REG - Accesso Technology - Preliminary Results
22/03/2022 07:16
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RNS Number : 5245F Accesso Technology Group PLC 22 March 2022
22 March 2022
accesso® Technology Group plc
("accesso" or the "Group")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021
Record revenue and profit as technology demand surges in our industry
accesso Technology Group plc (AIM: ACSO), the premier technology solutions
provider to leisure, entertainment and cultural markets, today announces
preliminary results for the year ended 31 December 2021 ('2021').
Commenting on the results, Steve Brown, Chief Executive Officer of accesso,
said:
"Accesso's performance during 2021 was simply outstanding. We delivered record
revenue and record profit during another challenging year in our end markets
as they continued to recover at varying levels through the year.
Our confidence in our future growth trajectory has never been stronger as we
recognise the significant uptick in demand for technology across all leisure
sectors. Digital solutions are now an operational necessity as consumers
expect a mobile-first experience in every aspect of their lives. Operators are
also increasingly looking to gain efficiency, reduce labour expenses and
optimise revenue via digital transformation. With our strong and
well-established range of mobile-centric solutions across ticketing, virtual
queueing, guest experience and personalisation, we believe we are the best
platform available for any venue operator as evidenced by our remarkable
success in 2021 and the shape of our new business pipeline for the year ahead.
In the near term, we'll invest squarely behind this increased level of demand
to secure the long-term, repeatable revenue during the crucial adoption phase.
We will also see a welcome return to more normal operations and full staffing
levels which will support the growing demand for our solutions and allow for
continued innovation."
2021 Financial highlights
2021 2020 Vs 2020 2019 ((4)) Vs 2019
$000 $000 $000
Revenue 124,794 56,094 122.5% 117,182 6.5%
Cash EBITDA ((1)) 28,138 (11,450) 345.7% 7,141 294.0%
Statutory profit/(loss) before tax 12,110 (32,862) 136.9% (57,581) 121.0%
Net cash ((2)) 64,050 29,656 116.0% 354 17,993.2%
Adjusted basic EPS (cents) ((3)) 61.10 (60.64) 200.8% 30.78 98.5%
Basic earnings per share (cents) 53.39 (84.78) 163.0% (184.26) 129.0%
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 (see reconciliation in financial review).
(2) Net cash is calculated as cash and cash equivalents less borrowings (see
reconciliation in financial review).
(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
(see note 9).
(4) 2019 is included as a comparative period due to the exceptional impact of
COVID-19 on the 2020 results, representing a period without disruption from
COVID-19.
· Revenue of $124.8m represents a Group record and was up 6.5% compared to our
pre-pandemic 2019 level despite COVID-19 related interruption in certain
markets during the year. This included closures in certain geographies and
parks not yet returned to full capacity. Live entertainment encountered
significant disruption and is now demonstrating a recovery in the first few
months of 2022. Our result was significantly ahead of our initial 2021
guidance.
· Cash EBITDA ((1)) was a record $28.1m for the year, 294.0% greater than the
$7.1m in 2019. This was driven by 6.5% revenue growth at a higher gross margin
due to changes in the product mix; improved productivity from the structural
realignments implemented during 2020; and a challenging recruitment
environment which impacted our ability to hire at our desired pace and
resulted in depressed staff costs even as our revenue rapidly recovered. We
are now fully staffed, however new positions will be opened as we continue to
invest in our product and also support securing the long-term, repeatable
revenue opportunities given this increased demand for our solutions.
· Statutory profit before tax of $12.1m was enabled by the Group's strong cash
EBITDA performance. The measure further benefits from acquisition related
amortisation, development cost amortisation and impairments reducing by $5.0m
relative to 2020 and the reversal of intangible impairments of $1.7m from
2019. Whilst not at the same level, we anticipate further amortisation savings
in the near term in the absence of any acquisition activity.
· Net Cash ((2)) was $64.1m at the year-end, up $34.4m on 2020, reflecting a
very strong year of cash generation. Cash EBITDA of $28.1m was the key driver,
along with our continued focus on strong working capital management. We move
into 2022 with significant surplus cash on hand to invest in growth, no debt
and access to undrawn debt facilities.
· Adjusted Basic EPS ((3)) of 61.10 cents per share represents the best in the
Group's history and is driven by our record profitability. Our EPS measures
have benefited from a credit of $12.6m of prior year US tax losses and tax
credits, unrecognised in 2020, being recognised in 2021 due to the Group's
profit in the period and its ability to forecast consistent profitability.
2021 Operational & Strategic Highlights
· Capitalising on substantial demand: We are capturing surging demand in our
markets. In total we signed 50 new venues and 64 eCommerce deals in 2021.
Customers are also extending our agreements, with 21 of our accesso Passport®
customers renewing their contracts in 2021.
· Increased utilisation of our solutions: The Group delivered record volumes
during the year with accesso Passport processing 96.1 million tickets and
reservations, a 69.4% increase in volume relative to 2019. Our accesso
LoQueue® solution delivered a 73.5% increase in guest conversion relative to
2019, with 5.9% of park guests purchasing an accesso LoQueue product compared
to 3.4% in 2019, despite a 27.7% reduction in park attendances levels relative
to 2019 on a like-for-like basis.
· Innovation driving further success: Record virtual queuing performance with
significant adoption at Six Flags Entertainment Corporation ("Six Flags") of
our Qsmart solution with a further nine deployments at their venues. We won 21
combination customers with our complementary solutions in 2021, well ahead of
any other prior year in the Group's history. The cross-sell between accesso
Passport and accesso Siriusware(SM) was particularly strong in 2021. New
services like The Experience Engine(TM) (TE2) Food & Beverage
capabilities are also gaining traction. Pre-sales for accesso Passport
end-to-end solution began in 2021.
· Industry focus driving increased success: We have seen strong demand in ski
areas, with 78% of our accesso Passport renewals in 2021 coming from our ski
customers. Reduced restrictions on outdoor activities saw some of our North
American ski customers open for the full season in 2021, boosting our results
with some of their best trading years.
· Strategic enterprise-wide contract renewals completed in December 2021:
Extended partnerships with Merlin Attractions Operations Ltd. ("Merlin"), and
Six Flags, demonstrate that accesso has adapted effectively and continues to
provide valuable support to our client base.
2022 Outlook & Guidance
· Strong start to 2022: Our trading volumes for January and February are
encouraging with accesso Passport ticket volume for North American double that
of 2019 as we begin to benefit from a significant number of customers
onboarded during the past 2 years and increasing customer appetite for a
leading-edge eCommerce solution. The removal of COVID-19 restrictions in many
parts of the world has had a positive impact, particularly on our live
entertainment business, and we expect our product mix and gross margin to be
more consistent with pre-COVID levels in 2022. Whilst we remain cognisant of
the relatively early stage in the year, the impact of tiered pricing at higher
volumes and revised terms related to enterprise renewals, we are cautiously
optimistic about another year of good progress.
· Expected increases to cost base: The number of open positions at the beginning
of 2022 is significantly less than the same period last year. As previously
communicated, this, combined with the overall industry pressure on wages, is
expected to result in an increase in our cost base as we return to normal
staffing levels.
· Continued build of cash reserves: We expect another cash generative year,
building on top of a year-end cash balance in excess of $60m.
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 presentation for analysts at 1300 UK time today.
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.
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 +44 (0)20 3727 1000
Matt Dixon, Adam Davidson
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.
COVID-19 has highlighted the benefits our technology is able to bring to
venues from facilitating social distancing using our robust and sophisticated
virtual queuing solutions; reservation systems delivered through our agile
eCommerce platform to enable capacity management, taking queues away from
front gates; and attraction eateries utilising our contactless food and
beverage offerings.
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 statement
I am thrilled with accesso's performance in 2021. We worked hard to stay
resilient through the pandemic's most severe impacts on our industry and we
have emerged stronger than ever. I continue to be inspired by the optimism,
creativity and dedication of our team, which has outperformed my expectations
through the year. To the entire accesso organisation, I offer my deep thanks
for a job well done.
Reflecting on our performance, I am proud of the difficult decisions we made
early in the pandemic to reshape and redirect our operation to prepare accesso
for a more successful future. This process wasn't always easy for the team,
but it was necessary, and we are now seeing the results. We made a concerted
effort to refocus our business to operate with higher value output while
focusing more directly on the needs of our end markets. Furthermore, with
early signs of increasing demand, we allocated resources to handle the rising
utilisation of our solutions by existing customers and to capture the sales
pipeline demand from new ones.
We are now operating a more purpose-driven operational platform with less
duplication, more accountability and with resources deployed more effectively
for growth. For example, we have a unified group of engineers working solely
on eCommerce across the Group, and we have operational teams dedicated to
driving growth in increasingly important segments of our market like the ski
industry. Overall, we are more efficient, more targeted, and more productive.
The adjustments we've made are paying off, and the evidence is clear in our
financial results.
In terms of pandemic recovery, the theme park, water park and ski sectors
began a fairly robust rebound across the year, with attendance levels toward
year end approaching 2019 levels. However, the significant Live Entertainment
segment of our business remained challenged for much of the year. Activity
from theatres, fairs and festivals in the US and Canada reached 2019 levels
mid-year, however in our key UK market the recovery pace was slower and was
significantly affected by the Omicron variant in December. Despite the mixed
pace of recovery across the segments we service, we delivered revenue growth
of 6.5% on our 2019 level. Propelled by significantly higher technology
utilisation in the theme park sector and the benefit from a significant number
of new customers as well as compelling growth within ski sectors, we exceeded
pre-pandemic revenues even with significantly impacted volumes from our live
entertainment focused solutions.
The significantly higher utilisation of our solutions by both venue operators
and their visitors is a clear indication that the relationship with technology
in our end markets has undergone a fundamental change. Bearing in mind, a
significant portion of our revenue is transaction based and we are confident
this new level of engagement with our technologies is here to stay. Many
guests who before purchased tickets at the front entry or food at the
restaurant counter are now mobile users. Guests that previously utilised our
virtual queuing solution via a wearable device are now doing so via their
smartphone. Operators have seen our technology transform the quality of their
experience, deliver greatly enhanced revenues, and lower their operating
costs. They are never going back.
With the market coming towards us and our business ready to grasp the
opportunity, now is the time to push forward to maintain our leadership
position in the marketplace and go for growth. We need to continue scaling
accesso to capture the full opportunity we see ahead of us, and that means
continuing to invest in results-focused product innovation, sales teams, our
support operation and our broader team behind all of them. As we do this and
lean into this newfound level of demand, we expect revenue growth to continue.
We'll also remain a more profitable business than we were before the pandemic
as our development efforts are closely correlated to targeted, measurable
results.
My confidence in the outlook for accesso is reinforced by the start we have
made to 2022. We begin the year having renewed and expanded important customer
relationships with Merlin and Six Flags, and with a robust sales pipeline.
Overall, we have entered the new year with our team aligned behind our plan
and a high demand for our solutions across the marketplace. With a strong cash
balance and zero debt, accesso has never been better positioned for the
future. We're relishing the task of delivering another strong year of results
in 2022.
2021 in review
Innovation driving technology adoption
Our end-markets saw a strong recovery through 2021 as most large-scale visitor
attractions, including theme parks, museums, and ski resorts moved towards
pre-pandemic attendance slightly earlier than we had anticipated. Many of
these used accesso solutions to facilitate their re-openings by leveraging
accesso's reservations functionality to manage capacities and requiring all
visitors to pre-purchase tickets online; our transaction-based model benefited
from this increased utilisation. Whether through virtual queueing, online
ticketing, contactless payments, or other in-venue purchasing, accesso has
enabled operators to digitise their interactions with guests more than ever
before. Although portions of this activity are not expected to repeat as
operations continue to normalise, the overall step-function increase in online
buying and mobile-first approach from operators is here to stay.
During 2021 we saw our Virtual Queueing offerings gain increasing traction in
the marketplace. Key operators continued to increase their queuing footprint
with us, with Six Flags deploying our Qsmart mobile service to nine parks,
allowing visitors to purchase and utilise the service from their own device
versus obtaining a wearable band at the park. Our virtual queuing strategic
priority is to migrate all customers to our Qsmart mobile capabilities and
limit use of the accesso Prism wearable device to situations like waterparks
where they are more necessary. Allowing the visitor to subscribe to the
service via their own smartphone at any point of their visit, from anywhere in
the venue is a game changer in terms of sales penetration and operational
efficiency via reduced labour.
We saw six new queuing implementations in 2021, alongside 3 million rides
enabled in our two 100% virtual queuing properties. Another venue, Parc
Asterix in France, has taken on Qsmart as a premium service after having
adopted 100% virtual queuing on a temporary basis through the pandemic. Palace
Entertainment upgraded to our accesso Prism wearable solution in two
waterparks. Zoombezi Bay, a large waterpark in Ohio, also upgraded to accesso
Prism.
