REG - Accesso Technology - Interim results for period ended 30 June 2023
19/09/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230919:nRSS8396Ma&default-theme=true
RNS Number : 8396M Accesso Technology Group PLC 19 September 2023
19 September 2023
accesso® Technology Group plc
("accesso" or the "Group")
INTERIM RESULTS
for the six-month period ended 30 June 2023
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 2023 ('H1 2023').
Commenting on the results, Steve Brown, Chief Executive Officer of accesso,
said:
"Today we are reporting a solid set of first half results that keep us on
track for our full year expectations. As anticipated, demand has stabilised
following a period of accelerated growth, and after two years of temporarily
reduced overheads, improved hiring conditions mean we have been able to
successfully recruit for open positions. Having navigated our business through
the pandemic and capitalised on a generational shift in attitudes towards
technology in our sector, we are now deepening our focus on Accesso's
long-term future.
We've started this process with three outstanding acquisitions. In VGS,
rebranded as Accesso Horizon(SM), we have significantly expanded our global
ticketing footprint with arguably the most powerful ticketing platform in the
leisure sector. With Paradocs' MtnOS, now Accesso Paradox(SM), we have further
strengthened our position in the important ski market. With the addition of
our long-term staff augmentation partner, Digisoft(TM), we have expanded our
mobile app development and delivery capabilities.
We have also made high value improvements to our existing product set to
extend our leadership and expand our opportunities. We have started pre-sales
of Accesso Freedom(SM), our new restaurant and retail proposition, and we are
in the final stages of a major refresh across all modules of Accesso
Passport®. These initiatives further demonstrate our commitment to continuous
improvement for our customers and our focus on enabling future step-function
growth.
I am extremely proud of our team for continuing to deliver high quality
results alongside the effort to complete three acquisitions that further pave
the way for our future growth. Looking ahead, we anticipate our performance
for the full year 2023 to be in line with our expectations."
Six months ended Six months ended % change
30 June 2023 30 June 2022
Unaudited Unaudited
($000) ($000)
Group Revenue 65,783 63,732 3.2%
Ticketing and distribution 43,761 44,280 (1.2%)
Guest Experience 22,022 19,452 13.2%
Group Revenue - constant currency 4 66,602 63,732 4.5%
Gross Profit 48,326 47,032 2.8%
Gross Margin % 73.5% 73.8%
Cash EBITDA 1 6,481 10,644 (39.1%)
Statutory (loss) / profit before tax (839) 2,916 (128.8%)
Net cash 2 9,182 58,728 (84.4%)
Adjusted basic EPS (cents) 3 7.50 13.03 (42.4%)
Basic (loss) / earnings per share (cents) (1.51) 5.49 (127.5)%
Footnotes:
(1) Cash EBITDA: operating profit before the deduction of amortisation,
depreciation, acquisition & integration costs, deferred and contingent
consideration linked to continued employment, and costs related to share-based
payments less capitalised development costs paid in cash as per the
consolidated cash flow statement
(2) Net cash is calculated as cash and cash equivalents less borrowings.
(3) Adjusted basic earnings per share is calculated after adjusting operating
profit for impairment of intangible assets, amortisation on acquired
intangibles, deferred and contingent consideration linked to continued
employment, acquisition costs and share-based payments, net of tax at the
effective rate for the period on the taxable adjusted items (as detailed in
note 6)
(4) Revenue metrics for the period ended 30 June 2023 have been prepared on a
constant currency basis using rates from the period ended 30 June 2022 to
assist with assessing the underlying performance of the revenue streams.
Average monthly rates for H1 2022 were used to translate the monthly H1 2023
results into a constant currency using the range of currencies as set out
below:
a. a. GBP sterling - $1.23 - $1.36
b. b. Euro - $1.06 - $1.13
c. c. Canadian dollars - $0.78- $0.79
d. d. Australian dollar - $0.70-$0.74
e. e. Mexican pesos - $0.05 - $0.05
f. f. Brazilian real - $0.18 - $0.21
First half highlights
· Solid performance in H1 2023: As visitor demand stabilised,
revenue increased 3.2% to $65.8m (H1 2022: $63.7m) compared to H1 2022. This
growth was delivered with a 14.3% revenue increase in accesso LoQueue® as
well as 15.1% growth in our assigned seating product, accesso ShoWare(SM),
across both North and South American markets. These growth areas were offset
by the ongoing impact of lower than expected revenues from a key customer
which continues to reposition its business as well as an increasingly
competitive UK distribution market.
· H1 2023 Cash EBITDA in line with expectations: $6.5m reflects the
expected increase in overheads as we were able to staff open positions and
continued to invest in long term growth opportunities, including the
completion of the core elements of the accesso Freedom platform.
· Three acquisitions to kickstart strategic evolution: The Group
executed the acquisitions of VGS, Paradocs Mountain Software and Digisoft
during the period. In acquiring VGS, a leading ticketing and visitor
management system for major operators around the globe, the Group has
substantially expanded its geographic footprint. With the acquisition of
Paradocs Mountain Software, the Group has significantly deepened its presence
in the strategically important ski market. Digisoft has allowed the Group to
in-house an important part of its development and professional services
related to mobile solutions. These acquisitions all meet the Group's stated
M&A criteria of enhancing products, furthering diversification, expanding
global growth opportunities, and increasing earnings in the first year of
ownership.
· Key customer wins across our product set: accesso signed sixteen
new venues across a broad range of target verticals during the period,
including attractions, live entertainment, water parks, zoos and aquariums,
and theme parks. The Group signed five ski resorts including the first accesso
Paradox customer post-acquisition, along with three further wins post period
end. The Group's ability to serve a broad range of ski customers' needs was
further evidenced by strong cross selling with two existing ski resort clients
signed to accesso Passport eCommerce during the period.
· Continued innovation to extend product leadership: Following the
acquisition of the food, beverage, and retail intellectual property in July
2022, the Group has now initiated pre-launch sales of the accesso Freedom
platform. Based on a product with more than twenty years of enterprise-level
success, accesso Freedom delivers a modern, fully hosted offering for the
restaurant and retail market, optimised for speed, flexibility and
ease-of-use. The Group has also completed a major refresh of its leading
accesso Passport suite, with significant updates across all major product
components including eCommerce, point-of-sale, guest support and payments. The
updated product suite has been debuted on a rolling basis with the remaining
updates to be implemented in H2.
