REG - Accesso Technology - INTERIM RESULTS
13/09/2022 07:00
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RNS Number : 1827Z Accesso Technology Group PLC 13 September 2022
13 September 2022
accesso® Technology Group plc
("accesso" or the "Group")
INTERIM RESULTS
for the six-month period ended 30 June 2022
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 ended 30 June 2022 ('H1 2022').
Commenting on the results, Steve Brown, Chief Executive Officer of accesso,
said:
"We are pleased to see visitor demand broadly back to pre-pandemic levels. We
are capturing this demand effectively because of our realigned strategy and
operational structure, and we continue to deliver growth in revenue and
profitability well ahead of pre-pandemic levels. I'm particularly pleased that
our strong revenue performance is continuing to deliver good levels of
profitability, with Cash EBITDA for the period of $10.6m compared to $1.0m in
2019.
At Accesso we are also always building for the long-term, constantly evolving
our suite of high-quality technology solutions. We are particularly optimistic
about our recent acquisition of strong Food & Retail technology which will
increase our product penetration within the leisure sector as well as open up
new opportunities across the broader hospitality sector in the mid-to-long
term.
Excluding the impact of costs associated with the acquisition, we anticipate
our 2022 performance to be in line with the Board's expectations at the start
of the year. Overall, our highly differentiated mobile-first product set and
favourable demand dynamics continue to drive our business forward".
Six months ended Six months ended % change
30 June 2022 30 June 2021
Unaudited Unaudited
($m) ($m)
Group Revenue 63.732 50.654 25.8%
Ticketing and distribution 44.280 31.716 39.6%
Guest Experience 19.452 18.938 2.7%
Group Revenue - constant currency 4 65.418 50.654 29.1%
Ticketing and distribution - constant currency 4 45.791 31.716 44.4%
Guest Experience - constant currency 4 19.627 18.938 3.6%
Gross Profit 47.032 40.818 15.2%
Gross Margin % 73.8% 80.6%
Cash EBITDA 1 10.644 9.819 8.4%
Statutory profit before tax 2.916 0.858 239.9%
Net cash 2 58.728 33.157 77.1%
Adjusted basic EPS (cents) 3 13.03 6.39 103.9%
Basic earnings per share (cents) 5.49 1.91 187.4%
Footnotes:
(1) Cash EBITDA: operating profit before the deduction of amortisation,
depreciation, acquisition 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 and aborted sale expenses 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 2022 have been prepared on a
constant currency basis with the period ended 30 June 2021 to assist with
assessing the underlying performance of the revenue streams. Average monthly
rates for H1 2021 were used to translate the monthly H1 2022 results into a
constant currency using the range of currencies as set out below:
a. GBP sterling - $1.36 - $1.41
b. Euro - $1.19 - $1.22
c. Canadian dollars - $0.79- $0.82
d. Australian dollar - $0.77-$0.78
e. Mexican pesos - $0.05 - $0.05
f. Brazilian real - $0.18 - $0.20
First half highlights
· Strong performance in H1 2022: Revenue of $63.7m represents growth of 25.8%
year-on-year (29.1% constant currency), with cash EBITDA of $10.6m
representing 8.4% growth year-on-year. Performance demonstrates continued
expansion of market opportunity, recovery from the pandemic related closures
of H1 2021, and ongoing success in capturing significant demand alongside
improved staffing levels for key software development and operations staff.
Gross margin of 73.8% (H1 2021: 80.6%) reflects sales returning to
pre-pandemic mix with the lower margin distribution business now 13.5% of
sales mix compared to 5.2% in H1 2021.
· Dynamic new business performance: 10 new customers signed with particular
strength in the live entertainment space. Expanded agreements with 7 accesso
Passport(®) eCommerce clients increased accesso Passport revenue by $3.2m.
New product combination agreements delivered with OWA Parks & Resort,
Twycross Zoo, Typhoon Texas and Adventure City, Anaheim underscores continued
product cross-sell success.
· Post period end - substantial customer renewals and expansions future-proof
growth plan: Five-year renewal, with the option of a further two years, now
completed with Village Roadshow Theme Parks, a top five revenue client for
the Group and our most highly integrated solution implementation including
five of our technologies. New enterprise-wide queuing agreement signed with
Parques Reunidos significantly expands our longstanding relationship and
further embeds the Group as provider-of-choice amongst the leisure industry's
most significant operators, with our virtual queuing to be installed across at
least 4 European theme parks with the potential for additional locations.
· High quality acquisition of key technology assets within the Food & Retail
transactions space: Purchased significant intellectual property on July 1,
2022, for a total consideration of £750k, with extensive functional
capabilities across food and retail sales operations. Elements of this
advanced technology are utilised by top-tier enterprise venue operators
including Disney, Universal, Sea World, and Six Flags. This key technology
offers accesso the unique ability to provide venue operators with robust
transactional support for both Food & Retail within the same system. In
the near term, the Group anticipates some users of various applications within
this technology set may desire to enter limited, non-material support
agreements. Importantly, accesso is working to complete a new Food &
Retail product that is part of these assets. This solution is anticipated to
offer transactional and repeatable revenue potential beyond our historical
customer target base as well as further product penetration within our
existing customer base.
Outlook & Guidance
· Rightsized operational footprint will continue to deliver solid performance
and underscore strength of market position: Clarity in Product group is
supporting continued innovation and customer success. Staffing levels have
normalised through reduced attrition and improved recruitment success. The
Group is resilient, durable and capable of managing change and continued
scaling. 2022 employee survey results show Employee Engagement scores at
record levels. We continue to invest in our business, including to capitalise
on the opportunities unlocked in the Food & Retail segment unlocked by our
recent acquisition
· Short term change in dynamic with large accesso customer: Shift in strategy of
large customer has significantly reduced their related virtual queuing revenue
in the period and to a lesser degree impacted their eCommerce revenue. This
pattern is expected to continue at least through 2022. The Group anticipates
this dynamic to normalise long-term as customer's revised strategy takes
hold.