Our accesso Passport ecommerce solution saw volumes up 69.4% in the year
relative to 2019, with 96.1 million tickets and reservations sold online
against 35.1 million in 2020 and 56.7 million in 2019. Crucially, 66.0% of the
volume was sold via mobile. With capacity restrictions still in place for many
venues, reservations became an essential component of capacity management for
guests with Season Passes or Memberships, resulting in 20.4 million
reservations in 2021 compared to just 3.6 million in 2020. We do expect the
number of reservations in our system to fall back somewhat as mandated
capacity limitations recede, however the rapid growth in reservations is an
important proof-point for the adaptability and flexibility of our platform
when it comes to the rapid deployment of innovation to support new customer
paradigms. We have also observed some customers maintaining reservation
requirements well beyond the regulatory capacity limitation period to continue
the improved efficiency and operational success they realised during the
restrictive period.
After a difficult 2020 related to the near-total shutdown of London's West End
theatre market, this year we saw a gradual recovery in volumes for Ingresso,
most notably towards the end of H2. This positive trajectory was interrupted
by the emergence of the Omicron variant in December which resulted in
significant refund activity. In the background as we awaited the recovery
period for Ingresso, efforts continued to expand distribution opportunities
and prepare to capture the uptick in demand as the theatre business returns.
Beyond theatre, we have worked hard to integrate Ingresso more broadly into
our portfolio to diversify its inventory offering. In the year, Ingresso
signed up 15 new distributors and 54 new suppliers, bringing the totals to 88
and 436 respectively. We are also realising significant adoption of our
Ingresso distribution platform by accesso Passport customers, resulting in
nearly 1.4 million tickets sold in 2021.
Another major part of our innovation story has been our new TE2 Food and
Beverage capability, which has continued to gain traction with our customers
as well as notable interest across our end markets. Shifting Food and
Beverage order-taking to a self-service model has become a key priority as
operators look to capture maximum in-venue spending and operate with less
labour. Operators have reported double digit percentage increases in guest
check size when ordering via their mobile device versus placing the order with
an attendant. With the majority of major Food and Beverage systems built for
operation by an attendant, mobile capabilities, and particularly those with
the unique features needed by venue operators like theme parks and ski
resorts, are limited. Due to accesso's long-standing expertise in
high-volume online ordering and revenue optimisation, we are well-positioned
in this newly emerging space.
Capitalising on substantial demand
Importantly, alongside a recovery in normal trading, we have seen
higher-than-anticipated demand in our sales pipeline driven by an acceleration
in the shift to mobile commerce resulting from the broader realignment of
consumer behaviour through the pandemic. The action we have been taking to
capture this increased demand has enabled us to secure 50 new venues and 64
eCommerce deals in 2021. But winning customers is only part of the story. We
have also proven ourselves supportive, trustworthy and innovative partners to
our existing base and our relentless focus on customer success has seen us
renew 21 of our accesso Passport customers in 2021 including our global
agreement with Merlin as well as the continuation of our agreement with Six
Flags where they opted not to exercise their early termination rights.
Success with joint solution deployments
Over the past year we continued our strategy to deliver innovative solutions
that encourage cross-selling across our product set. We are already seeing
customer demand for this improvement coming through, with 20 of our 21
combination clients in the year adding accesso Passport to accesso Siriusware.
These 21 combination wins take on real significance when set against the 39
total combination wins for the business prior to last year. This is a clear
area of focus for the business and one with significant traction.
With the increasing number of customers utilising accesso Passport eCommerce
alongside accesso Siriusware, we prioritised and invested in improvements in
the connectivity between these two systems. With a new, more robust API
Gateway, we dramatically increased data throughput between the systems which
is significantly improving operational performance and reliability. We also
developed a product catalogue synchronisation process allowing product/ticket
setup data from accesso Siriusware to be passed to the accesso Passport
without manually re-keying the information for each item.
Looking ahead, we are now in the process of integrating CyberSource into the
accesso Siriusware point-of-sale system, with release scheduled for Spring
2022. This added functionality will allow combination clients to access
consolidated credit card processing and management in one platform.
Industry focus driving increased success
A significant portion of the integration between our products is happening in
our ski Industry customer base, where we have a substantial strategic focus.
Our performance in this area was strong during 2021, benefiting from the fact
that outdoor activities remained, relatively speaking, open to the public in
the last year. Of the 75.7 million tickets sold through our accesso Passport
eCommerce platform during 2021, 3.0 million were derived from our ski
customers, up from 1.1 million in 2020.
The ski market delivered 78% of the Group's accesso Passport customer renewals
during the year, and around 30% of our ski clients utilise accesso Passport
and accesso Siriusware together. Many of our ski clients also upgraded to
accesso Siriusware 5.0 during 2021, with a good pipeline for continued
upgrades building into 2022.
Technology, operational and security infrastructure
We continue to invest in technology improvements across our product set to
ensure our customers have the highest-quality offerings to meet their needs.
We are evolving our accesso Passport platform, making significant progress on
the 2022 project to bring updated web standards to our user interface and
refresh all the platform's other user elements. We have also completed an
initial version of a templating tool called Passport Configurator, a web-based
tool for the rapid deployment of the accesso Passport eCommerce application
and a multitude of related services. This will reduce the involvement of our
engineering staff in new client provisioning and empower customers to take
more ownership of their accesso Passport deployments. A new automation
framework for the efficient testing and quality assurance of our applications
has been implemented and we completed our annual IT security audit
successfully. Finally, we fully completed the migration of accesso Passport to
Amazon Web Services across all regions.
Operationally we have further consolidated internal systems used for workflow
management and source code storage and now leverage the same solutions across
the Group which enables greatly improved communication and efficiency, whilst
reducing the number of systems to maintain and secure.
Although we do not outline the specifics of security improvements we have made
across the year, we have continued to make significant investment to ensure
our systems are protected and secure. Measures including multi-factor
authentication and those related to remote working have been key priorities.
Our people
Through 2021 we rebuilt our workforce and re-established our growth culture.
We recruited and onboarded 177 new hires (excluding seasonal staff) in the
year and completed an engagement survey with 96% participation. Our overall
score was a strong 4 out of 5, with our COVID pandemic response score reaching
an even stronger 4.4 out of 5.
Our focus on improving employee engagement is helping us to retain talent and
reduce turnover in the highly competitive market. With our engagement survey
results in hand, we have addressed ideas and concerns raised by the team
across a variety of areas including health benefits, compensation and working
environment.
Our efforts to boost the diversity and inclusion within our accesso team also
continued strongly, with unconscious bias training rolling out globally and
the kick-off of a partnership with the US National Diversity Council to assist
in developing our Diversity, Equity and Inclusion plan and goals for the
future. We remain an organisation totally committed to helping our people
flourish and look forward to building on our credentials in this area in the
years to come.
As pandemic restrictions are pared back, we are eager to help our people to
maintain the elements of the new ways of working that enable and motivate
them. As a result, mid-year we shifted to a Global Remote Working policy
allowing the option for our team to select to work fully from home or split
their time between a local office and home. Whilst we continue to operate at
remote status for the majority of our team, we expect to reopen offices in the
first half of 2022 and welcome more staff back into our offices. We also
placed significant focus on the new cultural dynamics faced as a result of
remote working and initiated a range of remote based employee activities. As
part of this initiative, we welcomed numerous guests across the year to
virtually share their experiences and insights as part of our accesso Speaker
Series including experts on creativity, diversity & inclusion and radical
product thinking. At the start of 2021, we set a Group goal to realize
turnover of less than 20%; we reached this goal with a turnover rate of 18% on
the year.
Outlook and guidance
accesso has made a strong start to the 2022 financial year, with trading
volumes in January and February providing an encouraging basis for this year's
performance. In North America, our accesso Passport ticket volumes were double
what we saw in the first two months 2019. This robust performance continues to
be supported by the removal of COVID-19 restrictions across the world as well
as the benefit from a significant number of customers onboarded during the
past 2 years and increasing customer appetite for a leading-edge eCommerce
solution. Markets segments which have been slower to recover, like Live
Entertainment, are now ramping up, and we expect our product mix to be more
consistent with pre-COVID levels in 2022. Whilst we remain cognisant of the
relatively early stage in the year, the impact of tiered pricing at higher
volumes and revised terms related to enterprise renewals, we are cautiously
optimistic about another record revenue year.
As we work to capture high levels of demand we are scaling our workforce back
to normal levels. At the outset of 2022 we have filled most of the positions
we had outstanding in 2021, and as previously communicated, the overall upward
industry pressure on wages is expected to result in an increase in our cost
base as we return to normal staffing levels.
With continued growth in revenue, we expect to deliver another cash generative
year, building on top of a year-end cash balance in excess of $60m.
Steve Brown
Chief Executive Officer
21 March 2022
Financial review
Commenting on the results, Fern MacDonald, Chief Financial Officer of accesso,
said:
"We are extremely proud of our final results with 2021 representing a landmark
year for accesso as we delivered record performance across all our key
metrics. We move into 2022 with a strong balance sheet, a motivated team and a
hugely exciting market opportunity. The technology-based solutions for
ticketing, virtual queuing and food & beverage provided by accesso are now
firmly the expectation of consumers across our key markets."
Financial overview
During 2021 the Group delivered a record financial performance in all key
metrics as COVID-19 restrictions eased in our markets. Both revenue and cash
EBITDA performance were well ahead of our initial expectations.
Our customer venues began to reopen at full scale during the early parts of
2021. As a result, we benefited from high consumer demand and a continued
shift to purchasing in advance and online through our platforms. The deep
customer relationships built throughout the pandemic enabled us to hit the
ground running during 2021 and capture the significant uptick in demand for
our products.
The cost actions and structural realignment undertaken during 2020 enabled the
Group to be more operationally effective whilst driving higher levels of
profitability and cash generation. During 2021 the Group had a number of open
positions but made excellent progress in the year towards filling these
positions in a difficult market. Headcount did not scale as quickly as our
revenue activity due to a highly competitive job market and our selective
approach to hiring. This benefited cash EBITDA for the year and staff costs
will increase in 2022 as we see the full year impact of those hires as well as
continuing the investment in our workforce to drive growth.
We have largely assessed the performance of 2021 against 2019 due to the
impact of the pandemic on 2020. Whilst we provide 2020 comparators in the
tables presented below, we draw more meaningful and valuable analysis against
2019.
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 aborted acquisition or aborted sale 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 against businesses
that do not have the same acquisition history and equity award policy.
APMs include cash EBITDA, adjusted basic EPS, net cash, underlying
administrative expenditure and repeatable and non-repeatable revenue analysis
and are defined as follows:
· Cash EBITDA is defined as operating profit before the deduction of
amortisation, impairment of intangible assets, depreciation, acquisition
costs, deferred and contingent consideration linked to continued employment,
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, 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;
· Net cash is defined as available cash less borrowings;
· Underlying administrative expenses which is administrative expenses adjusted
to add back the cost of capitalised development expenditure and property lease
payments and remove amortisation, impairment of intangible assets,
depreciation, acquisition costs, deferred and contingent payments, 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 Group considers cash EBITDA, which disregards any benefit to the income
statement of capitalised development expenditure, as the principal operating
metric.
Key Financial Metrics
Revenue
Group revenue of $124.8m (2020: $56.1m; 2019 $117.2m) represents a record for
the Company and 6.5% growth on 2019 despite COVID-19 related interruption in
certain markets during the year. Throughout 2021 we have seen customers
increasingly engaged with utilising our technologies to address challenges
such as capacity restrictions, physical queues and difficulties in securing
staff. Our touchless technologies and ability to drive eCommerce ahead of
visitation reduces labour-intensive point-of-sale models and delivers an
enhanced guest experience. These technology-based solutions are now the
expectation of consumers across our key markets. We set out details of our
revenue by segment, geography and repeatable to non-repeatable analysis below.
Revenue on a segmental basis was as follows:
2021 2020 2019 Vs 2019
$000 $000 $000 %
Ticketing 65,877 36,603 58,237 13.1
Distribution 10,053 1,363 21,097 (52.3)
Ticketing and distribution 75,930 37,966 79,334 (4.3)
Queuing 32,888 8,348 25,208 30.5
Other guest experience 15,976 9,780 12,640 26.4
Guest experience 48,864 18,128 37,848 29.1
Total revenue 124,794 56,094 117,182 6.5
Ticketing and Distribution revenue was 4.3% down on 2019, despite a 13.1%
increase in ticketing, due to revenue reductions experienced in the lower
margin distribution business. The distribution business continues to be
largely dependent on the UK theatre sector and was significantly impacted by
mandated restrictions and disruption throughout the first 6 months of the year
and in December 2021. As a result, revenues were down 52.3% on 2019. Ticketing
delivered an excellent performance due to the Group's accesso Passport
eCommerce solution, a high margin transactional revenue stream which delivered
41.5% revenue growth on 2019.
During 2021 the Group went live with 64 new eCommerce ticketing clients
compared to 37 during 2020. We continue to identify a shift in consumer and
attraction behaviour towards pushing sales online, significantly benefiting
both accesso and its customers as spend per guest increases, operational costs
are reduced, and we gain additional insight into consumer behaviour through
data.
Guest Experience delivered revenue growth of 29.1% on 2019. Our accesso
LoQueue solution's transactional-based queuing products saw a period of
significant demand despite park attendance being 27.7% down on comparable
parks in 2019 due to COVID-19 related disruption to opening schedules and
capacity restrictions at certain points during the year. Park guests
purchasing an accesso LoQueue product at venues increased to 5.9% compared
with 3.4% in 2019. Consumer appetite for virtual queuing has increased
significantly and this has been further enabled by our Qsmart web-based
virtual queuing app helping to drive customer penetration and basket size.
