REG - Accesso Technology - RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023
16/04/2024 07:00
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RNS Number : 7095K Accesso Technology Group PLC 16 April 2024
accesso® Technology Group plc
("accesso" or the "Group")
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023
Continued strong performance in a transformative year of strategic
acquisitions
accesso Technology Group plc (AIM: ACSO), the premier technology solutions
provider for attractions and venues worldwide, today announces results for the
year ended 31 December 2023 ('2023').
Commenting on the results, Steve Brown, Chief Executive Officer of accesso,
said:
"In 2023 we exceeded our profitability target and completed three strategic
acquisitions that set the stage for accelerated future growth. We won new
work, innovated across our product set, and delivered new solutions for our
customers. As a result, our technology now optimises revenue for more than
1,200 leisure venues across 34 countries and a wide range of verticals - from
the Pyramids in Egypt to the world's most popular theme park destination in
Orlando.
At the heart of our success is our ability to break new ground while
continuing to increase impact in our traditional ticketing and virtual queuing
categories. With accesso Freedom(SM), our new Restaurant and Retail offering,
we have seen encouraging early demand and a growing pipeline which will expand
our reach into the hospitality market. With Qview, our machine-learning-driven
queue time measurement system, we were recognised as a Best New Product by the
International Association of Amusement Parks and Attractions (IAAPA). And in
accesso Passport®, our market leading ticketing and eCommerce platform, we
rolled out major upgrades that will enhance our core offering. Each of these
efforts demonstrates our focus on organic innovation and the important role it
plays in our future growth aspirations.
Alongside this organic progress, our acquisitions help us boost earnings,
advance our product roadmap, and accelerate our growth in new geographies.
Paradocs Mountain Software, now accesso Paradox(SM), deepens our leadership in
the growing ski market. With more than 150 venues as existing customers,
accesso is - by far - the leading technology provider in the North America ski
sector. VGS, now accesso Horizon(SM), is the ticketing solution of choice for
the world's largest theme park destination. It expands our blue-chip customer
base and provides a significant opportunity for accelerated growth, especially
alongside our eCommerce services. DigiSoft, while smaller in scale, enhances
our commitment to mobile-first solutions, including apps, which are an
essential route for end users to access ticket purchases, ticket entitlements,
virtual queuing and food orders all in one organised venue-centric solution.
I'm confident no competitor can match the quality and diversity of our
solutions while delivering revenue and profit expansion at our scale. Our
dedicated teams around the world delivered a year to be proud of. I am excited
about the work we have done to position accesso for a new phase of growth."
2023 Financial highlights
2023 2022 Vs 2022
$000 $000 %
Revenue 149,515 139,730 7.0%
Revenue - constant currency ((4)) 148,523 139,730 6.3%
Cash EBITDA ((1)) 23,626 25,805 (8.4)%
Statutory profit before tax 8,808 12,417 (29.1)%
Net cash ((2)) 31,465 64,663 (51.3)%
Adjusted basic EPS (cents) ((3)) 37.48 35.93 4.3%
Basic earnings per share (cents) 19.19 24.41 (21.4)%
Footnotes:
(1) Cash EBITDA: operating profit before the deduction of amortisation,
depreciation, acquisition and integration costs, and costs related to
share-based payments less capitalised development costs (see reconciliation in
Financial review).
(2) Net cash is calculated as cash and cash equivalents less borrowings.
(3) Adjusted basic earnings per share is calculated after adjusting operating
profit for impairment of intangible assets, amortisation on acquired
intangibles, acquisition costs and share-based payments, net of tax at the
effective rate for the period on the taxable adjusted items (see note 9).