· Full year guidance expectation: With robust revenue growth, gross margin
broadly in line with pre-pandemic levels, and a return of the cost base to
more normal levels the Group expects its full year results, excluding the
impact of its Food & Retail acquisition on its profit, to be in line with
the Board's expectations at the start of the year.
· Strong liquidity position: The Group continues to trade with no debt and
ends the period with net cash of $58.7m. This drop in cash from year-end
reflects both the movement in FX rates as well as a return to our normal cash
cycle with operating cash generation expected in the second half. Up to $10m
of the Group's cash reserves will be used to fund the Employee Benefit Trust
to purchase shares in the Group starting in H2 2022. These shares will be used
to settle future vests of equity compensation. The Group will also continue to
consider value accretive acquisitions where opportunities arise.
· Market backdrop: We are mindful of changes in the external economic
environment and continue to monitor key indicators. The geographic diversity
and nature of our client base is a strength as regional and local activities
serve as substitutes for more expensive destination travel. We are not yet
observing any negative dynamic in our marketplace and our most important
trading period for the year is largely complete. Nevertheless, we are
monitoring the situation closely.
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@fticonsulting.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 Broker) +44 (0)20 7260 1000
Simon Willis, Hugo Rubinstein
FTI Consulting, LLP (Financial Public Relations) +44 (0)20 3727 1000
Matt Dixon, Adam Davidson, Jamille Smith, Tom Blundell
About accesso Technology Group
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 1,000 clients in 29 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. 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 come from backgrounds working within the attractions
and cultural industry. 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. Our staff understand the day-to-day
operations of managing complex venues and the challenges this creates, and
together we strive to provide our clients and their guests with technology
that empowers them to do more and enjoy more. 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 Twitter
(https://twitter.com/accessotech) , LinkedIn
(https://www.linkedin.com/company/accesso) and Facebook
(https://www.facebook.com/accessoTechnologyGroup/) .
***
Chief Executive's Review
Continued progress in a heightened demand environment
In the first half of 2022 we have continued to push accesso forward on its
growth path. We have emerged from the uncertainty of the pandemic, and our
innovative solutions are once again leading our industry forward in the face
of significantly increased demand for the types of technology we offer. We are
broadening the range of possibilities for the way the leisure, entertainment
and cultural markets interact with consumers, putting mobile first and driving
a substantial increase in the quality of guest experiences across the globe
alongside driving increased visitor spend.
There is no doubt that the pandemic has produced a sustained demand-shift in
our industry. A whole new range of parks and attractions have been introduced
to the transformative potential of technology, and none of them are going
back. For those adopting new solutions, there is no better option than
accesso, which is the proven leader in making attractions more efficient, cost
effective, engaging and enjoyable. As a result, our market opportunity is
expanding, and this new demand is directly aligned with our solution set. With
our growth plan already underpinned by relationships with our industry's
leading players, we are now working to capture this new upside potential as
interest in our technology grows across our market.
Having said this, the pandemic also reminded us never to rest on our laurels
or become complacent in our position. We remain mindful of the potential for
economic circumstance or unexpected events to challenge our business.
Reassuringly, part of our response to the pandemic was to increase our
financial and operational resilience, increase our cash reserves, increase
focus on genuinely profitable growth, and increase the ability of our product
innovation to respond quickly to changing customer needs.
An example of the impact of this adaptability came in the first half when a
change in strategy at a large customer could have materially impacted our
near-term revenue expectations. Our continued confidence in our ability to
meet our full year ambitions, excluding the impact of our Food & Retail
technology acquisition, is a direct result of the more balanced, adaptable and
efficient business we have built. We will continue to demonstrate this
important quality in the coming years. In a world that is more dynamic, and
perhaps more unpredictable than ever, standing ready to adjust and adapt in
the face of change is critical to success and we continue to exhibit our
strength in doing exactly that.
Financial performance
Our strong first half financial performance puts us on target for another very
profitable year. Our revenue growth of 25.8% represents a strong outturn on a
better-than-expected result this time last year, and the positive dynamic in
products like accesso ShoWare(SM) indicates important growth markets like
Mexico are now joining USA, Canada and Europe in bouncing back strongly from
the pandemic. Importantly, this revenue growth has been delivered against the
backdrop of a significant change in strategy at a key customer resulting in a
sharp fall primarily in their virtual queuing revenue as well as an impact on
ecommerce. Despite the impact from the change in strategy with this key
customer, outperformance delivered within our wider customer base highlights
the underlying growth and demand for our products as well as the value in the
diversity of our client base, geographies served and the range of solutions
offered.
Our profit performance against a 16.3% increase in our underlying
administrative costs also shows the quality of our revenue is improving. The
cost growth we've seen is in line with our plan and reflects the expectation
we set in our March 2022 preliminary results that staffing would increase both
to capture new opportunity and to reflect the increase in existing staff
salaries due to inflationary pressures and labour shortages. Importantly, our
cash EBITDA grew 8.4% in the period. We recognise the need to drive consistent
profit in this market and I am pleased that our profit before tax of $2.9m is
both ahead of prior year and ahead of our budget. We are delivering quality
growth at top and bottom line, and we intend to continue this trend into the
long term.
New business performance
The resonance of our innovative product set is best evidenced by our continued
new business performance. We saw 10 new venues signed of which 4 were live
entertainment venues, which continues to grow in importance as a business area
for the Group. We also went live in a further 49 projects during the first
half, of which 26 were accesso Passport deployments and 11 were combined
offerings, largely with accesso Siriusware(SM). At the end of the first half
the Group had 64 clients using a combination of its products, up from 54 at
the end of the first half last year.
Our sales to existing clients were well diversified in the period, although we
do continue to see real strength in the Ski sector. Ski customers made up 49%
of our sales to existing clients during H1, with attraction venues, cultural
venues, theme parks, waterparks and zoos & aquariums making up the
balance.
Customer renewals
Our continued market leadership has for some time been underpinned by the
long-term, sticky and constructive relationships we hold with some of the
largest and most important players in our market. The agreements we hold with
these operators tend to be long-term in nature and give us the confidence to
move boldly in our technology innovation and solution development.