During 2021 we implemented our Qsmart technology across a further 10 theme
park venues with 84.2% of the parks we serve now using our web-based virtual
queuing app. During 2021 we saw record transactional queuing volumes, several
successful pilots for virtual queuing solutions, significant enhancement to
existing customers' virtual queuing offerings and implementations at non theme
park attractions. This demonstrates that both our customers and end consumers
are embracing accesso technology. The Experience Engine business delivered a
solid performance, with revenues up 25.6% on 2019 due to continued confidence
in the bespoke professional services offerings, with large customers in the
ski, theme park and cruise ship markets using our services.
Revenue on a geographic and segmental basis was as follows:
2020 2019
2021
Primary geographic markets Ticketing Guest Ticketing Guest Ticketing and Distribution Guest
and Experience Group and Experience Group Experience Group
Distribution Distribution
$000 $000 $000 $000 $000 $000 $000 $000 $000
UK 14,939 2,179 17,118 4,380 848 5,228 25,500 2,047 27,547
Other Europe 1,443 1,808 3,251 1,177 649 1,826 1,859 2,185 4,044
Australia/South Pacific/Asia 3,219 1,318 4,537 1,663 750 2,413 2,942 768 3,710
USA and Canada 55,344 43,338 98,682 30,014 15,739 45,753 45,987 32,668 78,655
Central and South America 985 221 1,206 732 142 874 3,046 180 3,226
75,930 48,864 124,794 37,966 18,128 56,094 79,334 37,848 117,182
Our USA and Canadian based customers delivered a 25.5% increase in revenues on
2019 with excellent performance across multiple market verticals, despite
attractions in the state of California being shuttered through April 2021. The
exception to this strong performance was live entertainment which continues to
recover toward pre pandemic revenue levels.
Selling our eCommerce accesso Passport solution into the USA and Canadian ski
market continues to be one of the Group's medium-term strategic priorities. In
2021, 16 customers adopted eCommerce in this market to excellent mutual
benefit, helping to drive incremental revenues to our Ticketing and
Distribution segment. At 31 December 2021 approximately one third of our ski
customers also use accesso Passport.
Despite a difficult start to 2021, our live entertainment customers in the USA
have shown encouraging volumes from June 2021 onwards, finishing the year
24.5% behind 2019. This was largely due to disrupted trading during the first
half of the year. We also went live with 28 accesso ShoWare(SM) new customers
during 2021 (29: 2020).
In the UK, outdoor attractions reopened from April 2021 and demonstrated
encouraging transactional volumes for the year. Live entertainment remained
closed for the majority of the first half of 2021, opening with partial
capacities from May 2021 and then at full capacities from July 2021,
delivering encouraging volumes through November. The key month of December for
UK based live entertainment was impacted by Omicron disruption with many shows
being cancelled at short notice, these conditions resulted in a significant
revenue reduction of $11.0m compared to 2019 in our Ingresso business. Other
European countries mandated countrywide closures during April and May 2021
while Central and South America experienced a number of restrictions
throughout the year that significantly hampered their ability to trade,
resulting in both these regions underperforming relative to 2019.
Australia, Asia and the South Pacific was able to deliver revenues of $4.5m,
up from $3.7m in 2019. The Australian region saw excellent performance from
accesso LoQueue, accesso Passport and TE2, despite Australia being in a
state-wide lockdown from July to October 2021. Whilst the impact was minimised
due to this period coinciding with the region's off-peak season, it
significantly impacted volumes during that 4-month period.
Revenue quality
2021 2020 2019
$000 $000 % $000 %
Virtual queuing 32,888 7,407 344.0 24,687 33.2
Ticketing and eCommerce 58,537 23,157 152.8 60,909 (3.9)
Reservation revenue 4,073 726 461.0 - 100
Transactional revenue 95,498 31,290 205.2 85,596 11.6
Maintenance and support 7,281 7,711 (5.6) 8,742 (16.7)
Platform fees 2,592 2,263 14.5 1,149 125.6
Total repeatable 105,371 41,264 155.4 95,487 10.4
Licence revenue 2,162 2,322 (6.9) 3,496 (38.2)
Professional services 13,469 9,954 35.3 14,787 (8.9)
Non-repeatable revenue 15,631 12,276 27.3 18,283 (14.5)
Hardware 2,704 1,493 81.1 2,499 8.2
Other 1,088 1,061 2.5 913 19.2
Other revenue 3,792 2,554 48.5 3,412 11.1
Total revenue 124,794 56,094 122.5 117,182 6.5
Total repeatable as % of total 84.4% 73.6% 81.5%
The above is an analysis of the Group's revenue by type. Transactional revenue
consisting of Virtual Queuing, Ticketing and eCommerce is defined as revenue
earned as either a fixed amount per sale of an item, such as a ticket sold by
a customer or as a percentage of revenue generated by a venue operator.
Normally this revenue is repeatable where a multi-year agreement exists and
purchasing patterns by venue guests do not significantly change, as they did
in 2020 as a result of the pandemic. Other repeatable revenue is defined as
revenue, excluding transactional revenue, that is expected to be earned
through each year of a customer's agreement, without the need for additional
sales activity, such as maintenance and support revenue. Repeatable revenue
has grown as a percentage of overall revenue to 84.4% (2020: 73.6%, 2019:
81.5%). 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 exceptional performance
during 2021 to $95.5m, up 11.6% on a normal period of trading represented by
2019. This was despite some disruption across our geographies at various
points of the year as well as the continued impact of the pandemic on the live
entertainment industry globally.
Demand for ticketing eCommerce and virtual queuing products has been extremely
high during the year despite regionalised restrictions, owing to an increased
appetite for technology-based solutions. We have also benefited from latent
demand and a shift in consumer behaviour to purchasing online. This has been
welcomed by our attraction operators as it enables them to manage and monitor
capacities, remove physical queues, reduce labour costs at payment terminals,
maximise basket size and gain deeper consumer insights. During the year we
have derived transactional revenue of $4.1m from online reservation fees which
we do not expect to recur at the same level in future periods.
Professional services revenue performed ahead of our budget and 2020, a credit
to our exceptional team which continued to deliver excellent bespoke solutions
to the ski, cruise and attractions markets. Levels are 8.9% below the 2019
year which included some significant custom development projects. 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 to $2.6m, above
2019 and 2020. We have seen increased demand for contactless technology such
as our mobile food and beverage apps which both reduce physical contact points
and help our attraction operators to remove labour costs.
The period also benefited from $2.7m of hardware sales following a $1.4m sale
of Prism 2 wristbands which helped us deliver accesso LoQueue transactional
revenue. Hardware sales also included equipment related to the addition of 24
new implementations for attractions utilising our accesso Siriusware point of
sale systems.
Gross margin
Management has reviewed how costs are allocated between administrative
expenses and cost of sales. In order to give a clearer and more meaningful
picture of activity within the business, server costs linked to the delivery
of revenue, previously shown within administrative costs have been
reclassified to cost of sales in 2021.
The Group's reported gross profit margin of 77.2% is an improvement on 73.8%%
and 72.1% achieved in 2020 and 2019 when adjusted for $1.6m and $1.2m of
server costs to aid comparability respectively. This 5.1% gross margin
increase is largely a result of the change in sales mix compared with 2019.
Our lower margin distribution business represented just 2.5% of our gross
profit compared to 5.1% in 2019 while higher margin streams such as virtual
queuing, ticketing and eCommerce, maintenance and support and platform fees
are proportionately greater. The accesso LoQueue solution generated an
improved margin of 71.6%, compared to 63.6% in 2019, this was partly due to
some labour shortages at points in the year but more importantly a number of
our larger theme park customers adopting our virtual queuing web app, instead
of our hardware wrist device, which can be delivered at improved gross
margins.
Administrative expenses
Underlying administrative expenditure increased by 23.3% to $69.7m on 2020 due
to a combination of factors; the most significant being the Group's headcount
increasing from 458 to 513 (excluding seasonal staff). The Group recruited
heavily during the year to capture the available revenue opportunities in a
highly competitive job market where salaries have also increased significantly
in the technology sector. During 2020, the Group implemented temporary cost
reduction plans with staff working four-day weeks, following the onset of the
pandemic in April 2020, with staff returning to full work schedules by the end
of 2020. Furthermore, we have experienced a very gradual return in the second
half of the year of typical activities such as trade shows and business
travel, albeit still at very low levels across the whole year.
Reported administrative expenses increased 13.0% to $82.9m in 2021 but
remained 6.1% lower than 2019, excluding the $53.6m impairment of intangibles.
Share-based payment costs increased on 2020 to $2.5m, reflective of key
management incentive arrangements being granted in both 2020 and 2021 and an
all-other staff share-based payment award granted in July 2021.
During the year 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 $268k reduction in
property lease payments in 2021 relative to 2020. On an annual basis we expect
this to save the Group $0.5m in property lease payments.
No government assistance has been received during 2021 or beyond.
2021 2020 2019
$000 $000 $000
Administrative expenses as reported 82,872 73,339 141,906
Capitalised development expenditure (1) 720 2,969 21,064
Deferred equity-settled acquisition consideration - (150) (1,416)
Amortisation related to acquired intangibles (2,371) (2,573) (11,286)
Share-based payments (2,490) (1,398) (1,845)
Amortisation and depreciation (2) (12,183) (14,664) (16,014)
Property lease payments not in administrative expense (1) 1,408 1,622 1,451
Reversal of impairment /(impairment of) intangibles 1,707 (2,627) (53,617)
Professional services cost (3) - - (6,723)
Underlying administrative expenditure 69,663 56,518 73,520
(1) See consolidated cash flow statement.
(2) This excludes acquired intangibles but includes depreciation on right of use
assets.
(3) The 2019 underlying administrative expense has been adjusted for professional
service costs incurred in the delivery of professional services to be
comparable with 2021 and 2020.
Cash EBITDA
The Group delivered record cash EBITDA for the year of $28.1m, a $21.0m
increase from $7.1m recorded in 2019. This increase is a result of 6.5%
revenue growth at higher gross margins relative to 2019, improved productivity
and efficiencies and headcount recovery lagging behind revenue recovery. The
latter was made more challenging by an extremely competitive job market in our
key regions. We have made excellent progress securing key positions throughout
2021 and finished the year with approximately 30 open positions.
The table below sets out a reconciliation between statutory operating
profit/(loss) and cash EBITDA:
2021 2020 2019
$000 $000 $000
Operating profit/(loss) 13,521 (30,354) (56,278)
Add: Aborted sale/acquisition expenses - 461 305
Add: Deferred equity-settled acquisition consideration - 150 1,416
Add: Amortisation related to acquired intangibles 2,371 2,573 11,286
Add: Share-based payments 2,490 1,398 1,845
(Deduct)/Add: (Reversal of impairment)/impairment of intangible assets 2,627 53,617
(1,707)
Add: Amortisation and depreciation (excluding acquired intangibles) 12,183 14,664 16,014
Capitalised internal development costs paid in cash (720) (2,969) (21,064)
Cash EBITDA 28,138 (11,450) 7,141
The Group recorded an operating profit of $13.5m in 2021 (2019 operating loss:
$56.3m); and adjusted basic earnings per share increased to 61.10 cents (2020:
Loss per share of 60.64 cents; 2019: earnings per share of 30.78 cents).
Development expenditure
2021 2020 2019
$000 $000 $000
Total development expenditure 34,666 21,157 33,545
% of total revenue 27.8% 37.7% 28.6%
Our engineering and product teams were reorganised at the end of 2020 into two
teams serving all our products, spanning the operating segments of the
business. This reorganisation is enabling us to cross-pollinate best practice,
drive innovation, and take our product integration to the next level.
Therefore, we no longer present development expenditure by segment as the
information is no longer relevant. 2021 has been a tremendous 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 mobile food and beverage purchasing. Our total
development expenditure for 2021 increased to $34.7m, 39.0% higher than 2020
due to the impact of 4-day working weeks and furloughs in 2020 in response to
the pandemic. The 3.3% increase relative to 2019, a more typical period, is
reflective of the business driving towards full staff levels as revenues
recover combined with the significant wage pressure over the past 2 years.
The Group capitalises elements of development expenditure where it is
appropriate and in accordance with IAS 38 Intangible Assets. Capitalised
development expenditure of $0.7m (2020: $3.0m), representing 2.1% (2020:
14.0%) of total development expenditure. This decrease in the proportion of
development expenditure being capitalised is not a reflection of lesser
importance of the work being undertaken, it has been critical in order 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 increased to $64.1m from 31 December
2020.
2021 2020
$000 $000
Borrowings (including capitalised finance costs) - (26,699)
Less: Cash in hand & at bank 64,050 56,355
Net cash 64,050 29,656
This strong net cash position has benefited from net cash inflow operating
activities of $39.1m (2020 Net outflow of $14.5m) delivered by a period of
exceptional revenue performance in our high margin accesso Passport and
accesso LoQueue business and diligent working capital management.
The Group's 31 December 2020 year-end drawn borrowing facility of $26.7m was
settled on 19 March 2021 following a successful refinancing of its lending
facilities with Investec Bank plc at a total cost of $0.7m in fees. The Group
has a 3-year, £18m Coronavirus Large Business 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 and all covenants have been met.