Outlook & Guidance
· Market backdrop: demand in the Group's end markets has stabilised
following an uptick in post-pandemic demand. While this means somewhat slower
growth across the board than was present in 2022, the Group's trading has
remained in line with market expectations highlighting the value in the
diversity of its business across solutions, sectors, and geographies. Early in
H1 some key venues dealt with unusual weather conditions that impacted demand,
but more broadly across the period, operators calibrated marketing messages
and pricing to optimise results. Along with those efforts, visitor footfall
has increased in H2.
· Operational footprint and costs: the Group benefitted from low
costs during the pandemic whilst operations were reduced and market conditions
made it more difficult to hire for open positions across 2021 and into 2022.
With improved hiring conditions and expanded staffing from acquisitions during
the period, underlying administrative expenses increased by 13.9%
year-on-year. While investing for growth, the Group remains focused on
improved operating efficiency and reaching a sustained Cash EBITDA margin of
no less than 20% in the medium term. This process is supported by the Group's
recent acquisitions, including VGS which both opens significant new global
sales opportunities and adds an important pathway in our longer-term product
roadmap.
· Full year guidance: With stable demand, an increased cost base
and significant progress made against our strategy, the Group expects another
profitable and cash-generative year in line with current expectations.
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@dentonsglobaladvisors.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
Fern MacDonald, Chief Financial Officer
Numis Securities Limited (Nominated Adviser and Sole +44 (0)20 7260 1000
Broker)
Simon Willis, Hugo Rubinstein
Dentons Global Advisors (Financial Public Relations) +44 (0)20 7038 7419
Adam Davidson, Leah Dudley, Corbin Ellington
About accesso Technology Group plc
accesso is the leading global provider of patented and award-winning
technology solutions that redefine the guest experience, drive increased
revenue, streamline operations, and support data-driven business decisions for
leisure & entertainment operators. Currently serving over 1,000 venues
worldwide, accesso invests heavily in research and development to provide
venues with technology that empowers them to deliver unforgettable guest
experiences. Staffed by a team of attractions, cultural venue and ski industry
veterans, accesso partners with venues to increase their range of on- and
off-site guest engagement to drive increased revenue through intuitive
ticketing, point-of-sale, virtual queuing, distribution, and experience
management technology.
accesso is a public company, listed on AIM: a market operated by the London
Stock Exchange. Learn more at accesso (http://www.accesso/) .com
(http://www.accesso/) or follow accesso on LinkedIn
(https://www.linkedin.com/company/1357674/admin/feed/posts/) , Facebook
(https://www.facebook.com/accessoTechnologyGroup/) and X (Twitter)
(https://twitter.com/accessotech) .
***
Chief Executive's Review
Solid first half performance alongside completion of three strategic
acquisitions
In the first half of 2023 we continued to position the business to meet our
customers' evolving needs, delivering solid financial results in line with our
expectations. Alongside high-quality operational performance, we have taken
decisive action to enable our long-term growth and profitability with the
completion of three strategic acquisitions that squarely deliver on our
established M&A criteria.
The priority in our recent past has been to navigate the challenges of the
pandemic and capitalise on a significant shift in customer attitudes towards
technology adoption. We have been focused on building financial and
operational resilience, aligning our whole organisation behind a more
customer-focused and efficient strategy. As a team, we have developed a robust
growth platform. Now, we are fully focused on helping our customers drive
revenue in more innovative ways than ever before.
Our path forward was defined through a product and market review we conducted
in 2022, which allowed us to start 2023 with a clear view of our future
product needs, sector priorities, and market expansion potential. With these
in mind, we assessed our organic R&D efforts and determined where M&A
would more quickly and efficiently meet our needs.
With our priorities well defined and a significant cash balance in hand, we
moved to acquire three high quality businesses - VGS, Paradocs Mountain
Software and Digisoft - that are immediately additive to our strategic
development. Together, they enhance our product set, increase revenue and
geographic diversification, and boost our financial prospects.
The acquisitions completed in H1 are transformational. VGS expands our
geographic reach into a range of new regions including Dubai, Egypt,
Singapore, China and Vietnam. It also makes us a technology provider to the
world's largest theme park destination located in Orlando. The accesso Paradox
solution significantly expands our presence in ski, bringing 48 Canadian and 2
US resorts to our stable. This brings our total ski customer base to 157. In
bringing our long-term partner Digisoft into the Group, we have immediately
expanded our bench of highly skilled mobile developers. This will allow us to
meet the growing needs for mobile solutions much more efficiently, which is an
increasingly important delivery mechanism for the sale of tickets, virtual
queueing, and food ordering. As we move through 2023, our position in the
marketplace as the leading technology provider has never been stronger.
Financial performance
Our first half financial performance is in line with our expectations at this
point in the year. Our revenue growth of 3.2% reflects the stabilising demand
experienced in H1 and is a solid showing given the lower revenue contribution
from a major US customer we flagged in our full year report in April.
Cash EBITDA of $6.5m (H1 2022: $10.6m) was affected by an increase of 13.9% in
underlying administrative expenses primarily related to increased staffing
costs including the continued investment to complete the accesso Freedom
solution. We are broadly comfortable with the shape of our business now and we
expect Cash EBITDA growth to accelerate from here as revenue increases and we
see more of the efficiency gains from operational leverage as our business
grows.
Total Gross Profit increased slightly to $48.3m (H1 2022: $47.0m), again
reflecting the stabilising of demand levels in the market, and was a good
performance against a strong comparator. The loss before tax of -$0.84m for H1
2023 (H1 2022: profit of $2.92m) includes the impact of $2.5m acquisition and
integration costs incurred in the period. Following the progress made against
our strategy during the period, we are well positioned within the market, with
new opportunities to execute against.