Building on our success during 2021 where we delivered extensions of
enterprise-wide agreements with Merlin Attractions Operations Ltd. ("Merlin"),
and Six Flags, we have now added to this renewal set a 5-year extension, with
the option of a further 2 years, with Village Roadshow Theme Parks. These are
some of the largest attraction operators globally and they have all put their
long-term faith in accesso. We're grateful to them for their continued support
and proud of the faith they continue to show in our business.
Bringing new technology on board
At accesso we are always conscious of the need to continue the evolution of
our technology platform. In this, we are both responding to our customer's
needs and hoping to show them new possibilities in their chosen areas of
focus.
Over recent periods we have been clear that the Food & Beverage space is a
key growth area for our business. It is a key aspect of in-park experience
that is ripe for disruption and improvement by technology. Guests have long
understood that there is no need for them to join lengthy queues for their
favourite attractions. Now, they are realising the same is true of the way
they spend their time accessing other services that make their visits
enjoyable. Food & Beverage is therefore becoming an increasingly
mobile-first, queue-less, seamless and pain-free guest experience which
enables operators to drive revenue growth. Retail operations are also ready
for change, including self-service, mobile-first technologies as operators
look to reduce labor and guests aim for increased convenience. We have been
investing in our own technology in this area including a major capability
expansion of our mobile Food & Beverage offering that is now operating in
some 98 venue-based restaurants, and we have now taken a further, significant,
inorganic step forward to underpin our position in this space with rapidly
increased demand.
In July we purchased top-tier intellectual property assets in the Food &
Retail transaction space for a total consideration of £750k. This technology
has been delivering traditional point-of-sale technology to blue chip leisure
industry customers for some 20 years, handling an expansive feature set across
both Food & Retail, which are typically run on separate, non-integrated
systems. Within our key markets, some large-scale, well-known brands
(including some current accesso customers) are operating various versions of
this technology and may request we enter into limited support agreements. We
do not anticipate such support, if requested, to be material, nor was this the
rationale for the asset acquisition. Competition from robust solutions
offering full range Food & Retail functionality is limited and accesso is
working to complete a new Food & Retail product that is part of these
assets. With accesso's leading position in the leisure sector, we foresee the
opportunity for this new product to be significant in the mid-to-long term
with demand from both existing and new customers as well as the ability to
reach into the larger and broader hospitality market. I am delighted that we
have been able to bring this important and highly differentiated technology
into our business, and while the transaction will have a moderate impact on
our costs during the current year, our belief in the longer-term revenue
opportunity it presents us is very exciting. This asset acquisition highlights
our continued focus on growth alongside our commitment towards high value,
efficient use of capital.
Enhancing our existing product set
During the first half we have also continued to leverage our newly realigned
product development organisation to enhance our existing technology. In
accesso Passport we have introduced an improved date-based booking system to
support this increasingly important aspect of our client's business, and we
have fully enabled Apple Pay and Google Pay support. We also released a new
Passport Support feature within our accesso Passport platform which provides a
refreshed end-customer service experience across our client base. We also
released a new accesso Siriusware version with a major step forward in its
payments technology. This includes a CyberSource security integration,
improved capacity management features for better accesso Passport
interconnectivity and a new reporting function which improves reconciliation
activities when using accesso Siriusware in tandem with accesso Passport
eCommerce.
In accesso LoQueue® we continue to expand our 100% virtual queueing
capabilities to enable reservations for the entire population of guests in a
venue. We enhanced our multi-queue feature enabling clients to offer a
seamless experience to their guests when offering complimentary virtual
queuing as well as being able to provide revenue driving premium services all
within the same Qsmart(SM) session, making it easy for guests to navigate and
leverage the offerings. We have also enabled guests to reserve time slots
for future days in an evolution of features first developed for restaurant use
cases, and we have greatly improved our ability to deliver marketing and alert
messages from our accesso Passport infrastructure to accesso LoQueue enabled
devices.
accesso ShoWare performed strongly in the period as live events continued to
return to the marketplace. We added a new Stay22 integration which provides
guests with a post-purchase option to add accommodations, and have included
improved marketing automation, dynamic bundling and delayed delivery
capability. We have also seen renewed focus and intensity in the performance
of our Ingresso product with some important integrations coming online
including CTS Eventim, Seatgeek, GoApe, and the launch of a fully refreshed
white label ecommerce offering which will continue rolling out over the second
half.
Building our growth culture
At accesso we are also continuing to improve the strength, diversity and
cultural alignment of our team. During the first half of 2022 we onboarded 71
new hires with a focus on engineering and operations. We also launched a new
wellness programme focused on supporting staff with their physical, emotional,
financial, career and community needs, and launched our inaugural accesso
Diversity, Equity and Inclusion Council which includes 12 members from across
the Group whose role will be to help form and drive our DE&I strategy
through the business.
The evidence indicates these initiatives are helping us produce a motivated
workforce strategically aligned behind profitable growth won in the right way.
Our 7(th) annual Employee Engagement Survey had 91% participation and a 4.2
overall average score (out of 5.0), representing our highest ever score and
placing us above the 75(th) % for similarly sized organisations in our
industry.
I am proud of the way our team is working together to deliver our success. I'd
like to thank them all for their ongoing commitment and passion for serving
our customers and truly making accesso a great place to work.
Outlook
I'm pleased with our performance since the beginning of 2022. We have a
product set resonating with the market, a supportive demand environment and a
business set up to deliver. We are clear on our strategy, and we have the
people we need to make the most of our expanding opportunity. accesso is
well-placed for continued success.
We are mindful of changes in the external economic environment and continue to
monitor key indicators. The geographical diversity and nature of our client
base is a strength as regional and local activities serve as substitutes for
more expensive destination travel. To be clear, we are not yet observing any
negative dynamic in our marketplace and our most important trading period for
the year is largely complete. Nevertheless, we are monitoring the situation
closely.