The Group's increase in trade and other payables cash flow of $16.2m is a
result of the business activities resuming to more typical trading levels
pre-pandemic with trade and other payables increasing to $29.2m, in line with
that as at 31 December 2019, reversing the $14.4m outflow in 2020. As at 31
December 2020 many elements of our business were severely impacted by
government mandated restrictions, most of which were removed by December 2021.
Dividend
The Board maintains its consistent view that the payment of a dividend is
unlikely in the short to medium term with surplus cash more efficiently
invested in strategic product development or, where the opportunities arise,
value accretive acquisitions.
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 which resulted in no impairment charges being
recorded.
Reversal of impairment of TE2 intangible assets
As of 31 December 2021, the recoverable value of TE2 was significantly
improved following a period of strong trading, improved cost control and
efficiency of the cash generating unit. A review was conducted of the $29.2m
of intangible assets impaired in 2019, updated to 31 December 2021 based on
their original useful economic lives (periods of 2-5 years). Each category of
asset was assessed as at 31 December 2021 to determine if they remain in
existence and are generating economic returns. As a result of this
reassessment, $1.0m of development costs, $0.3m of acquired customer
relationships and $0.5m of acquired intellectual property was reversed with a
credit of $1.7m to administrative expense.
Taxation
The tax credit of $9.9m represents an effective tax rate on the $12.1m of
statutory profit before tax (2020: Loss of $32.9m) of 81.8% (2019: 9.2%).
The key reconciling items to actual tax rates is $12.6m of previously
unrecognised deferred tax asset on US losses and US tax credits being
available for recognition in the year due to the ability to forecast
profitability to utilise these losses and tax credits. This includes $2.4m of
pre-acquisition losses of Blazer and Flips Flops Inc which were previously
unrecognised during 2021, after concluding that these losses transfer and are
available to utilise. There is a further $0.2m of other items that reconcile
the tax credit back to the Group's principal US tax rate where the majority of
the Group's earnings are derived. $47.0m of gross US losses and tax credits
are now recognised following a year of high profitability and the
demonstration that these tax savings can be utilised, $3.6m of gross US tax
credits, $0.9m net, remain unrecognised as a result of uncertain tax
provisions.
Going concern
The financial statements have been prepared on a going concern basis which the
Directors consider to be appropriate for the following reasons.
The Directors have prepared cash flow forecasts for the going concern period,
which indicate that, taking account of severe but plausible downsides, the
Group will have sufficient funds to meet the liabilities of the Group as they
fall due for that period. The Group's severe but plausible downside scenario
models revenue of $97.7m for 2022 and a marginal increase thereafter and
reduces underlying administrative spend to $66.0m and a marginal increase
thereafter for the same corresponding periods to reflect cost cutting measures
that would be implemented. During the 2020 pandemic year the Group was able to
reduce its underlying administrative expense to $56.5m (see page 21). The
severe but plausible downside scenario indicates that the Group's cash balance
reaches a low point of $51.4m and does not utilise any of its £18m loan
facility.
At 31 December 2021 the Group has cash of $64.1m and an available undrawn loan
facility of £18m. Covenants on the undrawn facility were passed during 2021
and are forecast to be passed through the going concern period.
Consequently, the Directors are confident that the Group and Company will have
sufficient funds to continue to meet its liabilities as they fall due for the
assessment period being at least 12 months from the date of signing and
therefore have prepared the financial statements on a going concern basis.
On behalf of the Board:
Fern MacDonald
Chief Financial Officer
21 March 2022
Consolidated statement of comprehensive income
for the financial year ended 31 December 2021
2021 2020
Notes $000 $000
Revenue 124,794 56,094
Cost of sales (28,401) (13,109)
Gross profit 96,393 42,985
(82,872) (73,339)
Administrative expenses
Operating profit/(loss) before reversal of impairment of intangible assets 11,814 (27,727)
Reversal of impairment of intangible assets 1,707 -
Impairment of intangible assets - (2,627)
Operating profit/(loss) 13,521 (30,354)
Finance expense (1,450) (2,518)
Finance income 39 10
Profit/(loss) before tax 12,110 (32,862)
Income tax benefit 8 9,908 3,008
Profit/(loss) for the period 22,018 (29,854)
Other comprehensive (loss)/income
Items that will be reclassified to income statement
Exchange differences on translating foreign operations (219) 4,910
Income tax credit on items recorded in other comprehensive income 188 1,129
(31) 6,039
Total comprehensive income/(loss) 21,987 (23,815)
All profit and comprehensive income is attributable to the owners of the
parent
Earnings/(losses) per share expressed in cents per share:
Basic 9 53.39 (84.78)
Diluted 9 51.45 (84.78)
All activities of the Company are classified as continuing
Consolidated statement of financial position
as at 31 December 2021
Registered Number: 03959429 31 December 2021 31 December 2020
Notes $000 $000
Assets
Non-current assets
Intangible assets 10 120,088 129,503
Property, plant and equipment 2,236 2,439
Right of use assets 3,053 4,166
Contract assets 375 1,109
Deferred tax assets 8 16,260 7,701
142,012 144,918
Current assets
Inventories 286 1,927
Contract assets 3,614 3,404
Trade and other receivables 18,805 15,968
Income tax receivable 1,097 1,858
Cash and cash equivalents 64,050 56,355
87,852 79,512
Liabilities
Current liabilities
Trade and other payables 29,219 17,328
Derivative financial liabilities - 758
Lease liabilities 1,003 1,163
Contract liabilities 8,063 7,525
Income tax payable 503 667
38,788 27,441
Net current assets 49,064 52,071
Non-current liabilities
Deferred tax liabilities 8 4,236 7,580
Contract liabilities 914 1,303
Lease liabilities 2,733 3,790
Borrowings - 26,699
7,883 39,372
Total liabilities 46,671 66,813
Net assets 183,193 157,617
Shareholders' equity
Called up share capital 11 596 595
Share premium 153,504 153,327
Retained earnings 9,753 (15,864)
Merger relief reserve 19,641 19,641
Translation reserve (301) (82)
Total shareholders' equity 183,193 157,617
Consolidated statement of cash flow
for the financial year ended 31 December 2021
2021 2020
Notes $000 $000
Cash flows from operations
Profit/(loss) for the period 22,018 (29,854)
Adjustments for:
Depreciation (excluding leased assets) 1,827 1,758
Depreciation on leased assets 1,035 1,461
Amortisation on acquired intangibles 10 2,373 2,573
Amortisation on development costs and other intangibles 10 9,319 11,446
Impairment of intangibles - 2,627
Reversal of impairment of intangible assets 10 (1,707) -
Loss on disposal of property, plant and equipment 2 22
Share-based payment 2,490 1,398
Deferred consideration charge - 150
Finance expense 1,450 2,518
Finance income (39) (10)
Foreign exchange gain 312 1,308
Income tax benefit 8 (9,908) (3,008)
RDEC tax credits (81) (384)
29,091 (7,995)
Decrease/(increase) in inventories 861 (923)
(Increase)/decrease in trade and other receivables (3,592) 6,658
(Decrease)/increase in contract assets/contract liabilities (3,316) 4,847
Increase/(decrease) in trade and other payables 16,241 (14,444)
Cash generated from/(used in) operations 39,285 (11,857)
Tax paid (171) (2,657)
Net cash inflow/(outflow) from operating activities 39,114 (14,514)
Cash flows from investing activities
Deferred consideration settlement (13) (477)
Capitalised internal development costs (720) (2,969)
Purchase of property, plant and equipment (960) (437)
Proceeds from sale of intangible assets 23 -
Interest received 28 6
Net cash used in investing activities (1,642) (3,877)
Cash flows from financing activities
Share issue 178 48,215
Share issue costs - (2,123)
Sale of shares held in trust - 198
Interest paid (514) (633)
Payments on property lease liabilities (1,408) (1,622)
Cash paid to refinance (813) -
Proceeds from borrowings - 10,116
Repayments of borrowings (27,033) -
Net forward FX contract settlement used to hedge share issue proceeds (409)
Net cash (utilised in)/generated from financing activities (29,999) 54,151
Increase in cash and cash equivalents 7,473 35,760
Cash and cash equivalents at beginning of year 56,355 16,205
Exchange gain on cash and cash equivalents 222 4,390
Cash and cash equivalents at end of year 64,050 56,355
Consolidated statement of changes in equity
for the financial year ended 31 December 2021
Share capital Share premium Retained Merger relief reserve Own shares held in trust Translation reserve Total
earnings
$000 $000 $000 $000 $000 $000 $000
595 153,327 (15,864) 19,641 - (82) 157,617
Balance at 1 January 2021
Comprehensive income for the year
Profit for period - - 22,018 - - - 22,018
Other comprehensive income
Exchange differences on translating foreign operations - - - - - (219) (219)
Income tax credit on items recorded in other comprehensive income - - 188 - - - 188
Total comprehensive income for the year - - 22,206 - - (219) 21,987
Issue of share capital 1 177 - - - - 178
Share-based payments - 2,490 - - - 2,490
Share option tax charge - deferred - - 921 - - - 921
Total contributions by and distributions by owners 1 177 3,411 - - - 3,589
Balance at 31 December 2021 596 153,504 9,753 19,641 - (301) 183,193
Balance at 1 January 2020 427 107,403 11,331 19,641 (665) (4,918) 133,219
Comprehensive income for the year
(Loss) for period - - (29,854) - - - (29,854)
Other comprehensive income
Exchange differences on translating foreign operations - - - - - 4,910 4,910
Income tax credit on items recorded in other comprehensive income 1,129 1,129
Total comprehensive income for the year - - (28,725) - - 4,910 (23,815)
Contributions by and distributions to owners
Issue of share capital 168 48,047 - - - - 48,215
Share issue costs - (2,123) - - - - (2,123)
Share-based payments - - 1,398 - - (74) 1,324
Equity-settled deferred consideration - - 150 - - - 150
Share option tax charge - deferred - - 50 - - - 50
Reduction of shares held in trust (68) 665 597
Total contributions by and distributions by owners 168 45,924 1,530 - 665 (74) 48,213
Balance at 31 December 2020 595 153,327 (15,864) 19,641 - (82) 157,617
Notes to the consolidated financial statements
for the financial year ended 31 December 2021
1. Reporting entity
accesso Technology Group plc is a public limited company incorporated in the
United Kingdom, whose shares are publicly traded on the AIM market. The
Company is domiciled in the United Kingdom and its registered address is Unit
5, The Pavilions, Ruscombe Park, Twyford, Berkshire RG10 9NN. This
consolidated financial information comprise the Company and its subsidiaries
(together referred to as the "Group").
The Group's principal activities are the development and application of
ticketing, mobile and eCommerce technologies, licensing and operation of
virtual queuing solutions and providing a personalised experience to customers
within the attractions and leisure industry. The eCommerce technologies are
generally licensed to operators of venues, enabling the online sale of
tickets, guest management, and point-of-sale ("POS") transactions. The virtual
queuing solutions and personalised experience platforms are installed by the
Group at a venue, and managed and operated by the Group directly or licensed
to the operator for their operation.
2. Basis of accounting
The preliminary results for the year ended 31 December 2021 and the results
for the year ended 31 December 2020 are prepared under International Financial
Reporting Standards and applicable law. The accounting policies adopted in
this preliminary announcement are consistent with the Annual Report for the
year ended 31 December 2021.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2021 or 2020 but is derived
from those accounts. Statutory accounts for 2020 have been delivered to the
registrar of companies, and those for 2021 will be delivered in due course.
The auditor has reported on those accounts; their reports were (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.
While the financial information included in this announcement has been
prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRS), this announcement does not
itself contain sufficient information to comply with IFRS.
The Group's consolidated financial statements have been prepared in accordance
with IFRS. They were authorised for issue by the Company's board of directors
on 21 March 2022.
Details of the Group's accounting policies are included in notes 3 and 4.
3. Changes to significant accounting policies
Other new standards and improvements
Other than as described below, the accounting policies, presentation and
methods of calculation adopted are consistent with those of the Annual Report
and Accounts for the year ended 31 December 2020, apart from standards,
amendments to or interpretations of published standards adopted during the
period.
The following standards, interpretations and amendments to existing standards
are now effective and have been adopted by the Group. The impacts of applying
these policies are not considered material:
- Amendments to References to the Conceptual Framework in IFRS Standards -
Amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37,
IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32 to update those
pronouncements with regard to the revised the Conceptual Framework.
- Amendments to IFRS 3 "Business Combinations", clarifies the definition of a
business in acquisitions.
- Amendments to IAS 1 and IAS 8: guidance on the definition of material.
- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 16 and IFRS 4: Interest rate
benchmark reforms. Phase 1 covers hedge accounting impacts and discontinuance
exemptions.
- Annual Improvements cycle 2018-2020 includes relevant amendments clarifying
capitalisation of transaction fees/inclusion of specific fees in
modification/extinguishment test within IFRS 9 Financial Instruments.
- Amendments to IFRS 3 "Business combinations", IAS 16 "Property, plant and
equipment" and IAS 37 "Provisions, Contingent assets and Contingent
liabilities".
New standards and interpretations not yet adopted
A number of new standards, amendments to standards, and interpretations are
either not effective for 2022 or not relevant to the Group, and therefore have
not been applied in preparing these accounts.
4. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial
information are set out below. The policies have been consistently applied to
all the periods presented.
Basis of consolidation
The consolidated financial statements incorporate the results of accesso
Technology Group plc and all of its subsidiary undertakings as at 31 December
2021 using the acquisition method. Subsidiaries are all entities over which
the Group has the ability to affect the returns of the entity and has the
rights to variable returns from its involvement with the entity. The results
of subsidiary undertakings are included from the date of acquisition.
The acquisition of subsidiaries is accounted for using the acquisition method.
The cost of the acquisition is measured at the aggregate of the fair value, at
the date of exchange, of assets given, liabilities incurred or assumed, and
equity instruments issued by the Group in exchange for control of the
acquiree. Any costs directly attributable to the business combination are
written off to the Group income statement in the period incurred. The
acquiree's identifiable assets, liabilities, and contingent liabilities that
meet the conditions under IFRS 3 are recognised at their fair value at the
acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially
measured at cost, being the excess of the cost of the business combination
over the Group's interest in the net fair value of the identifiable assets,
liabilities, and contingent liabilities recognised.
Investments, including the shares in subsidiary companies held as fixed
assets, are stated at cost less any provision for impairment in value. Where
necessary, adjustments are made to the financial statements of subsidiaries to
bring the accounting policies used in line with those used by the Group.
Lo-Q (Trustees) Limited, a subsidiary company that holds an employee benefit
trust on behalf of accesso Technology Group plc, is under control of the Board
of directors and hence has been consolidated into the Group results.
All intra-Group transactions, balances, income and expenses are eliminated on
consolidation.
Going concern
The financial information has been prepared on a going concern basis which the
Directors consider to be appropriate for the following reasons.
The Directors have prepared cash flow forecasts for the going concern period,
which indicate that, taking account of severe but plausible downsides, the
Group will have sufficient funds to meet the liabilities of the Group as they
fall due for that period. The Group's severe but plausible downside scenario
models revenue of $97.7m for 2022 and a marginal increase thereafter and
reduces underlying administrative spend to $66.0m and marginal increase
thereafter for the same corresponding periods to reflect cost cutting measures
that would be implemented. During the 2020 pandemic year the Group was able to
reduce its underlying administrative expense to $56.5m. The severe but
plausible downside scenario indicates that the Group's cash balance reaches a
low point of $51.4m and does not utilise any of its £18m loan facility.
At 31 December 2021 the Group has cash of $64.1m and an available undrawn loan
facility of £18m. Covenants on the undrawn facility were passed during 2021
and are forecast to be passed through the going concern period.
Consequently, the Directors are confident that the Group and Company will have
sufficient funds to continue to meet its liabilities as they fall due for the
assessment period being at least 12 months from the date of signing and
therefore have prepared the financial information on a going concern basis.
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated into the respective
functional currencies of Group companies at the rates ruling when the
transactions occur.
Monetary assets and liabilities denominated in foreign currency are translated
into the functional currency at the exchange rate at the reporting date.
Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange
rate when the fair value was determined. Non-monetary items that are measured
based on historical cost in a foreign currency are translated at the exchange
rate at the date of the transaction.
Foreign operations
The assets and liabilities of foreign operations, including goodwill, are
translated into USD at the exchange rates at the reporting date. The income
and expenses of foreign operations are translated into USD at the rates ruling
when the transactions occur, or appropriate averages.
Foreign currency differences on translating the opening net assets at an
opening rate and the results of operations at actual rates are recognised in
other comprehensive income and accumulated in the translation reserve.
Retranslation differences recognised in other comprehensive income will be
reclassified to profit or loss in the event of a disposal of the business, or
the Group no longer has control or significant influence.
Revenue from contracts with customers
IFRS 15 provides a single, principles based five step model to be applied to
all sales contracts as outlined below. It is based on the transfer of control
of goods and services to customers and replaces the separate models for goods
and services.
1. Identify the contract(s) with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in
the contract
5. Recognise revenue when or as the entity satisfies its performance
obligations.
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be measured reliably. The
following table provides information about the nature and timing of the
satisfaction of performance obligations in contracts with customers, including
significant payment terms, and the related revenue recognition policies.
Type of product/service/ Segment Nature of the performance obligations and significant payment terms Accounting policy
a. Point-of-sale (POS) licences and support revenue - Ticketing and Each contract provides the customer with the right to use the POS license The transaction price is allocated using the residual approach, where the
distribution (installed on premise) for terms between one and three years. The customer support revenue is carved out of the total consideration using an estimate
also receives support for typically a period of one year. This support is not that best reflects its stand-alone selling price.
necessary for the functionality of the licence and is therefore a distinct
performance obligation from the right to use the POS licence. Revenue from sale of POS licenses is recognised at a point in time when the
customer has been provided with the software. Point in time recognition is
With agreements longer than one year, invoices are generated either quarterly appropriate because the licence provides the customer with the right of use of
or annually; usually payable within thirty days. the POS software as it exists and is fully functional from the date it is
provided to the customer.
Although payments are made over the term of the agreement, the agreement is
binding for the negotiated term. The total transaction price is payable over Support revenue is recognised on a straight-line basis over the term of the
the term of the agreement via the annual or quarterly instalments. contract, which in most cases is one year and is renewable at the option of
the customer thereafter.
The revenue recognition of POS licenses at a point in time gives rise to a
contract asset at inception. The balance reduces as the consideration is
billed annually/ quarterly in accordance with the agreement.
b. Software licences and the related maintenance and support revenue - Each contract provides the customer with the right to use the software license The transaction price is allocated using the residual approach, where the
Ticketing and distribution and Guest Experience (installed on premise) with annual support and maintenance. The support and annual support and maintenance revenue is carved out of the total
maintenance is not required to operate the software and is considered a consideration using an estimate that best reflects is stand-alone selling
distinct performance obligation from the right to use the software license. price.
The customer has an option to renew the license at no additional cost by Annual support and maintenance revenue is recognised on a straight-line basis
annually renewing support and maintenance at each anniversary. This is over the term of the contract, which in most cases is one year and is
considered a material right under IFRS 15 and represents a separate renewable at the option of the customer thereafter.
performance obligation.
Revenue from sale of annual software licenses is recognised at a point in time
Invoices are raised at the beginning of each contract for the software license when the customer has been provided with the software. The revenue is
and annual support and maintenance. Subsequently, invoices are raised at each recognised at a point in time because the licence provides the customer with
anniversary of the contract for annual support and maintenance (as software the right of use of the software as it exists and is fully functional from the
license is renewed at no additional cost). date it is provided to the customer.
Revenue from sale of multi-year software license contracts is spread as the
customer has the option to renew each year's licence at no additional cost by
paying the annual support and maintenance fee. A proportion of the license
payment is deferred and recognised at a future point in time when the customer
renews. The amount that is deferred is dependent on the term of the
contract. For example: on the inception of a three-year contract, two thirds
of the licence fee consideration would be deferred and released equally on the
first and second anniversary when the customer renews their maintenance and
support. Perpetual licences are recognised in the same manner, with the
exception being that the contract term is estimated to be five years.
If the customer chooses not to exercise the above option, any residual
deferred revenue would be recognised as income in that period.
The deferred revenue gives rise to a contract liability at the inception of
the contract. The balance reduces as revenue is recognised at each contract
anniversary.
Type of product/service Nature of the performance obligations and significant payment terms Accounting policy
c. Virtual queuing system - Guest Experience Virtual queuing systems are installed at a client's location, and revenue is IFRS 15 focuses on control of the goods or services. Management have
recognised when a park guest uses the service. The Group's performance determined that the Group is acting as the agent in all queuing contracts as
obligation is either to provide a licence to and maintain a system in the park it is the attractions who bring the guest to the parks, control hours of
or operate the system within the park and is contracted with the attraction operation and have influence over many aspects of the service we supply.
owner, not end consumer. accesso therefore only recognises its portion of the sale as revenue, rather
than the full amount of the guest payment which is paid to the attraction.
d. Ticketing and eCommerce revenue - Ticketing and distribution Revenue is recognised at the time the ticket is sold or the transaction takes Ticketing and eCommerce revenue is recognised at the time the ticket is sold
place. Invoices are issued monthly and generally payable within thirty days. through our platform or the transaction takes place. accesso recognises only
its fee for processing the transaction as the agent rather than the gross
ticket value.
e. Professional services - Ticketing and distribution and Guest Professional services revenue is typically providing customised software Bespoke professional services work is recognised over time where the Group has
Experience development and in general is agreed with the customer and billed at each enforceable rights to revenue in the event of cancellation.
month end. Certain contracts span longer time periods whereby the Group
carries out customisation and delivers software releases to customers at The Group recognises revenue over time using the input method (hours/total
predetermined milestones. budgeted hours) when this method best depicts the Group's performance of
transferring control.
For certain customers the output method is adopted where the Group's right to
consideration corresponds directly with the completed monthly performance
obligation, revenue for these customers is recognised in line with the amount
of revenue the Group is entitled to invoice.
f. Hardware sales - Ticketing and distribution and Guest Experience On certain contracts, customers request that the Group procures hardware on This revenue is recognised at the point the customer obtains control of the
their behalf which the Group has determined to be a distinct performance hardware which is considered to be the point of delivery when legal title
obligation. passes. accesso takes control and risk of ownership on hardware procurement
and recognises sales and costs on a gross basis as principal.
g. Platform fees Cloud-based experience management platform systems are used by certain venues Revenue is billed monthly and recognised over time as the performance
to provide customer relationship management, guest personalisation, payment obligations of hosting and supporting the secure platforms are provided to the
and ordering services, push notifications, scheduling, offers, location-based venues.
services, consumer-facing screens and many other services to end users at
attractions. These secure platforms are provided to venues together with
support under annual contracts.
Type of product/service Nature of the performance obligations and significant payment terms Accounting policy
c. Virtual queuing system - Guest Experience Virtual queuing systems are installed at a client's location, and revenue is IFRS 15 focuses on control of the goods or services. Management have
recognised when a park guest uses the service. The Group's performance determined that the Group is acting as the agent in all queuing contracts as
obligation is either to provide a licence to and maintain a system in the park it is the attractions who bring the guest to the parks, control hours of
or operate the system within the park and is contracted with the attraction operation and have influence over many aspects of the service we supply.
owner, not end consumer. accesso therefore only recognises its portion of the sale as revenue, rather
than the full amount of the guest payment which is paid to the attraction.
d. Ticketing and eCommerce revenue - Ticketing and distribution Revenue is recognised at the time the ticket is sold or the transaction takes Ticketing and eCommerce revenue is recognised at the time the ticket is sold
place. Invoices are issued monthly and generally payable within thirty days. through our platform or the transaction takes place. accesso recognises only
its fee for processing the transaction as the agent rather than the gross
ticket value.
e. Professional services - Ticketing and distribution and Guest Professional services revenue is typically providing customised software Bespoke professional services work is recognised over time where the Group has
Experience development and in general is agreed with the customer and billed at each enforceable rights to revenue in the event of cancellation.
month end. Certain contracts span longer time periods whereby the Group
carries out customisation and delivers software releases to customers at The Group recognises revenue over time using the input method (hours/total
predetermined milestones. budgeted hours) when this method best depicts the Group's performance of
transferring control.
For certain customers the output method is adopted where the Group's right to
consideration corresponds directly with the completed monthly performance
obligation, revenue for these customers is recognised in line with the amount
of revenue the Group is entitled to invoice.
f. Hardware sales - Ticketing and distribution and Guest Experience On certain contracts, customers request that the Group procures hardware on This revenue is recognised at the point the customer obtains control of the
their behalf which the Group has determined to be a distinct performance hardware which is considered to be the point of delivery when legal title
obligation. passes. accesso takes control and risk of ownership on hardware procurement
and recognises sales and costs on a gross basis as principal.
g. Platform fees Cloud-based experience management platform systems are used by certain venues Revenue is billed monthly and recognised over time as the performance
to provide customer relationship management, guest personalisation, payment obligations of hosting and supporting the secure platforms are provided to the
and ordering services, push notifications, scheduling, offers, location-based venues.
services, consumer-facing screens and many other services to end users at
attractions. These secure platforms are provided to venues together with
support under annual contracts.
Contract assets and contract liabilities
Contract assets represent licence fees which have been recognised at a point
in time but where the consideration is contractually payable over time,
professional service revenue whereby control has been passed to the customer
and deferred contract commissions incurred in obtaining a contract which are
recognised in line with the recognition of the revenue. Contract assets for
point in time licence fees and unbilled professional service revenue represent
financial assets and are considered for impairment on an expected credit loss
model, these assets have historically had immaterial levels of bad debt and
are with credit worthy customers, and consequently the Group has not
recognised any impairment provision against them.
Contract liabilities represent discounted renewal options on licence
arrangements whereby a customer has the right to renew their licence at a full
discount subject to the payment of annual support and or maintenance fees on
each anniversary of the contract. Contract liabilities are recognised as
income when a customer exercises their renewal right on each anniversary of
the contract and pays their annual maintenance and support. In the situation
of a customer terminating their contract all unexercised deferred renewal
rights would be recognised as income, representing a lapse of the renewal
right options. The licence fees related to these contract liabilities are
non-refundable.