New business success
The quality of our products and the value they bring to our customers
continued to be recognised during the period. We won 16 new venues during the
period, of which 5 were in the increasingly important ski industry. Among
these new ski customers was the first accesso Paradox customer since the
acquisition - with a further three signed post period end. Within accesso
Paradox, the resonance of cloud-based solutions was clear with more customers
choosing cloud deployments rather than on-premises deployments over the first
half. We also continue to drive strong cross-selling activity within the ski
space, with 2 further ski clients signing to accesso Passport eCommerce during
the period.
The combined value of our technology was further demonstrated in the growing
number of combination clients which take more than one accesso product across
our business more broadly. In total we saw 7 combination implementations
during the period, including 3 new customers to accesso such as Lagoonfest
Texas and Wildwater Cullman, bringing the total number of combination clients
to 104.
Live events also continued to form an important part of our new business
success in the first half, with record ticket and package sales within accesso
ShoWare. We also saw new accesso ShoWare clients going live across the US,
Canada, Mexico, Peru, Venezuela, and Costa Rica. The channel shift from
in-person point-of-sale (PoS) to eCommerce continues to play a key role in the
success of accesso ShoWare, with a growing trend in total eCommerce tickets
compared to 2022. Similarly, the importance of mobile solutions remains an
important success factor for accesso Passport, as the percentage of eCommerce
tickets sold in North America through mobile increased to 62% (H1 2022:
58%).
Acquisitions to further accesso's strategic development
Acquisition criteria
We are excited about the additions we have made to our business and product
set during the period. When we embarked on executing our strategy to evolve
our business for the future, we set out clear acquisition criteria to guide
us. These criteria form the central part of our target selection process; no
target will be taken forward without meeting all of them. They are:
· Enhance our product.
· Increase geographic and end market diversification.
· Broaden growth opportunities.
· Boost our earnings within the first year.
The three acquisitions we made during the period have fallen squarely within
these strategic priorities.
VGS
We announced our transformative acquisition of VGS in June 2023. VGS is a
leading ticketing and visitor management system provider for leisure,
entertainment, and cultural businesses around the globe, and has supported
renowned visitor attractions in all aspects of selling, distributing, and
redeeming tickets since 2011. It brings an exciting client base of over 100
venues, including the world's largest theme park resort destination in
Orlando, Florida, as well as leading theme park brands in Dubai, Singapore,
Japan and China, and other visitor attractions around the world.
Beyond its top-tier client base, VGS's expansive feature set, globalised
functionality and robust scaling capabilities provide a modernised and truly
international architecture. It can be hosted either on-premises or in the
cloud and offers customers an open API to enable direct integration with other
systems. It is also truly exciting from a cross-selling perspective, giving us
access to a substantial new client base of major operators across the globe.
Initial customer conversations and feedback have been extremely positive, and
while we are in the early phases of rebranding VGS as accesso Horizon, we are
excited at the opportunity it presents us and our customers.
Paradocs Mountain Software
Our acquisition of Paradocs Mountain Software (Paradocs) was announced in
April 2023. Paradocs is a leading Canadian-based provider of cutting-edge
software solutions specifically for the ski industry and was established in
2001.
Our businesses shared an important understanding - that the ski industry needs
a holistic and integrated approach to its operations to truly optimise both
the operations themselves and, more importantly, the guest experience. The
flexible, integrated solution empowers ski resorts to take full control of
their operations across ticketing and passes, snow school, retail and
equipment rental, food & beverage, administration, and online sales.
With a strong and established position in the ski sector with accesso
Siriusware(SM), bringing the hosted, all-in-one mountain management solution,
Paradocs' MtnOS, under the accesso umbrella as accesso Paradox was a powerful
step forward in addressing the evolving needs of the dynamic ski market. As
part of the larger accesso product set that serves this market, we are excited
about the opportunities ahead, and with our first post-acquisition accesso
Paradox customer on board, and more signed post period end, we are already
seeing those opportunities come through. This has been echoed in the highly
positive customer feedback we have received.
Digisoft
In May 2023 we acquired Digisoft, a Cork, Ireland-based technology business
for $2m. We have been working closely with Digisoft since before the
acquisition of TE2, primarily around augmenting our mobile development
initiatives. In the financial year 2022 we accounted for roughly 70% of
Digisoft's revenue, and, as its primary client, both parties benefit
substantially from the combination. Digisoft's 20 people gain the clarity and
opportunity afforded by integrating fully into the accesso team, and our Group
gains immediate bench strength, efficiency, flexibility, and reduced cost by
bringing this outstanding team in-house.
Product innovation to extend technology leadership
Alongside acquisitions, organic product development remains a vital component
of our commitment to customers. During the period we made significant steps in
extending our product leadership position by continuing to invest in our
technology.
We are in the final stages of development for the accesso Freedom platform,
building on the intellectual property acquired in July 2022 in the
point-of-sale (PoS) platform, and optimising it for speed, flexibility, and
ease of use. Fast, frictionless, highly flexible and instantly scalable,
accesso Freedom introduces a new standard of excellence in cloud-native
restaurant and retail solutions for theme parks and attractions, ski areas,
cultural venues, resorts, and casinos.
We have also implemented significant upgrades within our leading accesso
Passport offering. As a core part of our business, and an important tool for
our customers that spans multiple areas of the guest experience - including
eCommerce, PoS, guest support and payments - it is critical that accesso
Passport remains a modern and innovative solution as the needs of customers
and their visitors evolve. The program includes updates across all major
product components with many of those already live and others continuing to
become available across H2.
People and culture
Our accesso staff continue to commit to innovative-thinking and
customer-focused service. Our people are proud to unite behind the changes
we've made together and are motivated to keep building a strong culture.
We onboarded 50 new hires during the period and turnover as of 30 June 2023
was at 4.8% - trending significantly lower than the previous year. In our
8(th) annual employee survey, 92% of our employees took the time to provide
valuable feedback that we can take action on to make improvements. Our average
business score was of 4.2 out of 5. To put this in context, this puts us in
the top quarter of similarly sized companies in our industry.
We continued our focus on inclusivity, diversity, and wellbeing, and the
strength of our DEI Council grew, with 9 new members taking on
responsibilities across the business. For current employees, we implemented a
subscription for all employees to the Calm app, giving each of them - and up
to five of their dependents - unlimited access to content for improved sleep,
wellbeing, and meditation. For prospective employees, we introduced a
recruiting platform that allows us to provide better support to candidates
with disabilities.
