance against this strategy.
The Group's Ticketing and Distribution operating segment comprises the
following products:
· accesso Passport ticketing suite using our hosted proprietary technology
offering to maximise up-selling, cross-selling and selling greater volumes
· accesso Siriusware software solutions providing modules in ticketing &
admissions, memberships, reservations, resource scheduling, retail, food
service, gift cards, kiosks and eCommerce.
· The accesso ShoWare ticketing solution for box office, online, kiosk, mobile,
call centre and social media sales
· Ingresso operate a consolidated distribution platform which connects venues
and distributors, opening up a larger global channel for clients to sell their
event, theatre and attraction tickets.
· accesso Paradox cutting-edge software solution specifically tailored to the
unique needs of the industry. The flexible, hosted solution empowers ski areas
to take full control of their operations across ticketing and passes, snow
school, retail, equipment rental, food & beverage, administration, and
online sales in one, unified platform.
· accesso Horizon highly functional and best-in-class ticketing and visitor
management solution leveraging an innovative portfolio model approach to guest
management.
The Group's Guest Experience operating segment comprises the following
aggregated segments:
· accesso LoQueue providing leading edge virtual queuing solutions to take
customers out of line, improve guest experience and increase revenue for theme
parks
· Mobile Applications experience management platforms which delivers
personalised real-time immersive customer experiences at the right time,
elevating the guest's experience and loyalty to the brand.
· accesso Freedom recently launched point of sale system enabling modules in
food and beverage, retail, eCommerce via kiosk or mobile through a
multi-tenanted hosted solution.
The Group's virtual queuing solution (accesso LoQueue), experience management
platforms (Mobile Platforms), and food and beverage retail system (accesso
Freedom) are headed by segment managers who discuss the operating activities,
financial results, forecasts and plans of their respective segments with the
CODM. These three distinct operating segments share similar economic
characteristics, expected long term financial performance, customers and
markets; the products are heavily bespoke, technology and software intensive
in their delivery and are directly targeted at improving a guest's experience
of an attraction or entertainment venue, whilst providing cross-selling
opportunities and increased revenues to the venues. Management therefore
conclude that they meet the aggregation criteria.
Following structural changes within the Group, Professional Services has been
identified as a distinct operating segment. These revenues were previously
presented to the Board of directors within the Guest Experience segment.
The Professional Services operating segment comprises:
· Professional Services are the delivery of bespoke Professional Services to
large customers in the ski, theme park, and cruise ship markets. These
revenues are not provided in conjunction with one of our Products and are not
provided on our typical transactional or license models.
The Group's assets and liabilities are reviewed on a Group basis and therefore
segmental information is not provided for the statements of financial position
of the segments.
The CODM monitors the results of the operating segments prior to charges for
interest, depreciation, tax, amortisation, and non-recurring items, but after
the deduction of capitalised development costs. The Group has a significant
amount of central unallocated costs which are not segment specific. These
costs have therefore been excluded from segment profitability and presented as
a separate line below segment profit.
The following is an analysis of the Group's revenue and results from the
continuing operations by reportable segment which represents revenue generated
from external customers.
Six months ended 30 June 2024 Six months ended 30 June 2023 Year ended 31 December 2023
Unaudited Unaudited Unaudited
*Restated *Restated
$000 $000 $000
Ticketing 51,833 43,761 104,024
Guest Experience* 13,206 16,035 34,175
Professional Services* 4,155 5,987 11,316
Total revenue 69,194 65,783 149,515
*Comparatives for the periods ending 30 June 2023 and 31 December 2023 have
been restated to present Professional Services as a distinct segment following
structural changes within the Group. This revenue was previously included
within the Guest Experience segment.