Where these assets or liabilities mature in periods beyond 12 months of the
balance sheet date they are recognised within non-current assets or
non-current liabilities as appropriate.
Interest expense recognition
Expense is recognised as interest accrues, using the effective interest
method, to the net carrying amount of the financial liability.
Employee benefits
Share-based payment arrangements
The Group issues equity-settled share-based payments to full-time employees.
Equity-settled share-based payments are measured at the fair value at the date
of grant, with the expense recognised over the vesting period, with a
corresponding increase in equity. The amount recognised as an expense is
adjusted to reflect the Group's estimate of shares that will eventually vest,
such that the amount recognised is based on the number of awards that meet the
service and non-market performance conditions at the vesting date.
The fair value of our share awards with time-based and employment conditions
are measured by use of a Black-Scholes model, and share options issued under
the Long-Term Incentive Plan (LTIP) are measured using the Monte Carlo method,
due to the market-based conditions upon which vesting is dependent. The
expected life used in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise restrictions, and
behavioural considerations.
The LTIP awards contain market-based vesting conditions where they have been
set. Market vesting conditions are factored into the fair value of the options
granted. As long as all other vesting conditions are satisfied, a charge is
made irrespective of whether the market vesting conditions are satisfied. The
cumulative expense is not adjusted for failure to achieve a market vesting
condition or where a non-vesting condition is not satisfied.
LTIP awards granted in 2020 included continued employment conditions only due
to the unprecedented market instability, before being modified on 12 February
2021 by the Remuneration Committee to include a market-based total shareholder
return condition and cash EBITDA non-market-based conditions. The fair value
of these LTIP share awards were initially valued by use of a Black-Scholes
model due to them including only continued employment conditions. On their
modification they were reassessed using a Monte Carlo method, due to the
market-based conditions upon which vesting is dependent, this resulted in a
fair value below that on which the awards were initially granted, as such the
fair value was not reduced in line with IFRS 2 Share-based payments and they
continue to be recognised at their original grant date fair value.
Pension costs
Contributions to the Group's defined contribution pension schemes are charged
to the consolidated statement of comprehensive income in the period in which
they become due.
Property, plant and equipment
Items of property, plant and equipment are stated at cost of acquisition or
production cost less accumulated depreciation and impairment losses.
Depreciation is charged to write off the cost of assets, less residual value,
over their estimated useful lives, using the straight-line method, on the
following bases:
Plant, machinery, and office equipment 20 - 33.3%
Installed systems 25 - 33.3%, or life of contract
Furniture and fixtures 20%
Leasehold Improvements Shorter of useful life of the asset or time remaining within the lease
contract
Inventories
The Group's inventories consist of parts used in the manufacture and
maintenance of its virtual queuing product, along with peripheral items that
enable the product to function within a park.
Inventories are valued at the lower of cost and net realisable value, after
making due allowance for obsolete and slow-moving items. Inventories are
calculated on a first-in, first-out basis.
Park installations are valued on the basis of the cost of inventory items and
labour plus attributable overheads. Net realisable value is based on estimated
selling price less additional costs to completion and disposal.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the Consolidated and Company statements of
financial position differs from its tax base, except for differences arising
on:
· the initial recognition of goodwill;
· the initial recognition of an asset or liability in a transaction which is not
abusiness combination and at the time of the transaction affects neither
accounting or taxable profit; and
· investments in subsidiaries and jointly controlled entities where the Group is
able to control the timing of the reversal of the difference and it is
probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the reporting date and are expected
to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· the same taxable Group company; or
· different Group entities which intend either to settle current tax assets and
liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts
of deferred tax assets or liabilities are expected to be settled or recovered.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the reporting date and are expected
to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· the same taxable Group company; or
· different Group entities which intend either to settle current tax assets and
liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts
of deferred tax assets or liabilities are expected to be settled or recovered.
Current income tax
The tax expense or benefit for the period comprises current and deferred tax.
Tax is recognised in the income statement, except to the extent that it
relates to items recognised in other comprehensive income or directly in
equity. In this case, the tax is also recognised in other comprehensive income
or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the balance sheet date in the countries
where the Company and its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities. See note 8 for further discussion on
provisions related to tax positions.
Goodwill and impairment of non-financial assets
Any excess of the cost of the business combination over the Group's interest
in the net fair value of the identifiable assets, liabilities and contingent
liabilities is recognised in the Consolidated Statement of Financial Position
as goodwill and is not amortised.
After initial recognition, goodwill is stated at cost less any accumulated
impairment losses, with the carrying value being reviewed for impairment at an
operating segment level before aggregation, at least annually and whenever
events or changes in circumstances indicate that the carrying value may be
impaired.
Where the recoverable amount of the cash-generating unit is less than its
carrying amount including goodwill, an impairment loss is recognised in the
Consolidated Statement of Profit or Loss.
Any non-financial assets other than goodwill which have suffered impairment
are reviewed for possible reversal of the impairment at each reporting date.
Assets that are subject to amortisation and depreciation are also reviewed for
any possible impairment at each reporting date.
Externally acquired intangible assets
Intangible assets are capitalised at cost and amortised to nil by equal
instalments over their estimated useful economic life.
Intangible assets are recognised on business combinations if they are
separable from the acquired entity. The amounts ascribed to such intangibles
are arrived at by using appropriate valuation techniques. The significant
intangibles recognised by the Group and their useful economic lives are as
follows:
· Trademarks over 10 years
· Patents over 20 years
· Customer relationships and supplier contracts over 1 to 15 years
· Acquired internally developed technology over 5 to 7 years
Internally generated intangible assets and research and development
Expenditure on internally developed products is capitalised if it can be
demonstrated that it is substantially enhancing an asset and:
· It is technically feasible to develop the product for it to be
sold;
· Adequate resources are available to complete the development;
· There is an intention to complete and sell the product;
· The Group is able to sell the product;
· Sale of the product will generate future economic benefits; and
· Expenditure on the project can be measured reliably.
In accordance with IAS 38 'Intangible Assets', expenditure incurred on
research and development is distinguished as either related to a research
phase or to a development phase. Development expenditure not satisfying the
above criteria and expenditure on the research phase of internal projects is
recognised in the Consolidated income statement as incurred.
Development expenditure is capitalised and amortised within administrative
expenses on a straight-line basis over its useful economic life between 3-5
years from the date the intangible asset goes into use. The amortisation
expense is included within administrative expenses in the Consolidated income
statement.
All advanced research phase expenditure is charged to the income statement.
For development expenditure, this is capitalised as an internally generated
intangible asset, only if it meets the criteria noted above. The Group has
contractual commitments for development costs of $nil (2020: $nil).
Acquired intellectual property rights and patents
Intellectual property rights comprise assets acquired, being external costs,
relating to know-how, patents, and licences. These assets have been
capitalised at the fair value of the assets acquired and are amortised within
administrative expenses on a straight-line basis over their estimated useful
economic life of 5 to 7 years.
Fair value of contingent consideration
Contingent consideration payable in cash in connection with acquisitions is
measured at its fair value as of the reporting date and classified as a
financial liability with subsequent re-measurement through profit and loss.
Equity-settled contingent consideration that results in either a fixed number
of equity instruments or no issue of equity where the employment condition is
not met is treated as equity-settled. Equity settled contingent consideration
is fair valued at the acquisition date, it is not re-measured at each
reporting date and its subsequent settlement is accounted for within equity.
Where cash or equity consideration is contingent on the continued employment
of the sellers the fair value of the expense is recognised as a remuneration
expense in the statement of comprehensive income over the deferral period,
where the employment condition does not apply and the consideration is in
respect of a business combination it is included within cost of investment.
Financial assets
The Group classifies all its financial assets into one of the following
categories, depending on the purpose for which the asset was acquired. The
Group's accounting policy for each category is as follows:
· Trade and loan receivables: Trade receivables are initially recognised by the
Group and carried at original invoice amount less an allowance for any
uncollectible or impaired amounts. An estimate for doubtful debts is made when
collection of the full amount is no longer probable. Debts are written off
when they are identified as being uncollectible. Contract assets and other
receivables are recognised at fair value. Loan receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an
active market. They arise principally through the provision of goods and
services to customers (trade receivables), but also incorporate other types of
contractual monetary asset. Impairment of a financial asset is recognised if
there is objective evidence that the balance will not be recovered.
· Cash and cash equivalents in the statement of financial position comprise cash
at bank, cash in hand and short-term deposits with an original maturity of
three months or less. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a component of
cash and cash equivalents for the purposes of the consolidated statement of
cash flow.
Financial liabilities
The Group treats its financial liabilities in accordance with the following
accounting policies:
· Trade payables and other short-term monetary liabilities are recognised at
fair value and subsequently at amortised cost.
· Bank borrowings and leases are initially recognised at fair value net of any
transaction costs directly attributable to the issue of the instrument. Such
interest-bearing liabilities are subsequently measured at amortised cost using
the effective interest rate method, which ensures that any interest expense
over the period to repayment is at a constant rate on the balance of the
liability carried in the statement of financial position. "Interest expense"
in this context includes initial transaction costs and premiums payable on
redemption, as well as any interest payable while the liability is
outstanding. For loan modifications the Group assesses if the loan can be
prepaid without significant penalty and if so no gain or loss is recognised in
the income statement at the date of the modification.
· Derivative financial liability - forward foreign currency contracts that are
out-of-money derivatives using period end exchange rates, relative to the
forward point exchange rate entered into by the Group on inception of the
agreement, are held as derivative financial liabilities. These level one
financial instruments are carried in the statement of financial position at
fair value with changes in fair value recognised in the consolidated statement
of comprehensive income in the finance expense line. Variation margin paid to
the counter party on these forward contracts has been offset against the
derivative financial liability in the Statement of Financial Position.
Employee benefit trust (EBT)
As the Company is deemed to have control of its EBT, it is treated as a
subsidiary and consolidated for the purposes of the consolidated financial
information. Within the Company balance sheet the EBT is accounted as an
investment held at cost less accumulated impairment. The EBT's assets (other
than investments in the Company's shares), liabilities, income, and expenses
are included on a line-by-line basis in the consolidated financial statements.
The EBT's investment in the Company's shares is deducted from equity in the
consolidated statement of financial position as if they were treasury shares.
Government grants
The Group received government support for payroll costs throughout the year
ended 31 December 2020 including the UK Coronavirus Job Retention Scheme and
equivalent schemes in Australia and Germany. Grants that compensate the Group
for expenses incurred are recognised in profit or loss as other income on a
systematic basis in the periods in which the expenses are recognised, unless
the conditions for receiving the grant are met after the related expenses have
been recognised. In this case, the grant is recognised when it becomes
receivable. No government support was received during the year ended 31
December 2021.
IFRS 16 Leases
The Group assesses whether a contract is or contains a lease. Under IFRS 16, a
contract is, or contains, a lease if the contract conveys a right to control
the use of an identified asset for a period of time in exchange for
consideration.
As a lessee
The Group leases commercial office space. The Group has elected not to
recognise right of use assets and lease liabilities for some leases of low
value. The Group recognises the lease payments associated with these leases as
an expense on a straight-line basis over the lease term.
The Group recognises a right-of-use asset and lease liability at the lease
commencement date.
The right of use asset and lease liability are initially measured at the
present value of the lease payments that are not paid at the commencement
date, discounting using the Group's incremental borrowing rate. Subsequently
the right of use asset is adjusted for impairment losses and adjusted for
certain remeasurements of the lease liability.
The lease liability is subsequently increased by the interest cost on the
lease liability and decreased by lease payments made. It is remeasured when
there is a change in future lease payments arising from a change in an index
or rate, a change in the estimate of the amount expected to be payable under a
residual value guarantee, or as appropriate, changes in the assessment of
whether a purchase or extension option is reasonably certain to be exercised
or a termination option is reasonably certain not to be exercised.
The Group has applied judgement to determine the lease term for some lease
contracts that include renewal options. The assessment of whether the Group is
reasonably certain to exercise such options impacts the lease term, which
significantly affects the amount of lease liabilities and right of use assets
recognised.
5. Functional and presentation currency
The presentation currency of the Group is US dollars (USD) in round thousands.
Items included in the financial statements of each of the Group's entities are
measured in the functional currency of each entity. The Group used the local
currency as the functional currency, including the parent Company, where the
functional currency is sterling. The Group's choice of presentation currency
reflects its significant dealings in that currency.
6. Critical judgments and key sources of estimation uncertainty
In preparing this consolidated financial information, the Group makes
judgements, estimates and assumptions concerning the future that impact the
application of policies and reported amounts of assets, liabilities, income
and expenses.
The resulting accounting estimates calculated using these judgements and
assumptions are based on historical experience and expectations of future
events and may not equal the actual results. Estimates and underlying
assumptions are reviewed on an ongoing basis, and revisions to estimates are
recognised prospectively.
The judgements and key sources of assumptions and estimation uncertainty that
have a significant effect on the amounts recognised in the financial
statements are discussed below.
Judgements
Information about judgements made in applying accounting policies that have
the most significant effects on the amounts recognised in these consolidated
financial information are below:
Capitalised development costs
The Group capitalises development costs in line with IAS 38 Intangible Assets.