(4) Revenue metrics for the period ended 31 December 2023 have been prepared
on a constant currency basis with the period ended 31 December 2022 to assist
with assessing the underlying performance of the revenue streams. Average
monthly rates for FY 2022 were used to translate the monthly FY 2023 results
into a constant currency using the range of currencies as set out below:
a. GBP sterling - $1.13 - $1.36
b. Euro - $0.98 - $1.13
c. Canadian dollars - $0.73 - $0.79
d. Australian dollars - $0.64 - $0.74
e. Mexican pesos - $0.05 - $0.05
f. Brazilian real - $0.18 - $0.21
Performance highlights
· Exceeded expectations with strong profitability and cash
performance while investing for growth
Delivered FY 2023 Cash EBITDA of $23.6m (FY 2022: $25.8m), ahead of
expectations. This came alongside investment in both existing and acquired
products to help drive accesso's next phase of growth and customer success.
The Group is also in a strong cash position, ending the year net cash positive
despite an outflow of $50.0m related to the three acquisitions and maintaining
a net cash position of $21.7m as at 31 March 2024.
· Robust top line progress alongside mix-shift towards high quality
repeatable revenue streams
Delivered revenue growth of 7.0% to $149.5m (FY 2022: $139.7m). This was
achieved while taking proactive steps to reduce lower margin or breakeven
revenue streams while focusing on higher quality, more sustainable growth.
Excluding the impact of our mid-year shift away from providing virtual queuing
operational staff for a key customer, total Group revenue increased 9%.
Transactional revenue for virtual queuing increased by 13% while our overall
ticketing revenue increased by 12%. Overall Gross Margin increased from 74.4%
to 76.4%.
· Three strategic acquisitions enabling a new wave of geographic,
technology and end-market diversification
VGS, now accesso Horizon, is a leading ticketing platform with a blue-chip
customer base, and has already delivered a significant Middle East win with
Saudi Entertainment Ventures (SEVEN). Paradocs Mountain Software, now accesso
Paradox, makes us the largest guest experience technology provider to the ski
industry in North America. DigiSoft structurally transforms how we approach
venue-centric mobile solutions.
· Continued innovation to extend market leadership and enhance guest
experiences
accesso Freedom, our new Restaurant and Retail platform, allows venues to
transform from legacy, operator-driven sales terminals to a modern solution
that supports mobile food ordering, self-service ordering kiosks, and mobile
point-of-sale. The solution is a ubiquitous offering across our diverse
customer base that will provide significant cross-sell opportunity and the
potential to expand our reach into the broader hospitality market. Qview, our
machine-learning-enabled queue management technology, won a Best New Product
Brass Ring award at IAAPA. Finally, we completed significant upgrade on
accesso Passport including expanded functionality for payments, new dynamic
pricing capabilities and a full upgrade of the eCommerce user interface.
· Operational success demonstrates strength and durability at our
core
Continued customer base growth in key markets with high calibre logos, and a
total of 28 new venues were signed during the period across attractions,
entertainment venues, ski resorts, theme parks, waterparks, zoos and aquariums
in North America, EMEA and APAC (FY 2022: 24). The Group's solutions continue
to attract customers with complex needs, and a total of 10 new clients were
added that are leveraging more than one accesso solution. Through our three
acquisitions, we added a further 90 customers across 273 venues to our
customer base.
Outlook & guidance
· Market backdrop: With visitor demand stabilised, attractions and
venues are increasingly focused on improving the guest experience, achieving a
higher percentage of returning visitors, and increasing capita per guest. Our
products are perfectly positioned to help customers achieve these objectives.
As customers implement technology to drive future spend, our investments made
in product and scalability continue to position us at the forefront of the
market.
· Operational footprint and costs: After two years of double digit
rises in underlying administrative expenditure, following our return to a full
headcount to service additional demand and deliver on our growth objectives,
we expect stability in the short term with increases in the range of 8-10%. We
are continuing to be mindful of the impact of inflation and have challenged
our leaders to operate efficiently with the resources available.
· Focus on global growth with extended in-market presence: Following
the completion of the acquisitions this year, we have now added offices in
Canada, Dubai, Italy and Singapore, providing the Group with an important
footprint in markets where on-the-ground presence is crucial to accessing
opportunities. This is in line with our continued focus on global growth.