We also continue efforts to mitigate impacts from the shift in admission
strategy at one of our largest customers. We expect this dynamic to
normalise long-term and are working in close partnership to support this
customer as they execute on their strategic plan. As they work to revamp all
areas of their business to offer an enhanced, guest-centric experience there
may be opportunities to deploy additional accesso solutions to support these
efforts.
Overall, with robust revenue growth, a gross margin more in line with
pre-pandemic levels and a return of the cost base to more normal levels, the
Group expects its full year results, excluding the impact of its Food &
Retail acquisition on its profit, to be in line with the Board's expectations
at the start of the year.
Financial Review
Commenting on the results, Fern MacDonald, Chief Financial Officer of accesso,
said:
"During the first half we built on our exceptional performance in 2021,
delivering a solid performance in revenue, profit and cash EBITDA. We move
into the second half with cautious optimism against a challenging
macro-economic outlook. We maintain an exceptionally strong balance sheet and
continue to capitalise on the exciting market opportunity both organically and
by acquisition, acquiring some well-established point of sale intellectual
property just after the period end which delivers incremental functionality
above our existing suite of products".
Financial overview
In the first half of 2022 the Group delivered record financial performance in
revenue, profit before tax and our key metric of cash EBITDA, which is in line
with our expectations following the exceptional performance of 2021.
H1 2022's improvement was largely delivered by our UK, South American and
European operations which were significantly impacted by COVID-19-related
disruption during H1 2021. Each of these regions have demonstrated significant
revenue increases in the period. Our underlying administrative spend has
increased in line with our expectations as we increased our headcount during
the period to fill our backlog of open positions and capture the additional
opportunities, as well as increased existing staff salaries due to
inflationary pressures and labour shortages in order for us to remain
competitive.
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 to be more 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. These adjustments
include the add back of acquisition costs, amortisation related to acquired
intangibles, share-based payments and impairments.
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;
an additional APM, revenue on a constant currency, has been included in this
interim statement due to a period of high volatility in foreign exchange rates
with revenue streams presented on constant currency rates with the comparative
period to assist with assessing the underlying performance. APMs are defined
as follows:
· Cash EBITDA is defined as operating profit before the deduction of
amortisation, impairment of intangible assets, depreciation, acquisition
costs, and costs related to share-based payments and 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;
· Underlying administrative expenses which is administrative expenses adjusted
to include 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 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 revenue streams for period ended 30 June 2022 have been prepared on a
proforma basis using consistent currency rates with the period ended 30 June
2021 to assist with assessing the underlying performance. Average monthly
rates from H1 2021 were used to translate the monthly H1 2022 results into a
constant currency using the range of currencies as set out below
· GBP sterling - $1.36 - $1.41
· Euro - $1.19 - $1.22
· Canadian dollars - $0.79- $0.82
· Australian dollar - $0.77-$0.78
· Mexican pesos - $0.05 - $0.05
· Brazilian real - $0.18 - $0.20
The Group considers cash EBITDA, which disregards any benefit to the income
statement of capitalised development expenditure, as the principal operating
metric.
Key Financial Metrics
Group revenue for the first half of 2022 was $63.7m (H1 2021: $50.7m) being
25.8% up on H1 2021.
Ticketing and Distribution revenue was 39.6% up on H1 2021 due primarily to
venues in certain geographies being less impacted by COVID-19 related
disruption this year. The live entertainment sector benefitted significantly,
demonstrating a marked recovery in our UK and South American markets. Our
distribution-related revenue which is largely focused on the UK's theatre
sector increased by $7.4m period on period, our South American ticketing
revenue increased by $1.4m.
Across our Ticketing and Distribution business the Group went live with 61 new
customers compared to 42 in H1 2021, 46 (H1 2021: 36) of those taking one of
our eCommerce products offerings, demonstrating the continued adoption of
eCommerce-based solutions.
Guest Experience delivered revenue growth of 2.7% on H1 2021. The Experience
Engine(TM) (TE2) business delivered this improvement due to continued
confidence in bespoke professional technology offerings, with large recurring
customers in the ski, theme parks and cruise ship markets using our services.
accesso LoQueue's transactional-based queuing products had mixed performance
with our most significant US located queuing and ticketing customer launching
a more premium focused experience which has resulted in lower volumes. As a
result, their attendance fell by 16.0% in H1 2022 and as a consequence our
queuing customer penetration fell from 6.89% to 4.48%. Encouragingly our other
accesso LoQueue customers were able to deliver an attendance level improvement
of 25.9% and maintain penetration levels.
This revenue performance enabled the Group to deliver an absolute gross profit
increase of 15.2% to $47.0m. As expected this performance was delivered at a
lower gross margin of 73.8% (H1 2021: 80.6%) due to the revenue recovery being
significantly driven by the lower margin distribution business which operated
at a 24.8% gross margin during the half. We expect gross margin in the second
half of the year to be lower as our distribution business continues to recover
and cost base continues to normalise.
Revenue on a segmental basis was as follows:
Six months ended 30 June 2022 Six months ended 30 June 2021 Six months ended 30 June 2022 -constant currency (1)
Unaudited
Unaudited Unaudited
$000 $000 % $000 %
Ticketing and Distribution 44,280 31,716 39.6% 45,791 44.4%
Guest Experience 19,452 18,938 2.7% 19,627 3.6%
Total revenue 63,732 50,654 25.8% 65,418 29.1%
(1) Revenue metrics for the period ended 30 June 2022 have been prepared on a
constant currency basis with the period ended 30 June 2021 to assist with
assessing the underlying performance of the revenue streams. Average monthly
rates for H1 2021 were used to translate the monthly H1 2022 results into a
constant currency using the range of currencies as set out below:
a. GBP sterling - $1.36 - $1.41
b. Euro - $1.19 - $1.22
c. Canadian dollars - $0.79- $0.82
d. Australian dollar - $0.77-$0.78
e. Mexican pesos - $0.05 - $0.05
f. Brazilian real - $0.18 - $0.20
Revenue on a geographical basis was as follows:
Six months ended 30 June 2022 Six months ended 30 June 2021
Unaudited Unaudited
$000 $000 %
USA and Canada 43,865 42,318 3.7%
United Kingdom 13,167 4,947 166.2%
Australia/South Pacific 2,800 2,418 15.8%
Europe 2,237 659 239.5%
Central and South America 1,663 312 433.0%
Total revenue 63,732 50,654 25.8%
Our USA and Canadian revenue delivered a 3.7% revenue improvement despite
volume reductions with one of our largest US based accesso Passport and
accesso LoQueue customers as explained above. The remainder of our USA based
customers performed well and helped to mitigate this isolated customer
performance, further helped by the fact that our California based customers
were able to trade for the full period with no COVID 19 disruption.