Management applies judgement in determining if the costs meet the criteria and
are therefore eligible for capitalisation at the outset of a project, $0.72m
has been capitalised on new projects during 2021 (2020: $2.97m). Significant
judgements include the determination that assets have been substantially
enhanced, the technical feasibility of the development, recoverability of the
costs incurred, and economic viability of the product and potential market
available considering its current and future customers. See internally
generated intangible assets and research and development within note 4 for
details on the Group's capitalisation and amortisation policies, and
Intangible Assets, note 10, for the carrying value of capitalised development
costs.
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a
significant risk of resulting in material adjustments in the following year
are:
Useful economic lives of capitalised development costs
The Group amortises its capitalised development costs over 3-5 years as this
has been deemed by management to be the best reflection of the lifecycle of
their technology. If this useful economic life estimate were to be 4 or 6
years the impact on the current year amortisation would be $2,298k higher and
$1,534k lower respectively. Management will review this estimate each year to
ensure it is reflective of the technologies being developed.
Deferred tax asset on US losses and tax credits
The Group has recognised a deferred tax asset of $11.4m (which comprises $8.4m
of US losses ($1.7m of which expire in 2037) and $3.0m of US tax credits (with
20-year expiry dates ranging from 2033 and 2040). The recognition of these
assets is based on the expected profitability of the US entities using the
Group's 5-year Board approved forecasts and risk adjusted profitability
reducing annually by 10% which indicates that the losses would be utilised
over a 5-year period and the US tax credits over 10 years. The utilisation of
the losses can only offset 80% of the tax liability and US tax credits cannot
be used on the first $25k of tax liability up to a maximum of 25% of the
remaining current tax liability. The key inputs are not sensitive to plausible
changes in the assumptions, a further 10% risk adjustment was modelled across
the 15-year forecast period which results in the US losses being recovered
still in 5 years and the US credits in 11 years, within any loss or tax credit
expiry limits. The US losses were assessed under the section 382 US tax
legislation to validate they can be utilised, this assessment will need to be
conducted on an annual basis to determine if any restriction is required.
7. Business and geographical segments
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:
o accesso Passport ticketing suite using our hosted proprietary technology
offering to maximise up selling, cross selling and selling greater volumes.
o accesso Siriusware software solutions providing modules in ticketing &
admissions, memberships, reservations, resource scheduling, retail, food
service, gift cards, kiosks and eCommerce.
o The accesso ShoWare ticketing solution for box office, online, kiosk, mobile,
call centre and social media sales.
o 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:
o accesso LoQueue providing leading edge virtual queuing solutions to take
customers out of line, improve guest experience and increase revenue for theme
parks
o 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.
2021 2020
$000 $000
Ticketing and Distribution 75,930 37,966
Guest Experience 48,864 18,128
Total revenue 124,794 56,094
Ticketing and Distribution Guest Central unallocated
Experience costs Group
Year ended 31 December 2021 $000 $000 $000 $000
Cash EBITDA (*) 62,600 34,332 (68,794) 28,138
Capitalised development spend 720
Depreciation and amortisation (excluding acquired intangibles) (12,183)
Amortisation related to acquired intangibles (2,371)
Share-based payments (2,490)
Reversal of impairment of intangible assets 1,707
Finance income 39
Finance expense (1,450)
Profit before tax 12,110
Ticketing and Distribution Guest Central unallocated
Experience costs Group
Year ended 31 December 2020 $000 $000 $000 $000
Cash EBITDA (1) (2) 33,371 10,042 (54,863) (11,450)
Capitalised development spend 2,969
Depreciation and amortisation (excluding acquired intangibles) (14,664)
Aborted sale process costs (461)
Deferred and contingent payments (150)
Amortisation related to acquired intangibles (2,573)
Impairment related to TE2 (2,627)
Share-based payments (1,398)
Finance income 10
Finance expense (2,518)
Loss before tax (32,862)
(1) Cash EBITDA is calculated as operating profit before the deduction of
amortisation, impairment of intangible assets, depreciation, acquisition
costs, deferred and contingent payments, and costs related to share-based
payments but after capitalised development costs.
(2) During 2020 the Group structurally realigned their key functions of
Operations, Engineering, Product, Human Resources, Finance, Administration,
Commercial Sales and Marketing to have single teams spanning across the Group
and supporting the operating segments, from 1 January 2021 the Group no longer
attribute their related costs to the segments for management reporting
purposes. Consequently, our 31 December 2020 segment note has been restated to
reflect a consistent presentation with 31 December 2021.
The segments will be assessed as the Group develops and continues to make
acquisitions.
An analysis of the Group's external revenues and non-current assets (excluding
deferred tax and contract assets) by geographical location are detailed below:
Revenue Non-current assets
2021 2020 2021 2020
$000 $000 $000 $000
UK 17,118 5,228 24,826 26,866
Other Europe 3,251 1,826 18 10
Australia/South Pacific/Asia 4,537 2,413 109 255
USA and Canada 98,682 45,753 100,319 108,714
Central and South America 1,206 874 105 263
124,794 56,094 125,377 136,108
Revenue generated in each of the geographical locations is generally in the
local currency of the venue or operator based in that location.
Major customers
The Group has entered into agreements with theme parks, theme park groups, and
attractions to operate its technology in single or multiple theme parks or
attractions within the theme park group.
There are two park and attraction operators with which the Group has
contractual relationships with combined segmental revenues in excess of 10% of
the total Group revenue. The first park operator accounted for $10.1m (2020:
$5.4m) of Ticketing and Distribution revenue and for $25.2m (2020: $5.4m) of
Guest Experience revenue. The second park and attractions operator accounted
for $11.0m (2020: $5.0m) of Ticketing and Distribution revenue and for $3.8m
(2020: $0.9m) of Guest Experience revenue.
Another customer within the Guest Experience segment accounted for $9.3m of
Group revenue in 2021 (2020: $7.0m).
8. Tax
The table below provides an analysis of the tax charge for the periods ended
31 December 2021 and 31 December 2020:
2021 2020
$000 $000
UK corporation tax
Current tax on income for the period 975 352
Adjustment in respect of prior periods (49) (1,031)
926 (679)
Overseas tax
Current tax on income for the period 165 (531)
Adjustment in respect of prior periods (9) 415
156 (116)
Total current taxation 1,082 (795)
Deferred taxation
Original and reversal of temporary difference - for the current period (10,889) (2,218)
Impact on deferred tax rate changes 84 (255)
Original and reversal of temporary difference - for the prior period (185) 260
(10,990) (2,213)
Total taxation benefit (9,908) (3,008)
The differences between the actual tax charge for the period and the
theoretical amount that would arise using the applicable weighted average tax
rate are as follows:
2021 2020
$000 $000
Profit/(loss) on ordinary activities before tax 12,110 (32,862)
Tax at United States tax rate of 24% (2020: 24%) 2,906 (7,887)
Effects of:
Expenses not deductible for tax purposes 142 (89)
Refunds received (11) -
Profit/(loss) subject to foreign taxes at a lower marginal rate (179) (68)
Adjustment in respect of prior period - income statement (243) (356)
US R&D credits/other US tax credits - (2,584)
Share options - 224
Impact of rate changes 36 (255)
Deferred tax on US losses (recognised)/not recognised (12,619) 8,327
(Release)/recognition of uncertain tax positions 363 (262)
Other (303) (58)
Total tax benefit (9,908) (3,008)
Deferred taxation Asset Liability
$000 $000
Group
At 31 December 2019 8,647 (10,778)
Credited to income (1,007) 3,219
Credited directly to equity 50 -
Foreign Currency translation 11 (21)
At 31 December 2020 7,701 (7,580)
(Charged)/credited to income 7,651 3,339
Credited directly to equity 921 -
Foreign currency translation (13) 5
At 31 December 2021 16,260 (4,236)
The following table summarises the recognised deferred tax asset and
liability:
2021 2020
Group $000 $000
Recognised asset
Tax relief on unexercised employee share options 2,042 539
Short-term timing differences 2,767 3,584
Net operating losses & tax credits 11,445 1,728
S163(j) US interest disallowance 6 1,850
Deferred tax asset 16,260 7,701
Recognised liability
Capital allowances in excess of depreciation (1,399) (4,675)
Uncertain tax positions - (509)
Short-term timing differences (935) (456)
Business combinations (1,902) (1,940)
Deferred tax liability (4,236) (7,580)
Group
Unrecognised asset
Net operating losses and available tax credits - US - 10,752
Unrecognised deferred tax asset - 10,752
The tax rate in the US rate remained at 21%, before state taxes. Deferred
tax assets and liabilities were measured at a rate 21% (2020: 21%) plus state
taxes in the US.
A reduction in the UK corporation tax rate from 19% to 17% (effective 1 April
2020) was substantively enacted on 6 September 2016. The March 2020 Budget
announced that a rate of 19% would continue to apply with effect from 1 April
2020, and this change was substantively enacted on 17 March 2020.
An increase in the UK corporation rate from 19% to 25% (effective 1 April
2023) was substantively enacted on 24 May 2021. This will increase the
Company's future current tax charge accordingly. The deferred tax assets and
liabilities at 31 December 2021 have been calculated based on these rates,
reflecting the expected timing of reversal of the related temporary and timing
differences (2020: 19%).
There are no material unrecognised deferred tax assets.
The critical assumptions used in the assessment for the recognition of the
deferred tax asset on US losses and available tax credits are discussed in
note 6.
Taxation and transfer pricing
The Group is an international technology business and, as such, transfer
pricing arrangements are in place to cover funding arrangements, management
costs and the exploitation of IP between Group companies. Transfer prices and
the policies applied directly affect the allocation of Group-wide taxable
income across a number of tax jurisdictions. While transfer pricing entries
between legal entities are on an arm's length basis, there is increasing
scrutiny from tax authorities on transfer pricing arrangements. This could
result in the creation of uncertain tax positions.
The Group provides for anticipated risks, based on reasonable estimates, for
tax risks in the respective countries in which it operates. The amount of such
provisions can be based on various factors, such as experience with previous
tax audits and differing interpretations of tax regulations by the taxable
entity and the responsible authority. Uncertainties exist with respect to the
evolution of the Group following international acquisitions holding
significant IP assets, interpretation of complex tax regulations, changes in
tax laws, and the amount and timing of future taxable income.
Given the wide range of international business relationships and the long-term
nature and complexity of existing contractual agreements, differences arising
between the actual results and the assumptions made, or future changes to such
assumptions, could necessitate future adjustments to tax income and expense
already recorded.
Uncertainties in relation to tax liabilities are provided for within income
tax payable to the extent that it is considered probable that the Group may be
required to settle a tax liability in the future. Settlement of tax provisions
could potentially result in future cash tax payments; however, these are not
expected to result in an increased tax charge as they have been fully provided
for in accordance with management's best estimates of the most likely
outcomes.
Ongoing tax assessments and related tax risks
The Group has undertaken a review of potential tax risks and current tax
assessments, and whilst it is not possible to predict the outcome of any
current or future tax enquiries, adequate provisions are considered to have
been included in the Group accounts to cover any expected estimated future
settlements.
In common with many international groups operating across multiple
jurisdictions, certain tax positions taken by the Group are based on industry
practice and external tax advice or are based on assumptions and involve a
degree of judgement. It is considered possible that tax enquiries on such tax
positions could give rise to material changes in the Group's tax provisions.
The Group is consequently, from time to time, subject to tax enquiries by
local tax authorities and certain tax positions related to intercompany
transactions may be subject to challenge by the relevant tax authority.
The Group has recognised provisions where it is not probable that tax
positions taken will be accepted, totalling $nil (2020: $0.5 million) in
relation to transfer pricing risks and $0.9m (2020: $nil) in relation to
availability of international R&D claims.
The US losses recognised in the year were assessed under the section 382 US
tax legislation to validate they can be utilised, this assessment will need to
be conducted on an annual basis to determine if any restriction is required.
9. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share is calculated by dividing the net profit
attributable to ordinary shareholders, after adjustments for instruments that
dilute basic earnings per share, by the weighted average of ordinary shares
outstanding during the period (adjusted for the effects of dilutive
instruments).
Earnings for adjusted earnings per share, a non-GAAP measure, are defined as
profit before tax before the deduction of amortisation related to
acquisitions, impairment of intangible assets, acquisition costs, deferred and
contingent consideration linked to continued employment, and costs related to
share-based payments, less tax at the effective rate on tax impacted items.
The table below reflects the income and share data used in the total basic,
diluted, and adjusted earnings per share computations.
2021 2020
$000 $000
Profit/(loss) attributable to ordinary shareholders ($000) 22,018 (29,854)
Basic EPS
Denominator
Weighted average number of shares used in basic EPS (000s) 41,240 35,213
Basic earnings/ (loss) per share (cents) 53.39 (84.78)
Diluted EPS
Denominator
Weighted average number of shares used in basic EPS (000s) 41,240 35,213
Effect of dilutive securities
Options (000s) 1,552 983
Weighted average number of shares used in diluted EPS (000s) 42,792 36,196
Diluted earnings/ (loss) per share (cents) 51.45 (84.78)
The Group made a loss in the year ended 31 December 2020, 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 year ended 31 December 2020.