Ticketing Guest Professional Services Central unallocated Capitalised development costs
Experience costs Group
Period ended 30 June 2024 - Unaudited $000 $000 $000 $000 $000 $000
Cash EBITDA (1) 40,697 9,847 2,250 (45,074) (1,238) 6,482
Capitalised development costs 1,238
Depreciation and amortisation (excluding acquired intangibles) (2,363)
Amortisation related to acquired intangibles (1,962)
Share-based payments (2,163)
Acquisition and integration related costs (24)
Finance income 273
Finance expense (1,184)
Profit before tax 297
Ticketing Guest Professional Services* Central unallocated Capitalised development costs
Experience* costs Group
Period ended 30 June 2023 - Unaudited $000 $000 $000 $000 $000 $000
Cash EBITDA (1) 35,112 10,429 2,873 (40,317) (1,616) 6,481
Capitalised development costs 1,616
Depreciation and amortisation (excluding acquired intangibles) (4,705)
Amortisation related to acquired intangibles (668)
Share-based payments (1,059)
Acquisition and integration related costs (2,466)
Finance income 447
Finance expense (509)
Profit before tax (863)
(1) Cash EBITDA: operating profit before the deduction of amortisation,
impairment of intangible assets, depreciation, acquisition and integration
related costs, and costs related to share-based payments less capitalised
development costs.
4. Taxation
The tax charge for the interim financial statements is determined by applying
the weighted average statutory tax rate based on full year forecast profits to
the actual profits for the first half of the year, and then adjusting for
non-taxable or deductible items that affect the profits of the first half of
the year.
The adjusted earnings per share (note 6) has been presented using an estimated
adjusted rate for the period, which has been adjusted to remove the effect of
amortisation related to acquired intangibles, share-based payment charges,
exceptional expenditure and any related tax effect on those items.
5. Reconciliation of alternative performance measure
Management present Cash EBITDA as its alternative performance measure below
because it monitors performance at a consolidated level and provides a better
understanding of the Group's underlying financial performance. The definition
of Cash EBITDA is the same as in the last annual financial statements.
Cash EBITDA is not a defined performance measure under IFRS. The Group's
definition may not be comparable with similarly titled performance measures
and disclosures by other entities.
Six months ended 30 June 2024 Six months ended 30 June 2023 Year ended 31 December 2023
Unaudited Unaudited Audited
Cash EBITDA $000 $000 $000
Operating profit 1,208 (801) 9,939
Add: Exceptional expenditure on acquisition & integration 24 2,466 2,690
Add: Amortisation related to acquired intangibles 1,962 668 2,811
Add: Share-based payments 2,163 1,059 3,187
Add: Impairment of intangibles - - 6
Add: Amortisation and depreciation (excluding acquired intangibles) 2,363 4,705 7,832
Capitalised internal development costs (1,238) (1,616) (2,939)
Cash EBITDA 6,482 6,481 23,626
6. Earnings per share ("EPS")
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the period.
Diluted earnings per share is calculated by dividing the profit attributable
to ordinary shareholders by the weighted average of ordinary shares
outstanding during the period adjusted for the effects of dilutive
instruments.
Adjusted basic earnings per share is calculated by dividing the profit
attributable to ordinary shareholders adjusted for exceptional expenditure on
the acquisition of intellectual property, amortisation and reversal of
impairment on acquired intangibles and share-based compensation by the
weighted average number of shares used in basic EPS. The denominator for
adjusted diluted earnings per share is the weighted average number of shares
used in diluted EPS.
Six months Six months Year
ended ended ended
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
$000 $000 $000
Profit / (Loss) attributable to ordinary shareholders 215 (625) 7,692
Basic EPS
Denominator
Weighted average number of shares used in basic EPS 40,628 41,400 40,075
Basic earnings per share - cents 0.53 (1.51) 19.19
Diluted EPS
Denominator
Weighted average number of shares used in basic EPS 40,628 41,400 40,075
Deferred share consideration on business combinations
Effect of dilutive securities
LTIP and Option awards (000s) 1,640 2,832 1,034
Contingent share consideration on business combinations (000s) 59 - 88
Weighted average number of shares used in diluted EPS 42,327 44,232 41,197
Diluted earnings per share - cents 0.51 (1.51) 18.67
The Group made a loss in the prior period presented and therefore the options
and equity settled deferred consideration are anti-dilutive. As a result,
basic and diluted earnings per share are presented on the same basis for the
period ended 30 June 2023.