We are proud of the way our teams are working together, delivering results,
and welcoming new members to the accesso family - whether that's through new
hires or those joining us through acquisitions. We thank them all for their
unwavering commitment to our customers and our people, and for making accesso
a rewarding place to work.
Outlook
We are pleased with our performance in the first half of 2023. Demand across
our end markets stabilised following the uptick in the post-pandemic era.
While this has meant somewhat lower year-on-year growth for some products than
we saw in 2022, our customers have been successful in innovating to support
demand levels.
As mentioned, with open positions being filled, the continued development of
accesso Freedom and acquisitions incurred during the period, underlying
administrative expenses increased 13.5% year-on-year, but step-function
changes across the business during the period are expected to significantly
improve long-term earnings potential.
With stable demand, a more normalised cost base and significant progress made
against our strategy, the Group expects another profitable and cash generative
year in line with current expectations.
Financial Review
Commenting on the results, Fern MacDonald, Chief Financial Officer of accesso,
said:
"During the first half we delivered solid performance in revenue and completed
three high-quality acquisitions which significantly broaden our product range
and geographical reach. Profit and cash EBITDA metrics have been challenging
to maintain at H1 2022 levels given accelerated investment in our products as
we filled open software development positions over the past 12 months, as well
as a high inflation environment in global markets and acquisition costs. We
move into the second half with optimism about our existing and newly acquired
businesses. We will continue to integrate and drive synergies and value from
the excellent technologies, people, and expanding markets we have within our
enlarged group. We maintain an exceptionally strong balance sheet with low
levels of gearing and have no doubt we will continue to capitalise on the
exciting market opportunity ahead of us."
Financial overview
In the first half of 2023, the Group delivered solid performance in revenue
with our segments combining to achieve a 3.2% increase on H1 2022. Our
profitability metrics were impacted by the increase in staffing levels, high
level of wage inflation in our key markets, acquisition and integration costs,
and investment in acquired teams ahead of leveraging the new technologies
which we expect to drive value in H2 2023 and beyond.
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 award arrangement, necessitate
adjustments to statutory metrics to remove certain items which the Board does
not believe are reflective of the underlying business. These adjustments may
include acquisition and integration related expenses, amortisation related to
acquired intangibles, deferred and contingent consideration linked to
continued employment, share-based payments, and impairments.
By consistently making these adjustments, the Group provides a better
period-to-period comparison and is more readily comparable with 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
& integration costs, and costs related to share-based payments and paid
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 expenses 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 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;
· 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 each year 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 2023 was $65.8m (H1 2022: $63.7m) being
3.2% up on H1 2022.
Ticketing and Distribution revenue was 1.2% down on H1 2022 with UK based
Distribution reducing by 16.6%. The UK's retail ticket market has become
extremely competitive and certain venues have opted to sell more direct to the
consumer, reducing commissionable ticket inventory through distributors. While
UK based distribution revenue is down in H1 2023, we have recently acquired
new customers which should enable this reduction in revenue to be partially
mitigated in H2 2023. Offsetting this reduction was 15.1% growth in our
Northern, Central and South American live entertainment markets with 14 new
accesso ShoWare venues onboarded during the period and a full period
uninterrupted by COVID-19 related closures.
Guest Experience delivered revenue growth of 13.2% on H1 2022. accesso
LoQueue's transactional-based queuing products delivered excellent performance
with 14.3% growth on H1 2022 as the segment continues to diversify its
customer base and become less reliant on specific customer performance. The
segment also benefitted from $0.6m of hardware revenue of accesso Prism(SM)
Bands which are being used in the delivery of its transactional revenues to a
large blue-chip customer. The Experience Engine(TM) (TE2) business performed
ahead of budget in the delivery of bespoke professional service offerings to
large customers in the ski, theme park, and cruise ship markets, however it
was 6.0% behind the period reported in H1 2022. The Group agreed a longer-term
professional service contract with a large cruise operator in exchange for
reduced pricing to provide greater certainty over revenue.
This revenue performance enabled the Group to record a gross profit increase
of 2.8% to $48.3m delivered at a 73.5% gross margin, comparable to H1 2022's
73.8%.
Revenue on a segmental basis was as follows:
Six months ended 30 June 2023 Six months ended 30 June 2022
Unaudited Unaudited
$000 $000 %
Ticketing and Distribution 43,761 44,280 (1.2%)
Guest Experience 22,022 19,452 13.2%
Total revenue 65,783 63,732 3.2%
Revenue on a geographical basis was as follows:
Six months ended 30 June 2023 Six months ended 30 June 2022
Unaudited Unaudited
$000 $000 %
USA and Canada 46,032 43,865 4.9%
United Kingdom 11,550 13,167 (12.3%)
Australia/South Pacific 3,374 2,800 20.5%
Europe 2,796 2,237 25.0%
Central and South America 2,031 1,663 22.1%
Total revenue 65,783 63,732 3.2%
Our USA and Canadian business delivered a 4.9% revenue improvement with growth
across our accesso ShoWare and accesso LoQueue products in these regions; our
North American accesso ShoWare product delivered 11.5% increased ticket
volumes period on period.
As noted above, the primary reason for the 12.3% decline in UK revenues was
the performance of the Distribution business with venues and distributors
shifting more of the available inventory in-house.
Australia and South Pacific started 2023 with excellent volumes delivering
20.5% growth in revenue in the first half. The region saw excellent
performance from accesso LoQueue and accesso Passport with attendance and
ticket volumes significantly improved.
Similarly, our European revenues benefitted from new customers onboarded
toward the end of 2022 helping the region deliver $2.8m in revenues, a 25%
improvement on H1 2022.
Our Central and South American region felt the residual effects of
COVID-19-induced disruption during H1 2022 however H1 2023 was a period of
largely uninterrupted trade, performing extremely well in live entertainment
and delivering volumes in excess of our expectations.