2021 2020
$000 $000
Adjusted EPS
Profit/(loss) attributable to ordinary shareholders ($000) 22,018 (29,854)
Adjustments for the period related to:
Amortisation relating to acquired intangibles from acquisitions 2,371 2,573
Impairment of intangible assets - 2,627
Reversal of impairment of intangible assets (1,707) -
Aborted sale process costs - 462
Deferred and contingent consideration linked to employment - 150
Share-based compensation and social security costs on unapproved options 2,490 1,398
25,172 (22,644)
Net tax related to the above adjustments (2021: 0.8%, 2020: 19.7%): 26 1,291
Adjusted profit attributable to ordinary shareholders ($000) 25,198 (21,353)
Adjusted basic EPS
Denominator
Weighted average number of shares used in basic EPS (000s) 41,240 35,213
Adjusted basic earnings/(loss) per share (cents) 61.10 (60.64)
Adjusted diluted EPS
Denominator
Weighted average number of shares used in diluted EPS (000s) 42,792 36,196
Adjusted diluted earnings/(loss) per share (cents) 58.88 (60.64)
37,583 LTIP awards were not included in the calculation of diluted EPS because
their exercise is contingent on the satisfaction of certain criteria that had
not been met as at 31 December 2021 (2020: 81,718).
10. Intangible assets
The cost and amortisation of the Group's intangible fixed assets are detailed
in the following table:
Goodwill Customer Trademarks Acquired internally developed intellectual property Patent & IPR costs Development costs Totals
relationships & supplier contracts
$000 $000 $000 $000 $000 $000 $000
Cost
At 31 December 2019 116,790 18,314 1,841 53,021 762 77,850 268,578
Foreign currency translation 721 - - 16 21 481 1,239
Additions - - - - - 2,969 2,969
Disposals - - - - - (6,737) (6,737)
At 31 December 2020 117,511 18,314 1,841 53,037 783 74,563 266,049
Foreign currency translation (135) - - 9 (4) (53) (183)
Additions - - - - - 720 720
Disposals - (4,737) (1,372) (28,620) - (17,932) (52,661)
At 31 December 2021 117,376 13,577 469 24,426 779 57,298 213,925
Amortisation/Impairment
At 31 December 2019 17,403 13,276 1,821 49,408 632 43,582 126,122
Foreign currency translation - - - 34 18 463 515
Charged - 882 16 1,675 21 11,425 14,019
Impairment - - - 430 - 2,197 2,627
Charged - - - - - (6,737) (6,737)
Disposal
At 31 December 2020 17,403 14,158 1,837 51,547 671 50,930 136,546
Foreign currency translation - - - 9 (4) (41) (36)
Charged - 882 1 1,490 28 9,291 11,692
Reversal of impairment (301) - (484) - (922) (1,707)
Disposal - (4,737) (1,372) (28,620) - (17,929) (52,658)
At 31 December 2021 17,403 10,002 466 23,942 695 41,329 93,837
Net book value
At 31 December 2021 99,973 3,575 3 484 84 15,969 120,088
At 31 December 2020 100,108 4,156 4 1,490 112 23,633 129,503
Capitalised development costs are not treated as a realised loss for the
purpose of determining the Company's distributable profits as the costs meet
the conditions requiring them to be treated as an asset in accordance with IAS
38.
Impairment testing of goodwill
The Group is required to test, on an annual basis, whether goodwill has
suffered any impairment or at where indicators of impairment exist. The
recoverable amount is determined based on value-in-use calculations. The use
of this method requires the estimation of future cash flows and the
determination of a discount rate in order to calculate the present value of
the cash flows. The goodwill balances of the Group are monitored and tested at
an operating segment level, further details on their composition are set out
below.
The carrying amount of goodwill is allocated as follows:
2021 2020
$000 $000
Ticketing and Distribution (CGU1, 2 and 3) * 71,473 71,609
LoQueue (CGU5) ** 28,500 28,500
99,973 100,109
* Comprises accesso, LLC, Siriusware, Inc, accesso Passport trading within
Accesso Australia PTY Limited being CGU1, VisionOne Worldwide Limited &
its subsidiaries and accesso ShoWare trading within Accesso Australia PTY
Limited being CGU2 and Ingresso Group Limited & subsidiaries as CGU 3.
** Comprises the accesso LoQueue trading within accesso Technology Group plc,
Lo-Q, Inc., Lo-Q Service Canada Inc and Accesso Australia PTY Limited as CGU
5.
The below table sets out the intangible asset impairments recorded within the
Guest Experience and Ticketing and Distribution segments:
2021 2021 2021 2020 2020 2020
Guest Experience Ticketing and Distribution Total Guest Experience Ticketing and Distribution Total
$000 $000 $000 $000 $000 $000
Intangible assets - - - - 1,360 1,360
Impairment of specific development projects* - - - 468 799 1,267
Impairment charge recorded within administrative expense - - - 468 2,159 2,627
* A review of all project
development costs capitalised was performed at year end with no impairment
charges recorded. In 2020 an impairment charge of $1.27m
was recorded against projects which are no longer considered commercially and
technically feasible.
The below table sets out the intangible asset impairment reversals recorded
within the Guest Experience and Ticketing and Distribution segments:
2021 2021 2021 2020 2020 2020
Guest Experience Ticketing and Distribution Total Guest Experience Ticketing and Distribution Total
$000 $000 $000 $000 $000 $000
Intangible assets (785) - (785) - - -
Impairment of specific development projects (922) - (922) - - -
Impairment (credit) recorded within administrative expense (1,707) - (1,707) - - -
The key assumptions used in the value in use calculations are as follows, note
that CGU 4's inputs have been used for the assessment of intangible assets
other than goodwill:
2021 2020
Pre-tax discount rate (%)
accesso, LLC & Siriusware, Inc. (CGU 1) 13.3% 14.0%
VisionOne Worldwide Limited and its subsidiaries (CGU 2) 13.3% 14.0%
Ingresso Group Limited and subsidiaries (CGU 3) 11.6% 11.9%
The Experience Engine (CGU 4) 13.3% 14.0%
LoQueue * (CGU 5) 13.3% 14.0%
Average annual EBITDA growth rate during forecast period (average %)**
accesso, LLC & Siriusware, Inc. (CGU 1)*** 0.0% 111.1%
VisionOne Worldwide Limited and its subsidiaries (CGU 2) 22.9% 520.8%
Ingresso Group (CGU 3) 51.6% 55.2%
The Experience Engine (CGU 4) 10.2% -44.4%
LoQueue * (CGU 5) 7.2% 232.6%
Terminal growth rate (%)
accesso, LLC & Siriusware, Inc. (CGU 1) 2.0% 2.0%
VisionOne Worldwide Limited and its subsidiaries (CGU 2) 2.0% 2.0%
Ingresso Group (CGU 3) 2.0% 2.0%
The Experience Engine (CGU 4) 2.0% 2.0%
LoQueue * (CGU 5) 2.0% 2.0%
Period on which detailed forecasts based (years)
accesso, LLC & Siriusware, Inc. (CGU 1) 5 5
VisionOne Worldwide Limited and its subsidiaries (CGU 2) 5 5
Ingresso Group (CGU 3) 5 5
The Experience Engine (CGU 4) 5 5
LoQueue * (CGU 5) 5 5
* Comprises accesso LoQueue trading within accesso Technology Group plc, Lo-Q,
Inc., Lo-Q Service Canada Inc and Accesso Australia PTY Limited.
**Average EBITDA growth rates for CGU 2 and CGU 3 are high due to the expected
2022 growth from a poor period of trade in 2021 following the difficult
trading conditions faced by the live entertainment sector, both CGUs earn the
majority of their transactional income from live entertainment which
experienced significant COVID disruption during 2021, therefore both CGUs have
high growth rates in 2022 as they recover towards pre-pandemic trading levels,
followed by more typical growth rates from 2023 to 2026. The 2020 impairment
test rates were high as a result of the recovery from 2020 COVID impacted
base levels to 2019 levels in 2022/2023 and a significant business
reorganisation during 2020.
***The average EBITDA growth rate for CGU 1 is 0% due to the exceptional
result in 2021 and its impact on the average calculation. In 2021,
transactional revenue rebounded quickly once COVID related restrictions on
attractions were lifted. This sudden increase in demand arose during a period
where the Group did not have a full cost base following the cost control
actions taken during 2020, resulting in a larger than anticipated EBITDA
result. The forecast period includes the full year impact of the Group
returning to an appropriate cost base and the EBITDA for the CGU returning to
a more typical level. The EBITDA growth rates across the forecast period for
CGU 1 are; 2022: -40%, 2023: +11%, 2024: +28%, 2025: +1%, 2026: +1%.
Operating margins have been based on experience, where possible, and future
expectations in the light of anticipated economic and market conditions.
Growth rates beyond the formally budgeted period are based on economic data
pertaining to the region concerned.
The discount rates applied to all CGUs was a pre‑tax measure estimated based
on comparable listed company gearing and capital structures, an equity risk
premium and risk-free rate applicable to the country, small stock premium
relative to the market and size of business and an appropriate cost of debt
relative to market conditions.
Reversal of impairment of The Experience Engine ('TE2') intangible assets -
Cash Generating Unit ('CGU') 4 as at 31 December 2021
As at 31 December 2021 the recoverable value of
the TE2 CGU was significantly improved following a period of strong trading,
improved cost control and efficiency of the CGU. A review was conducted of the
$29.2m of intangible assets impaired in 2019, updated to 31 December 2021
based on their original useful economic lives (periods of 2-5 years), to
assess each category of asset to determine if they remain in existence and are
generating economic returns. As a result of this reassessment of the
conditions as at 31 December 2021, $0.9m of development costs, $0.3m of
acquired customer relationships and $0.5m of acquired intellectual property
was reversed with a credit of $1.7m to administrative expense. The recoverable
value of the CGU was determined on a value in use basis using the assumptions
and inputs noted above, the $1.707m reversal is not sensitive to changes in
these assumptions due to a significant amount of headroom in excess of the
revised book value of the TE2 CGU. The recoverable value of the CGU was
determined to be $25.0m as at 31 December 2021.
Sensitivity analysis
If any of the following changes were made to the following key assumptions the
carrying value and recoverable amount would be equal as at 31 December 2021. A
considerable amount of judgement is applied in setting discount rates,
forecasts and terminal values, all of which will be impacted by the current
uncertainty in the market and the speed at which our customers and the wider
macro markets recover from the impacts of COVID-19.
Ticketing and Distribution* accesso
LoQueue**
2021 2020 2021 2020
Pre-tax discount rate Increase by 4.6% Increase by 1.1% Increase by 14.3% Increase by 7.5%
EBITDA Growth rate during detailed forecast period (average) Reduce by 33.5% Reduce by 7.8% Reduce by 62.2% Reduce by 40.0%
Terminal growth rate Reduce by 7.5% to a terminal rate of -5.5% Reduce by 1.1% Reduce by 37.0% to terminal rate of -35% Reduce by 8.6%
Excess over carrying value ($000) $79,147 $36,138
$42,843 $10,481
* Comprises accesso, LLC, Siriusware, Inc., VisionOne Worldwide Limited &
its subsidiaries and Ingresso Group Limited & subsidiaries and accesso
Passport/accesso ShoWare trading within Accesso Australia PTY Limited (CGUs 1,
2 and 3).
** Comprises the LoQueue trading within accesso Technology Group plc, Lo-Q,
Inc., Lo-Q Service Canada Inc and Accesso Australia PTY Limited (CGU 5).
We do not consider there are any plausible changes in assumptions that would
give rise to an impairment in Ticketing and Distribution or accesso LoQueue
over the next financial year.
Environmental risk in cash flows
It is expected that air travel will be reduced in response to both COVID-19 in
the near-term and then longer term in response to climate change agendas, we
have considered this risk in our cash flow forecasting for impairment testing.
The majority of the venues we serve have typically localised customer bases
rather than being reliant on destination travel, consequently we consider the
risk as minimal on our forecasts.
Development costs not yet available for use
Development cost assets not yet available for
use reside in the CGUs as follows and are considered annually for impairment
in line with the goodwill attached to those CGUs. These capitalised costs
relate to development projects which have not been put into use as at the
year-end:
2021 2020
$000 $000
accesso, LLC & Siriusware, Inc. (CGU 1) - 49
accesso Technology Group plc (CGU 5) 386 -
11. Called up share capital
2021 2020
Ordinary shares of 1p each Number $000 Number $000
Opening balance 41,215,291 595 27,642,822 427
Issued in relation to exercised share options 52,085 1 50,187 1
Issued in relation to deferred acquisition consideration - - 40,538 1
Issued in relation to the placing and open offer - - 13,481,744 166
Closing balance 41,267,376 596 41,215,291 595
On 9 June 2020 the Company's shareholders approved the placing, direct
subscription and open offer to issue 13,481,744 new ordinary shares at £2.90p
to raise gross proceeds of £39.1 million ($48.2 million).
During 2021, 52,085 shares (2020: 50,187 shares), with a nominal value $726
(2020: $630), were allotted following the exercise of share options.
In addition, during 2020, 40,538 shares were issued in respect of the deferred
acquisition consideration to certain employees of Blazer and Flip Flops Inc
for a nominal value of $522.
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company.
Following the adoption of new Articles of Association on 12 April 2011 the
Company no longer has an authorised share capital limit.
All issued share capital is fully paid as at 31 December 2021.
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