Adjusted EPS
(Loss) / profit attributable to ordinary shareholders 215 (625) 7,692
Adjustments to profit for the period:
Exceptional expenditure on acquisitions and integrations 24 2,466 2,690
Amortisation relating to acquired intangibles 1,962 668 2,811
Impairment of intangible assets - - 6
Shared based payments 2,163 1,059 3,187
Adjusted profit 4,364 3,568 16,386
Net tax related to above adjustments: (H1 2024: 20.53%, H1 2023: 26.87%; FY (849) (464) (1,365)
2023 22.74%)
Adjusted profit attributable to ordinary shareholders 3,515 3,104 15,021
Adjusted basic EPS
Denominator
Weighted average number of shares used in basic EPS 40,628 41,400 40,075
Adjusted earnings per share - cents 8.65 7.50 37.48
Adjusted diluted EPS
Denominator
Weighted average number of shares used in diluted EPS 42,327 44,232 41,197
Adjusted earnings per share - cents 8.30 7.02 36.46
7. Business Combinations
In the comparative period, the Group completed 3 acquisitions to create
shareholder value by adding depth and breadth to the Group's software
solutions and available resources.
Goodwill acquired in the business combinations represent a payment made by the
acquirer in anticipation of future economic benefits from assets that are not
capable of being individually identified and separately recognised. Goodwill
is not deductible for tax purposes.
Acquisition of VGS companies (now accesso Horizon)
On 20 June 2023, the Group entered into a share purchase agreement to acquire
100% of the share capital of four VGS entities (VGS S.r.l., VGS ME DMCC, VGS
Asia PtE Ltd. and VGS Holding, Inc.), and an underlying subsidiary, for a
total consideration of $53.6m, paid in cash.
The principal reason for this acquisition was to expand the Group's product
proposition, significantly increase international presence, enhance revenue
diversity, and provide extensive new opportunities for global growth. It also
provides a fundamental building block for the Group's mid-to-long-term product
roadmap.
Fair value
$000
Identifiable intangible assets - acquired technology 5,111
Identifiable intangible assets - customer relationships 8,353
Property, plant and equipment 1,272
Cash 14,275
Receivables and other debtors 4,243
Payables and other liabilities (8,615)
Deferred tax liabilities (3,618)
Total net assets acquired 21,021
Goodwill on acquisition 32,577
Consideration 53,598
Satisfied by:
Cash to vendors 53,598
Acquisition of Paradocs Solutions, Inc. (now accesso Paradox)
On 21 April 2023, the Group acquired 100% of the share capital of Paradocs
Solutions, Inc ("Paradocs") for a total consideration of $10.01m, of which
$9.0m was paid in cash with a further $1.01m in contingently issuable
shares.
The principal reason for this acquisition was to deepen the Group's presence
in the important ski market by acquiring a cutting-edge software solution
specifically tailored to the unique needs of the industry. The flexible,
hosted solution empowers ski areas to take full control of their operations
across ticketing and passes, snow school, retail, equipment rental, food &
beverage, administration, and online sales in one, unified platform.
Fair value
$000
Identifiable intangible assets - customer relationships 550
Identifiable intangible assets - acquired technology 5,790
Property, plant and equipment 156
Cash 155
Receivables and other debtors 848
Payables and other liabilities (918)
Deferred tax liabilities (1,704)
Total net assets acquired 4,877
Goodwill on acquisition 5,130
Consideration 10,007
Satisfied by:
Cash to vendors 9,000
Contingent share consideration to vendors 1,007
Acquisition of Boxer Consulting Limited
On 4 May 2023, the Group acquired 100% of the share capital of Boxer
Consulting Limited ("DigiSoft") for a total consideration of €1.82m ($2.0m).
A total of €1.62m ($1.79m) was paid in cash with a further €0.2m held as
deferred consideration to be paid two years post-completion.
The principal reason for this acquisition was to enable the Group to gain
efficiency, flexibility, and reduce costs by bringing an existing supplier of
mobile development services in-house.
Fair value
$000
Identifiable intangible assets - acquired technology 462
Property, plant and equipment 4
Receivables and other debtors 25
Payables and other liabilities (85)
Deferred tax liabilities (124)
Total net assets acquired 282
Goodwill on acquisition 1,731
Consideration 2,013
Satisfied by:
Cash to vendors 1,792
Deferred cash consideration to vendors 221
The net cash outflow in the prior period in respect of acquisitions comprised:
$000
VGS
Cash paid 53,598
Net cash acquired (14,275)
39,323
Paradocs
Cash paid 9,000
Net cash acquired (155)
8,845
DigiSoft
Cash paid 1,792
Net cash acquired -
1,792
Total net cash outflow in respect of acquisitions in the prior period 49,960
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