Revenue quality
Below 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. This revenue has historically also
included the reimbursement of costs incurred by the Group for the operation of
virtual queuing solutions across venues for a key customer. These costs are
largely comprised of seasonal staff salaries and related expenses as well as
minor maintenance, repair, and marketing costs. The contractual arrangement
with this customer was revised at the end of June, such that accesso will be
transitioning from being responsible for providing seasonal staff and
consequently will no longer incur the related expenditure nor receive the
reimbursement.
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 84.0% is 1.9% ahead of the 82.1%
achieved in H1 2022 but remains in line with historic performance (2022:
83.1%, 2021: 84.4%).
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's transactional revenue streams delivered solid performance during
H1 2023 of $50.2m, up 6.2% on H1 2022. The Group's Virtual Queuing's products
performed particularly well as venue attendance grew by 14.3% compared to H1
2022 despite the continued challenges associated with a major customer's
change in admission strategy. Ticketing and eCommerce delivered steady growth
of 3.9% despite the difficulty experienced in the UK market with distribution
revenues.
Maintenance and support revenue reduced 4.7% to $3.5m as the planned shift
towards hosted products and transactional based agreements continues. This
product line continues to demonstrate resilience with some customers
preferring the comfort and security provided by fixed term agreements for
support services on earlier generations.
Professional services revenue performed significantly ahead of our
expectations in H1 2022 owing to several large bespoke solutions for the ski,
cruise, and attractions markets, this did not recur at the same levels in H1
2023. Furthermore, the Group agreed a two-year professional services contract
with a cruise operator in exchange for reduced pricing to provide better
visibility into future revenues. Our platform revenues continue to benefit
from this bespoke development work whereby professional service customers have
taken up repeatable platform fees for hosting food and beverage mobile apps.
Platform revenues grew 10.9% to $1.7m.
Six months ended 30 June 2023 Six months ended 30 June 2022
Unaudited Unaudited
$000 $000 %
Virtual queuing 10,386 9,090 14.3%
Virtual queuing seasonal staffing cost reimbursement 2,811 2,533 11.0%
Ticketing and eCommerce 36,968 35,594 3.9%
Reservation fees - 12 (100.0%)
Transactional revenue 50,165 47,229 6.2%
Maintenance and support 3,454 3,623 (4.7%)
Platform fees 1,655 1,492 10.9%
Total Repeatable 55,274 52,344 5.6%
Licence revenue 1,182 1,127 4.9%
Professional services 7,044 8,249 (14.6%)
Non-repeatable revenue 8,226 9,376 (12.3%)
Hardware 1,245 724 72.0%
Other 1,039 1,288 (19.3%)
Other revenue 2,284 2,012 13.5%
Total revenue 65,784 63,732 3.2%
Total Repeatable as % of total 84.0% 82.1%
Administrative expenses
Reported administrative expenses increased 12.3% to $49.1m in the period (H1
2022: $43.8m) and underlying administrative expenditure increased by 13.9% to
$42.0m. Both metrics were impacted by inflationary pressures in the Group's
key operating markets driving up salary costs and headcount growth. The
Group's headcount has increased from 576 in June 2022 to 711 in June 2023
(excluding seasonal staff) as the Group continued to invest heavily in its
product offering. Two key elements driving this being the product development
of accesso Freedom, which the Group hopes to monetise over the coming year,
and the three acquisitions which resulted in a headcount increase of 90 during
Q2 2023.
During 2022 the Group continued to take action to rationalise its property
leases following the move to a hybrid and remote work environment. Two-thirds
of the space leased in Lake Mary, Orlando was exited in August 2022 enabling a
saving of $0.3m in property lease payments in H1 2023 compared to H1 2022. The
remainder of the space was exited post period end.
$5.3k of government assistance has been received in Canada during H1 2023.
Six months ended 30 June 2023 Six months ended 30 June 2022
Unaudited Unaudited
$000 $000
Administrative expenses as reported 49,127 43,756
Capitalised development expenditure (1) 1,616 796
Amortisation related to acquired intangibles (668) (1,114)
Share-based payments (1,059) (1,227)
Amortisation and depreciation (2) (4,706) (5,527)
Property lease payments not in administrative expense 262 587
Exceptional expenditure on acquisition & integration of subsidiaries and (2,466) (296)
intellectual property
Underlying administrative expenditure 42,106 36,975
(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. While this is a 39.1%
reduction on the record H1 2022 result, it is in line with our expectations
for 2023. The Group delivered revenue growth of 3.2% offset by an increase in
payroll costs which is the principal reason for the reduction in cash EBITDA.
As a group we continue to invest heavily in our products as demonstrated by
our total development expenditure which is 23.0% higher than H1 2022. Our
accesso Freedom product is a good example of this investment where, after
acquiring the intellectual property assets in Q3 of 2022, we hired 27
development and product staff to continue the advancement of the food and
beverage platform. In addition, we added 90 staff from the three acquisitions
at staggered points through H1 2023; both group-wide and acquired salary
levels have increased with high wage inflation in our principal markets.
The table below sets out a reconciliation between statutory operating profit
and cash EBITDA:
Six months ended 30 June 2023 Six months ended 30 June 2022
Unaudited Unaudited
$000 $000
Operating (loss) / profit (801) 3,276
Add: Exceptional expenditure on acquisition & integration related costs 2,466 296
Add: Amortisation related to acquired intangibles 668 1,114
Add: Share-based payments 1,059 1,227
Add: Amortisation and depreciation (excluding acquired intangibles) 4,705 5,527
Less: Capitalised internal development costs paid in cash (1,616) (796)
Cash EBITDA 6,481 10,644
The Group recorded an operating loss of $0.8m in H1 2023 (H1 2022: $3.3m); and
adjusted earnings per share in the first half of 2023 of 7.50 cents (H1 2022:
13.03 cents).
Development expenditure
Six months ended 30 June 2023 Six months ended 30 June 2022*
Unaudited Unaudited
Total development expenditure 21,738 17,675
% of total revenue 33.0% 27.7%
*The comparative figure for the six months to 30 June 2022 has been restated
following a review of the cost classifications included in that period. The
figures previously presented for the six months to June 2022 were $13,277k,
being 20.8% of revenue.