In the UK both indoor and outdoor attractions were largely open for H1 2022,
with some minor disruption to January 2022 in the UK theatre sector due to the
Omicron variant. This compared to significant disruption in H1 2021 whereby
outdoor attractions were closed through April 2021 and Live Entertainment was
closed for the majority of H1 2021. These conditions enabled the UK to rebound
to $13.2m, which was 9.7% higher than H1 2019 being the most recent period
unimpacted by COVID-19.
Australia and South Pacific started 2022 with excellent volumes delivering
$2.8m of revenue in the first half, up from $2.4m in H1 2021. The region saw
excellent performance from accesso LoQueue and accesso Passport with
attendance and ticket volumes significantly improved.
Unlike H1 2021, our European region benefitted from an almost complete absence
of COVID -19 closures in the period, with the exception of some short-lived
Omicron closures early in the first half when volumes are typically very low.
The H1 2022 period also experienced very high volumes owing to latent demand
and the benefit of new customers from 2021 helping to deliver $2.2m in
revenues, significantly higher than $1.6m in H1 2019 representing a more
typical period of trade.
Our Central and South American region has emerged from COVID-19 induced
disruption, performing extremely well from March 2022 onwards as venues
reopened on mass and live entertainment returned, delivering volumes in excess
of our expectations and getting closer to a typical period for the region with
$1.7m of revenue; in H1 2019 this region delivered $2.0m, H1 2021 for this
region was severely impacted. This region has continued to perform well and we
anticipate the full year to be closer to 2019 levels.
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. 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
has grown as a percentage of overall revenue to 82.1% (2021: 79.9%).
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 an excellent performance
during H1 2022 to $47.2m benefitting from the addition of 64 new eCommerce
customers in 2021 (2020: 37) and a return to more typical trading conditions,
being up 32.7% on H1 2021 and 30.0% up on a normal period of trading
represented by H1 2019 of $36.4m. The Group experienced some minor disruption
across our geographies in January 2022 as a result of the Omicron variant,
largely isolated to live entertainment in the UK and Mexico, however these
markets displayed a recovery for the remainder of the half.
Demand for ticketing eCommerce continues to be high enabling us to welcome 46
new eCommerce customers during H1 2022 and the shift in consumer behaviour to
purchasing online has continued however, customer labor shortages and
inflationary pressures mean the effect is less pronounced than 2021. As
expected, the number of customers requiring guests to make advanced
reservations has decreased as COVID-19 restrictions have been lifted, this is
reflected in our reservation fee income reducing to $12k from $2.6m in H1
2021.
Virtual queuing revenue has increased by 14.5%, however this is behind our
expectations due to the reduced attendance of one of our major queuing
customers as explained above.
Professional services revenue performed ahead of our budget, H1 2021 and a
normal period of trade in H1 2019, as they continue to deliver excellent
bespoke solutions to recurring customers in the ski, cruise and attractions
markets. Our platform revenues continue to build with our professional service
customers adding further repeatable platform fees for hosting food and
beverage mobile apps.
The H1 2021 period included hardware sales of $1.4m for accesso Prism(SM) 2
wristbands relating to our accesso LoQueue transactional revenue which did not
recur. Hardware sales in H1 2022 included equipment related to the addition of
15 new implementations for attractions utilising our accesso Siriusware point
of sale systems.
Six months ended 30 June 2022 Six months ended 30 June 2021
Unaudited Unaudited
$000 $000 %
Virtual queuing 11,623 10,152 14.5%
Ticketing and eCommerce 35,594 22,815 56.0%
Reservation fees 12 2,614 (99.5%)
Transactional revenue 47,229 35,581 32.7%
Maintenance and support 3,623 3,640 (0.5%)
Platform fees 1,492 1,256 18.8%
Total Repeatable 52,344 40,477 29.3%
Licence revenue 1,127 913 23.4%
Professional services 8,249 6,752 22.2%
Non-repeatable revenue 9,376 7,665 22.3%
Hardware 724 2,088 (65.3%)
Other 1,288 424 203.8%
Other revenue 2,012 2,512 (19.9%)
Total revenue 63,732 50,654 25.8%
Total Repeatable as % of total 82.1% 79.9%
The Group's reported gross profit margin of 73.8% has reduced, as expected,
relative to 80.6% achieved in H1 2021 and is much more in line with H1 2019's
74.9%, a period unimpacted by COVID-19. This is a result of our lower margin
distribution businesses being significantly impacted by COVID 19 closures
during H1 2021 and demonstrating a $7.4m period on period increase,
contributing 4.6% of gross profit compared to 2.1% in the comparative period.
This impact of this is offset slightly by the rebound of assigned seating live
entertainment ticketing in North America which operates at 88.0% margin and
increased to 10.2% contribution of gross profit from 5.7% in H1 2021
Administrative expenses
Reported administrative expenses increased 11.7% to $43.8m in H1 2022 (H1
2021: $39.2m), now 4.1% above H1 2019 reflecting the Group's recruitment
efforts as 38 full time positions were filled during the half, headcount
during the first half of 2021 was significantly lower following the reductions
made during 2020. Share-based payment costs have increased on H1 2021 to $1.2m
due to key management incentive arrangements being granted in May 2022 and a
full period impact of those granted in May 2021.