H1 2023 has been another excellent period of innovation for accesso, with
frontline and technical teams working at pace to deliver solutions to enable
our customers to manage capacities, capture the uptick in demand for
technology-based solutions to ticketing, eCommerce, distribution, queuing, and
food and beverage purchasing. Our total development expenditure for H1 2023
increased to $21.7m, 23.0% higher than H1 2022, driven by the investment in
accesso Freedom not present in the comparative period as well as overall
increase in staff costs as previously discussed.
Development expenditure represents all expenses incurred by the Group's
Engineering and Product Management functions, predominantly comprising payroll
and software related costs. These functions maintain our existing solutions
and work with our customers to ensure the Group's products are well supported
and positioned to meet customer needs. In addition, these functions also
perform research and development activities based on the product roadmaps
which set out the planned features and releases over time.
The Group capitalises elements of development expenditure where it is
appropriate and in accordance with IAS 38 Intangible Assets. Capitalised
development expenditure of $1.6m (H1 2022: $0.8m) represents 7.4% (H1 2022:
4.5%) of total development expenditure. The Group's research and development
is primarily focused on improving existing customer products, which in turn
leads to increased customer satisfaction and retention, rather than 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 $9.2m from $64.6m at 31
December 2022. This is due to a number of factors but, by far, the greatest is
due to the net cash outflow on the Group's acquisitions of Digisoft, Paradocs
Mountain Software and VGS of $50.0m as we advanced with our medium-term
strategy of accelerated growth through acquisition.
30 June 2023 31 December 2022
$000 $000
Cash in hand & at bank 43,175 64,663
Borrowings (33,993) -
Net cash 9,182 64,663
The Group delivered operating cashflow before movements in working capital of
$6.3m (H1 2022: $11.5m). This includes $2.5m of acquisition and integration
costs incurred in connection with the three acquisitions and a higher level of
underlying administrative expense due to the headcount and inflationary
increases identified above.
In January 2023, the Group funded the purchase of 374,971 shares for a
consideration of $3.7m on behalf of the accesso Technology Group Employee
Benefit Trust. The shares are held by the Trustees and will be used to satisfy
awards granted under the Company's employee share plans that are expected to
vest in future years.
On 26 May 2023, the Group secured a $40 million revolving credit facility with
a four-year term, to May 2027, accompanied by a $20 million accordion option.
As at 30 June 2023 the group had drawn $35.0m ($34.0m net of finance costs)
which was used to partially fund the three acquisitions made by the Group.
The HSBC facility replaces the Group's undrawn £18 million arrangement with
Investec from 19 March 2021, which was due to expire in March 2024. This
Investec facility has now been cancelled.
Dividend
The Board maintains its consistent view that the payment of a dividend is
unlikely in the short to medium term.
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 2023 which would materially impact the
recoverable amount for each CGU.
Acquisitions
During the period, the Group completed three strategic acquisitions, VGS,
Paradocs Mountain Software, and Digisoft. In acquiring VGS for $53.6m, a
leading ticketing and visitor management system for major operators around the
globe, the Group has substantially expanded its geographic footprint. In
acquiring Paradocs Mountain Software for $10m, the Group has significantly
enhanced its presence in the important North American Ski market. In acquiring
Digisoft for $2.0m, the Group has in-housed an important part of its
operation, increasing efficiency and flexibility.
The net cash outflow after taking account of acquired cash balances of $14.4m
was $50.0m
Due to the proximity of the acquisitions to the period end, the fair value of
the acquired intangibles and underlying balance sheets is incomplete with
provisional figures included in the Consolidated Statement of Financial
Position at 30 June 2023. This allocation exercise will be updated in the
year-end financial statements.
Taxation
The effective tax rate (being the tax rate on adjusted profit before income
tax) for the period was 27.6% (2022 H1: 24.6%). The increase in effective tax
rate for the Group is attributable to an increase in non-deductible expenses
primarily comprising acquisition-related costs. 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 2023
30 June 2023 Unaudited 30 June 2022 Unaudited 31 December 2022
Audited
Notes $000 $000 $000
Revenue 65,783 63,732 139,730
Cost of sales (17,457) (16,700) (35,770)
Gross profit 48,326 47,032 103,960
(49,127) (43,756) (91,209)
Administrative expenses
Operating profit before exceptional items 1,665 3,276 12,783
Impairment of intangible assets - - (32)
Acquisition and integration related costs (2,466) - -
Operating (loss) / profit (801) 3,276 12,751
Finance expense (509) (416) (566)
Finance income 447 56 232
(Loss) / profit before tax (863) 2,916 12,417
Income tax benefit / (charge) 4 238 (649) (2,361)
(Loss) / profit for the period (625) 2,267 10,056
Other comprehensive income / (loss)
Items that will be reclassified to income statement
Exchange differences on translating foreign operations 2,597 (4,917) (5,283)
2,597 (4,917) (5,283)
Total comprehensive income / (loss) 1,972 (2,650) 4,773
All loss and comprehensive loss is attributable to the owners of the parent
(Loss) / earnings per share expressed in cents per share:
Basic 6 (1.51) 5.49 24.41
Diluted 6 (1.51) 5.27 23.45
All activities of the company are classified as continuing.
Consolidated statement of financial position as at 30 June 2023
30 June 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
$000 $000 $000
Assets
Non-current assets
Intangible assets 164,523 113,054 110,420
Property, plant and equipment 1,430 1,916 1,603
Right of use assets 2,024 2,520 980
Contract assets 251 292 314
Deferred tax 15,479 15,415 15,279
183,707 133,197 128,596
Current assets
Inventories 576 424 499
Contract assets 4,944 5,692 3,694
Trade and other receivables 26,138 22,541 28,785
Income tax receivable 3,830 1,237 1,864
Cash and cash equivalents 43,175 58,728 64,663
78,663 88,622 99,505
Liabilities
Current liabilities
Trade and other payables 24,401 26,659 32,090
Lease liabilities 689 1,011 451
Contract liabilities 5,670 5,040 4,920
Corporation tax payable 386 947 574
31,146 33,657 38,035
Net current assets 47,517 54,965 61,470
Non-current liabilities
Deferred tax 9,712 3,662 3,294
Contract liabilities 138 1,001 616
Lease liabilities 1,518 2,115 769
Borrowings 33,993 - -
45,361 6,778 4,679
Total liabilities 76,507 40,435 42,714
Net assets 185,863 181,384 185,387
Shareholders' equity
Called up share capital 598 597 597
Share premium 153,741 153,547 153,621
Retained earnings 23,321 12,817 22,887
Merger reserve 19,641 19,641 19,641
Translation reserve (2,987) (5,218) (5,584)
Own shares held in trust (9,451) - (5,775)
Contingently issuable shares 1,000 - -
Total shareholders' equity 185,863 181,384 185,387
Consolidated statement of cash flows
for the six-month period ended 30 June 2023
30 June 2023 30 June 2022 Unaudited 31 December 2022 Audited
Unaudited
$000 $000 $000
Cash flows from operations
(Loss) / profit for the period (625) 2,267 10,056
Adjustments for:
Depreciation (excluding finance leased assets) 495 664 1,227
Depreciation on leased assets 187 450 773
Amortisation on acquired intangibles 668 1,114 1,667
Amortisation on development costs and other intangibles 4,024 4,413 8,744
Impairment of intangible assets - - 32
Loss / (gain) on disposal of fixed assets 103 (31) 135
Share-based payments 1,059 1,227 2,629
Movement on bad debt provision (112) - 15
Finance expense 509 416 566
Finance income (447) (56) (232)
Foreign exchange loss / (gain) 673 385 (31)
Income tax (credit) / charge (238) 649 2,361
RDEC tax credits - - (141)
Operating cashflow before movement in working capital 6,296 11,498 27,801
(Increase) in inventories (77) (143) (231)
Decrease / (increase) in trade and other receivables 5,762 (4,809) (10,482)
(Increase) / decrease in contract assets/contract labilities (2,247) (5,016) 435
(Decrease) in trade and other payables (9,819) (2,312) (797)
Cash (used in) / generated from operations (85) (782) 16,726
Tax paid (1,402) (394) (2,259)
Net cash (outflow) / inflow from operating activities (1,487) (1,176) 14,467
Cash flows from investing activities
Capitalised internal development costs (1,616) (796) (2,155)
Purchase of intangible assets (15) - (1,140)
Purchase of property, plant and equipment (148) (391) (725)
Proceeds from sale of intangible assets - - 25
Interest received 467 52 210
Purchase of subsidiary (49,982) - -
Net cash used in investing activities (51,294) (1,135) (3,785)
Cash flows from financing activities
Share issue 120 44 118
Purchase of shares held in trust (3,676) - (5,775)
Interest paid (291) (170) (330)
Payments to finance lease creditors (261) (587) (1,430)
Cancellation payments made to share option holders - (124) (129)
Cash paid to refinance (630) - -
Proceeds from borrowings 35,000 - -
Net cash generated from financing activities 30,262 (837) (7,546)
(Decrease) / increase in cash and cash equivalents in the period (22,519) (3,148) 3,136
Cash and cash equivalents at beginning of year 64,663 64,050 64,050
Exchange gain / (loss) on cash and cash equivalents 1,031 (2,174) (2,523)
Cash and cash equivalents at end of period 43,175 58,728 64,663
Consolidated statement of changes in equity
for the six-month period ended 30 June 2023
Share capital Share premium Retained Merger reserve Own Contingently issuable shares Translation reserve Total
earnings
shares held
in trust
$000 $000 $000 $000 $000 $000 $000 $000
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 loss - - - - - - 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 - - - - (3,676) - - (3,676)
Contingent share consideration - - - - - 1,000 - 1,000
Total contributions by and distributions by owners 1 120 1,059 - (3,676) 1,000 - (1,496)
Balance at 30 June 2023 598 153,741 23,321 19,641 (9,451) 1,000 (2,987) 185,863
596 153,504 9,753 19,641 - - (301) 183,193
Balance at 31 December 2021
Comprehensive Income for the year
Profit for period - - 2,267 - - - - 2,267
Other comprehensive income - - - - - - (4,917) (4,917)
Total comprehensive income/(loss) for the period - - 2,267 - - - (4,917) (2,650)
Contributions by and distributions by owners
Issue of share capital 1 43 - - - - - 44
Share-based payments - - 1,227 - - - - 1,227
Cancellation of equity awards for cash - - (61) - - - - (61)
Share option tax charge - current - - 77 - - - - 77
Share option tax charge - deferred - - (446) - - - - (446)
Total contributions by and distributions by owners 1 43 797 - - - - 841
Balance at 30 June 2022 597 153,547 12,817 19,641 - - (5,218) 181,384
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.
While the financial figures included in this half-yearly report have been
computed in accordance with IFRS applicable to interim periods, 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 2022 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 $35.0m drawings
on its $40.0m revolving credit facility and cash position of $51.8m as at 31
August 2023. 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 2024. In all scenarios modelled, the Group maintains
sufficient funding headroom and is in compliance with its debt covenants
throughout the period of 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 61 to 89 in
the audited financial statements for the year ended 31 December 2022. 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 operates 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 recently acquired software solution for snow sport resorts,
encompasses snow school management, eCommerce ticketing, and mountain
operations.
· accesso Horizon recently acquired global ticketing and visitor management
solution, allows venues to manage services, benefits and entitlements that
guests can utilise through a single platform.
The Group's virtual queuing solution (accesso LoQueue) and experience
management platform (The Experience Engine "TE2") are headed by segment
managers who discuss the operating activities, financial results, forecasts,
and plans of their respective segments with the CODM. These two distinct
operating segments share similar economic characteristics, 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.
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, improving guest experience and increasing revenue for
theme parks.
· The Experience Engine ("TE2") experience management platform which delivers
personalised real-time immersive customer experiences at the right time
elevating the guest's experience and loyalty to the brand.
· accesso Freedom a scalable, modular, and cloud native solution unifying retail
and restaurant sales points to streamline operations and the guest experience.