Underlying administrative expenditure increased by 16.3% to $37.0m on H1 2021
due to the headcount growth noted above, the related recruitment costs to
capture the available revenue opportunities presented and the requirement to
increase existing staff salaries in line with market conditions following
labour shortages and inflationary pressures.
During 2021 the Group also took action to rationalise its property leases and
did not renew property leases when they expired in San Diego, London, Sydney,
Belfast, Sao Paulo and Annapolis, resulting in a $198k reduction in property
lease payments in H1 2022 relative to 2021
Six months ended 30 June 2022 Six months ended 30 June 2021
Unaudited Unaudited
$000 $000
Administrative expenses as reported 43,756 39,163
Capitalised development expenditure (1) 796 669
Amortisation related to acquired intangibles (1,114) (1,253)
Share-based payments (1,227) (1,076)
Amortisation and depreciation (2) (5,527) (6,504)
Property lease payments not in administrative expense 587 785
Exceptional expenditure on acquisition of intellectual property (296) -
Underlying administrative expenditure 36,975 31,784
(1) See consolidated cash flow statement.
(2) This excludes acquired intangibles but includes depreciation on
right of use assets.
Cash EBITDA
The Group delivered record Cash EBITDA for the period of $10.6m, an $0.8m
increase from H1 2021. This 8.4% increase is primarily the result of higher
sales due to the recovery explained above delivering an extra $6.2m in gross
profit, of which $4.6m was consumed in additional administrative expense as
our cost base and headcount scaled to fill our backlog of open positions and
capture the additional opportunities, together with the increase in existing
staff salaries due to market conditions.
The table below sets out a reconciliation between statutory operating profit
and cash EBITDA:
Six months ended 30 June 2022 Six months ended 30 June 2021
Unaudited Unaudited
$000 $000
Operating profit 3,276 1,655
Add: Exceptional expenditure on acquisition of intellectual property 296 -
Add: Amortisation related to acquired intangibles 1,114 1,253
Add: Share-based payments 1,227 1,076
Add: Amortisation and depreciation (excluding acquired intangibles) 5,527 6,504
Less: Capitalised internal development costs paid in cash (796) (669)
Cash EBITDA 10,644 9,819
The Group recorded an operating profit of $3.3m in H1 2022 (H1 2021: $1.6m);
and adjusted earnings per share in the first half of 2022 increased to 13.03
cents (H1 2021: 6.39 cents).
Development expenditure
Six months ended 30 June 2022 Six months ended 30 June 2021
Unaudited Unaudited
Total development expenditure 13,277 11,108
% of total revenue 20.8% 21.9%
2022 has been a period of significant investment in our products as we look to
accelerate the integration and evolution of our point of sale and eCommerce
products, expand the breadth of our mobile offering, and be able to provide
our customers with yield management and dynamic pricing solutions. Total
development expenditure for H1 2022 increased to $13.2m, 19.5% higher than H1
2021 with the majority of our headcount and salary increases being within the
engineering and product teams.
The Group capitalises elements of development expenditure where it is
appropriate and in accordance with IAS 38 Intangible Assets. Capitalised
development expenditure of $0.8m (H1 2021: $0.7m) represents 6.0% (H1 2021:
6.0%) of total development expenditure. Development continues to expand the
product set and add features that will be important for our customers'
operations in the future, based on the recent level of capitalisable projects
we have commenced we anticipate our full year capitalised development to be at
a higher run rate than that presented in H1 2022.
Cash and net cash
Net cash at the end of the period has reduced to $58.7m from $64.1m at 31
December 2021.
30 June 2022 31 December 2021
$000 $000
Cash in hand & at bank 58,728 64,050
Net cash 58,728 64,050
The Group delivered another period of strong operating cashflow before
movements in working capital of $11.5m (H1 2021: $10.8m), however, in excess
of $12.4m has been consumed in working capital movements as the business
resumes its more typical working capital cycle in H1 2022. This included $1m
placed in escrow for the purchase of intellectual property rights on 1 July
2022, see post balance sheet events details below.
H1 2021 benefitted from an unusually low $3.2m outflow in working capital,
this was a result of the UK theatre sector and live entertainment being
severely impacted in December 2020 by COVID-19, ordinarily a very busy month
for that sector. The Group was therefore holding a low level of trade payables
in December 2020 for cash collected from consumers, with the face value of the
ticket less our commission due back to venues. Trade and other payables in
December 2020 were $15.9m as compared to $29.2m in December 2021.
The cash balance of the Group has also been adversely impacted by movements in
foreign exchange rates with an outflow of $2.2m. The main component of this
being in respect of movements in GBP to USD, the Group held £19.7m at 30 June
2022 which has lost value by the rate moving from 1.35 to 1.22 in the six
month period to 30 June 2022.
The Group has a 3-year, £18m Coronavirus Large Interruption Scheme Loan
revolving credit facility at a 3.75% margin with a commitment fee of 1.5%
expiring in March 2024. Quarterly covenant tests are in place on minimum
revenue and minimum liquidity for 2 years to December 2022. From March 2023
additional covenants are added for leverage and interest cover. No drawings
have been made on this facility.
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. During the period to 30 June 2022, there
have been changes in the economic environment and an increase in market
interest rates which impact the discount rate used in the value-in-use
calculations and hence are likely to materially impact the recoverable amount
for each CGU. Both are indicators of impairment and therefore a full
impairment review has been performed at 30 June 2022.
Having completed the June 2022 impairment review, no impairment has been
recognised in relation to the CGUs
Taxation
The tax rate used by the Board on the half year to 30 June 2022 represents the
actual effective tax rate for the period, this is a result of the
unprecedented challenges presented in reliably estimating annual effective
rates. The actual effective tax rate on the statutory profit before tax for
the half year is 22.3% (Year ended 31 December 2021: 81.8%).
The December 2021 rate is not comparable due to $12.6m of previously
unrecognised deferred tax asset on US losses and US tax credits being
available for recognition in 2021 due to the ability to forecast profitability
to utilise these losses and tax credits.