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 2023 Six months ended 30 June 2022 Year ended 31 December 2022
Unaudited Unaudited Audited
$000 $000 $000
Ticketing 43,761 44,280 95,256
Guest Experience 22,022 19,452 44,474
Total revenue 65,783 63,732 139,730
Ticketing Guest Central unallocated Capitalised development costs
Experience costs Group
Period ended 30 June 2023 - Unaudited $000 $000 $000 $000
Cash EBITDA (1) 35,112 13,303 (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)
Ticketing Guest Central unallocated Capitalised development costs
Experience costs Group
Period ended 30 June 2022 - Unaudited $000 $000 $000 $000
Cash EBITDA (1) 35,190 12,077 (35,827) (796) 10,644
Capitalised development costs 796
Depreciation and amortisation (excluding acquired intangibles) (5,527)
Amortisation related to acquired intangibles (1,114)
Share-based payments (1,227)
Exceptional expenditure on acquisition of intellectual property (296)
Finance income 56
Finance expense (416)
Profit before tax 2,916
(1) Cash EBITDA: operating profit before the deduction of capitalised,
depreciation, acquisition and integration related costs, deferred and
contingent payments, and costs related to share-based payments less
capitalised development costs paid in cash as per the consolidated cash flow
statement.
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. In the comparative period to 30 June 2022, the tax expense was based
on the actual effective tax rate due to the unprecedented challenges caused by
COVID-19 in the ability to estimate the full year effective tax rate reliably.
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 2023 Six months ended 30 June 2022 Year ended 31 December 2022
Unaudited Unaudited Audited
Cash EBITDA $000 $000 $000
Operating profit (801) 3,276 12,751
Add: Exceptional expenditure on acquisition & integration 2,466 - -
Add: Exceptional expenditure on acquisition of intellectual property - 296 137
Add: Amortisation related to acquired intangibles 668 1,114 1,667
Add: Share-based payments 1,059 1,227 2,629
Add: Impairment of intangibles - - 32
Add: Amortisation and depreciation (excluding acquired intangibles) 4,705 5,527 10,744
Capitalised internal development costs (1,616) (796) (2,155)
Cash EBITDA 6,481 10,644 25,805
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 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
$000 $000 $000
(Loss) / Profit attributable to ordinary shareholders (625) 2,267 10,056
Basic EPS
Denominator
Weighted average number of shares used in basic EPS 41,400 41,278 41,196
Basic earnings per share - cents (1.51) 5.49 24.41
Diluted EPS
Denominator
Weighted average number of shares used in basic EPS 41,400 41,278 41,196
Deferred share consideration on business combinations
Effect of dilutive securities
Options 2,832 1,768 1,692
Weighted average number of shares used in diluted EPS 44,232 43,046 42,888
Diluted earnings per share - cents (1.51) 5.27 23.45
The Group has made a loss in the current 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 (625) 2,267 10,056
Adjustments to profit for the period:
Exceptional expenditure on acquisition of intellectual property - 296 -
Exceptional expenditure on acquisitions and integrations 2,466 - -
Amortisation relating to acquired intangibles 668 1,114 1,667
Impairment of intangible assets - - 32
Shared based payments 1,059 1,227 2,629
Adjusted profit 3,568 4,904 14,348
Net tax related to above adjustments: (H1 2023: 26.87%, H1 2022: 20.3%; FY 22 (464) 474 418
9.7%)
Adjusted profit attributable to ordinary shareholders 3,104 5,378 14,802
Adjusted basic EPS
Denominator
Weighted average number of shares used in basic EPS 41,400 41,278 41,196
Adjusted earnings per share - cents 7.50 13.03 35.93
Adjusted diluted EPS
Denominator
Weighted average number of shares used in diluted EPS 44,232 43,046 42,888
Adjusted earnings per share - cents 7.02 12.49 34.51
7. Acquisitions
Acquisitions involving the purchase of the acquiree's share capital have been
accounted for under the acquisition method of accounting. A key part of the
Group's strategy is to grow through acquisition. The Group has developed a
process to assist with the identification of the fair values of the assets
acquired and liabilities assumed, including the separate identification of
intangible assets in accordance with IFRS 3 'Business Combinations' as
revised. This formal process is applied to each acquisition and involves an
assessment of the assets acquired and liabilities assumed with assistance
provided by external valuation specialists where appropriate. Until this
assessment is complete, the allocation period remains open up to a maximum of
12 months from the relevant acquisition date. At 30 June 2023 the allocation
process remained in progress.
The consideration in respect of acquisitions comprises amounts paid on
completion and deferred consideration. The consideration has been allocated
against the identified net assets, with the balance recorded as goodwill.
Transaction costs and expenses such as professional fees are charged to the
income statement.
Acquisition of Paradocs Solutions Inc.
On 21 April 2023 the Group acquired 100% of the share capital of Paradocs
Solutions Inc for a total consideration of $10m of which $9m was paid in cash
with a further $1m 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.
Acquisition and integration related costs of $0.41m were incurred in relation
to this acquisition and are included within administrative expenses.
Acquisition of Boxer Consulting Limited
On 4 May 2023 the Group acquired 100% of the share capital of Boxer Consulting
Limited 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.
Acquisition and integration related costs of $0.35m were incurred in relation
to this acquisition and are included within administrative expenses.
Acquisition of VGS
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.
Acquisition and integration-related costs of $1.71m were incurred in relation
to this acquisition and are included within administrative expenses.
The net cash outflow in the current period in respect of acquisitions
comprised:
Six months
ended
30 June 2023
$000
Paradocs
Cash paid 9,010
Net cash acquired (154)
8,856
Boxer Consulting Limited
Cash paid 1,792
Net cash acquired -
1,792
VGS
Cash paid 53,597
Net cash acquired (14,263)
39,334
Total net cash outflow in respect of acquisitions in the current period 49,982
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR SFLEFAEDSELURecent news on accesso Technology
See all newsREG - Accesso Technology - Tender Offer
AnnouncementRCS - Accesso Technology - Expansion of Strategic Partnership with Adyen
AnnouncementREG - Accesso Technology - Director/PDMR Shareholding
AnnouncementREG - Accesso Technology - Total Voting Rights
AnnouncementREG - Accesso Technology - Trading Update and Tender Offer
Announcement