Post balance sheet events
Intellectual property acquisition
On 1 July 2022 the Group purchased some of the intellectual property rights
for a long-standing technology platform for a total consideration of £750k
(plus related acquisition costs in the period to 30 June 2022 of $296k), that
specializes in food and retail point of sale solutions with features that will
extend our existing product suite. We are now working on a project that was
in-flight at the time of acquisition to complete it fully for today's market,
after which it will be launched by the Group to provide a highly relevant,
integrated, hosted food and retail technology solution capable of servicing
the full range of venues sizes and a broad array of hospitality operations.
This solution is anticipated to offer transactional and repeatable revenue
potential beyond our historical customer target base as well as further
product penetration within our existing customer base.
Employee Benefit Trust share purchase
Up to $10m of the Group's cash reserves will be used to fund the Employee
Benefit Trust to purchase shares in the Group starting in H2 2022. These
shares will be used to settle future vests of equity compensation
- ENDS -
Consolidated statement of comprehensive income
for the six-month period ended 30 June 2022
30 June 2022 Unaudited 30 June 2021 Unaudited 31 December 2021
Audited
Notes $000 $000 $000
Revenue 63,732 50,654 124,794
Cost of sales (16,700) (9,836) (28,401)
Gross profit 47,032 40,818 96,393
(43,756) (39,163) (82,872)
Administrative expenses
Operating profit before impairment reversal of intangible assets 3,276 1,655 18,814
Impairment reversal of intangible assets - - 1,707
Operating profit 3,276 1,655 13,521
Finance expense (416) (809) (1,450)
Finance income 56 12 39
Profit before tax 2,916 858 12,110
Income tax (charge)/benefit 4 (649) (72) 9,908
Profit for the period 2,267 786 22,018
Other comprehensive income/(loss)
Items that will be reclassified to income statement
Exchange differences on translating foreign operations (4,917) 1,151 (219)
Income tax credit on items recorded in other comprehensive income - 193 118
(4,917) 1,344 (31)
Total comprehensive (loss)/ income (2,650) 2,130 21,987
All loss and comprehensive loss is attributable to the owners of the parent
Earnings per share expressed in cents per share:
Basic 6 5.49 1.91 53.39
Diluted 6 5.27 1.85 51.45
All activities of the company are classified as continuing.
Consolidated statement of financial position as at 30 June 2022
30 June 2022 30 June 2021 31 December 2021
Unaudited Unaudited Audited
$000 $000 $000
Assets
Non-current assets
Intangible assets 113,054 124,560 120,088
Property, plant and equipment 1,916 1,958 2,236
Right of use assets 2,520 3,611 3,053
Contract assets 292 266 375
Deferred tax 15,415 7,674 16,260
133,197 138,069 142,012
Current assets
Inventories 424 533 286
Contract assets 5,692 7,182 3,614
Trade and other receivables 22,541 19,889 18,805
Income tax receivable 1,237 2,299 1,097
Cash and cash equivalents 58,728 33,157 64,050
88,622 63,060 87,852
Liabilities
Current liabilities
Trade and other payables 26,659 23,429 29,219
Lease liabilities 1,011 937 1,003
Contract liabilities 5,040 4,321 8,063
Corporation tax payable 947 94 503
33,657 28,781 38,788
Net current assets 54,965 34,279 49,064
Non-current liabilities
Deferred tax 3,662 6,871 4,236
Contract liabilities 1,001 1,084 914
Lease liabilities 2,115 3,373 2,733
6,778 11,328 7,883
Total liabilities 40,435 40,109 46,671
Net assets 181,384 161,020 183,193
Shareholders' equity
Called up share capital 597 595 596
Share premium 153,547 153,337 153,504
Retained earnings 12,817 (13,622) 9,753
Merger reserve 19,641 19,641 19,641
Translation reserve (5,218) 1,069 (301)
Total shareholders' equity 181,384 161,020 183,193
Consolidated statement of cash flows
for the six-month period ended 30 June 2022
30 June 2022 30 June 2021 Unaudited 31 December 2021 Audited
Unaudited
$000 $000 $000
Cash flows from operations
Profit for the period 2,267 786 22,018
Adjustments for:
Depreciation (excluding finance leased assets) 664 1,067 1,827
Depreciation on leased assets 450 558 1,035
Amortisation on acquired intangibles 1,114 1,253 2,373
Amortisation on development costs and other intangibles 4,413 4,879 9,319
Reversal of impairment of intangible assets - - (1,707)
(Gain) / Loss on disposal of fixed assets (31) - 2
Share-based payments 1,227 1,076 2,490
Finance expense 416 809 1,450
Finance income (56) (12) (39)
Foreign exchange loss/(gain) 385 317 312
Income tax charge / (credit) 649 72 (9,908)
RDEC tax credits - - (81)
Operating cashflow before movement in working capital 11,498 10,805 29,091
(Increase)/ decrease in inventories (143) 918 861
(Increase)/decrease in trade and other receivables (4,809) (4,257) (3,592)
(Decrease)/increase in trade and other payables (2,312) 6,481 (3,316)
(Increase)/decrease in contract assets/contract labilities (5,016) (6,315) 16,241
Cash (used in)/generated from operations (782) 7,632 39,285
Tax paid (394) (1,375) (171)
Net cash (outflow)/inflow from operating activities (1,176) 6,257 39,114
Cash flows from investing activities
Deferred consideration settlement - (13) (13)
Capitalised internal development costs (796) (669) (720)
Purchase of property, plant and equipment (391) (227) (960)
Proceeds from sale of intangible assets - - 23
Interest received 52 11 28
Net cash used in investing activities (1,135) (898) (1,642)
Cash flows from financing activities
Share issue 44 11 178
Interest paid (170) (332) (514)
Payments to finance lease creditors (587) (785) (1,408)
Net payments made to settle Forward FX contracts - (409) (409)
Cancellation payments made to share option holders (124) - -
Cash paid to refinance - (685) (813)
Repayment of borrowings - (27,033) (27,033)
Net cash generated from financing activities (837) (29,233) (29,999)
(Decrease)/increase in cash and cash equivalents in the period (3,148) (23,874) 7,473
Cash and cash equivalents at beginning of year 64,050 56,355 56,355
Exchange gain/(loss) on cash and cash equivalents (2,174) 676 222
Cash and cash equivalents at end of period 58,728 33,157 64,050
Consolidated statement of changes in equity
for the six-month period ended 30 June 2022
Share capital Share premium Retained Merger reserve Translation reserve Total
earnings
$000 $000 $000 $000 $000 $000
Balance at 31 December 2021 596 153,504 9,753 19,641 (301) 183,193
Comprehensive income for the period
Profit for period - - 2,267 - - 2,267
Other comprehensive loss - - - - (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
595 153,327 (15,864) 19,641 (82) 157,617
Balance at 31 December 2020
Comprehensive Income for the year
Profit for period - - 786 - - 786
Other comprehensive income - - - - 1,151 1,151
Income tax credit on items recorded in other comprehensive income - - 193 - - 193
Total comprehensive income for the year - - 979 - 1,151 2,130
Contributions by and distributions by owners
Issue of share capital - 10 - - - 10
Share-based payments - - 1,076 - - 1,076
Share option tax charge - deferred - - 187 - - 187
Total contributions by and distributions by owners - 10 1,263 - - 1,273
Balance at 30 June 2021 595 153,337 (13,622) 19,641 1,069 161,020
Notes to the Interim Financial Information
1. Basis of preparation
accesso Technology Group plc (the "Group") is a company domiciled in
England. The basis 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 2021 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 unutilised
£18.0m/$21.0m revolving credit facility and net cash position of $63.4m as at
31 August 2022, providing total available liquidity to the Group of $84.4m as
at 31 August 2022. 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 2023. 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 65 to 101 in
the audited financial statements for the year ended 31 December 2021. 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.
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, improve guest experience and increase 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
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 2022 Six months ended 30 June 2021 Year ended 31 December 2021
Unaudited Unaudited Audited
$000 $000 $000
Ticketing 44,280 31,716 75,930
Guest Experience 19,452 18,938 48,864
Total revenue 63,732 50,654 124,794
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
Ticketing Guest Central unallocated Capitalised development costs
Experience costs Group
Period ended 30 June 2021 - Unaudited $000 $000 $000 $000
Cash EBITDA (1) 27,281 12,690 (29,483) (669) 9,819
Capitalised development costs 669
Depreciation and amortisation (excluding acquired intangibles) (6,504)
Amortisation related to acquired intangibles (1,253)
Share-based payments (1,076)
Finance income 12
Finance expense (809)
Profit before tax 858
((1) Cash EBITDA: operating profit before the deduction of capitalised,
depreciation, acquisition 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 expense for both the periods ended 30 June 2022 and 30 June 2021 have
been 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 on acquisition of
intellectual property and any related tax effect on those items. For tax
purposes exceptional expenditure on acquisition of intellectual property is
not deductible for tax purposes, all other adjusted items to arrive at
adjusted profit before tax have a related tax credit or expense.
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 2022 Six months ended 30 June 2021 Year ended 31 December 2021
Unaudited Unaudited Audited
Cash EBITDA $000 $000 $000
Operating profit 3,276 1,655 13,521
Add: Exceptional expenditure on acquisition of intellectual property 296 - -
Add: Amortisation related to acquired intangibles 1,114 1,253 2,371
Add: Share-based payments 1,227 1,076 2,490
Deduct: Reversal of impairment - - (1,707)
Add: Amortisation and depreciation (excluding acquired intangibles) 5,527 6,504 12,183
Capitalised internal development costs (796) (669) (720)
Cash EBITDA 10,644 9,819 28,138
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 2022 30 June 2021 31 December 2021
Unaudited Unaudited Audited
$000 $000 $000
Profit attributable to ordinary shareholders 2,267 786 22,018
Basic EPS
Denominator
Weighted average number of shares used in basic EPS 41,278 41,222 41,240
Basic earnings per share - cents 5.49 1.91 53.39
Diluted EPS
Denominator
Weighted average number of shares used in basic EPS 41,278 41,222 41,240
Deferred share consideration on business combinations
Effect of dilutive securities
Options 1,768 1,369 1,552
Weighted average number of shares used in diluted EPS 43,046 42,591 42,792
Diluted earnings per share - cents 5.27 1.85 51.45
Adjusted EPS
Profit attributable to ordinary shareholders 2,267 786 22,018
Adjustments to profit for the period:
Exceptional expenditure on acquisition of intellectual property 296 - -
Amortisation relating to acquired intangibles 1,114 1,253 2,371
Reversal of impairment of intangible assets - - (1,707)
Shared based payments 1,227 1,076 2,490
Adjusted profit 4,904 3,115 25,172
Net tax related to above adjustments: (H1 2022: 20.3%, H1 2021: 20.7%; FY 474 (483) 26
2021: 17.9%)
Adjusted profit attributable to ordinary shareholders 5,378 2,632 25,198
Adjusted basic EPS
Denominator
Weighted average number of shares used in basic EPS 41,278 41,222 41,240
Adjusted earnings per share - cents 13.03 6.39 61.10
Adjusted diluted EPS
Denominator
Weighted average number of shares used in diluted EPS 43,046 42,591 42,792
Adjusted earnings per share - cents 12.49 6.18 58.88
7. Post balance sheet events
Intellectual property acquisition
On 1 July 2022 the Group purchased some of the intellectual property rights
for a long-standing technology platform for a total consideration of £750k
(plus related acquisition costs in the period to 30 June 2022 of $296k), that
specializes in food & beverage ('F&B') and retail point of sale
solutions with features that fill gaps within our existing product suite. The
product requires a period of further enhancement to prepare it fully for
market after which it will be used by the Group to provide integrated F&B
and retail hosted point of sale to both new and existing customers of the
Group.
Employee Benefit Trust share purchase
Up to $10m of the Group's surplus cash will be used to fund the Employee
Benefit Trust to purchase shares in the Group starting in H2 2022. These
shares will be used to settle future vests of equity compensation.
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