· Full year expectations for 2024: With significant progress made
against our strategy, the Group expects another profitable and cash-generative
year in line with current expectations, with revenue of not less than $160.0m,
gross margin of approximately 80% and Cash EBITDA margin of not less than 17%.
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 0930 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@dentonsglobaladvisors.com. A copy of the presentation made to analysts
will be available for download from the Group's website, shortly after the
conclusion of the meeting.
accesso Technology Group plc +44 (0)118 934 7400
Steve Brown, Chief Executive Officer
Fern MacDonald, Chief Financial Officer
Deutsche Numis (Nominated Adviser and Sole Broker) +44 (0)20 7260 1000
Simon Willis, Joshua Hughes, Iqra Amin
Dentons Global Advisors +44 (0)20 7550 9225
James Melville Ross, Methuselah Tanyanyiwa
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 1,200 clients in 34 countries around the globe, accesso's
solutions help our clients streamline operations, generate increased revenues,
improve guest satisfaction and harness the power of data to facilitate
business and marketing decisions.
accesso stands as the leading technology provider of choice for tomorrow's
attractions, venues and institutions. To stay ahead, we invest heavily in
research and development because our industries demand it, our clients benefit
from it and it makes a positive impact on the guest experience. Our innovative
technology solutions allow venues to increase the volume and range of on-site
spending and to drive increased transaction-based revenue through cutting edge
ticketing, point-of-sale, virtual queuing, distribution and experience
management software.
Many of our team members have direct, hands-on experience working in the
venues we serve. In this way, we are experienced operators who run a
technology company serving attractions operators, versus a technology company
that happens to serve the market. From our agile development team to our
dedicated client service specialists, every team member knows that their
passion, integrity, commitment, teamwork and innovation are what drive our
success.
accesso is a public company, listed on AIM: a market operated by the London
Stock Exchange. For more information visit www.accesso.com
(https://www.accesso.com/) . Follow accesso on X (https://x.com/accessotech) ,
LinkedIn (https://www.linkedin.com/company/accesso) and Facebook
(https://www.facebook.com/accessoTechnologyGroup/) .
Chief Executive's review
Long-term thinking underpinned by innovation and impact in the here-and-now
2023 was another strong year for accesso. We delivered innovation and impact
for our customers, executed well across all our products and markets, and in
bringing three outstanding acquisitions to our business, made important
strides against our longer-term diversification strategy.
Our confidence to pursue these plans with such vigour is a result of the
quality and strength of accesso today. In 2023, we delivered top line growth,
exceeded profit expectations and, once again, generated strong cash flow. We
have a customer base, operational platform, product and scale unmatched in our
sector. We are leveraging the strength of our foundation as we continue to
extend our position in the market.
On the organic front, we have continued to innovate, introducing new
capability and use-case advances to enhance our platform and broaden its
applicability. We are deepening our expertise in growth areas like Restaurant
and Retail, and in new and exciting markets like Saudi Arabia and the UAE. As
we approach these opportunities, our technology integrates, scales and adapts
more seamlessly than ever - generating better guest experiences and outcomes
for our customers.
Coupled with the crisp execution in our organic business, our three
acquisitions will help us build on our position and stand to accelerate our
growth over the mid-term. They increase the internationalisation of our
footprint, elevate our leadership in the important ski market, and advance the
quality of the technology platform on which we will drive future innovation.
Bringing VGS, Paradocs Mountain Software and DigiSoft into the accesso
ecosystem also opens up material cross-selling opportunities across our
product set and emphasises our commitment to globalised functionality and
mobile-first solutions.
Combining the strength of our existing business with the firepower of these
acquisitions reinforces our unique market position. Our scale and reach means
that we are able to access opportunities within multiple markets and a vast
range of end sectors in a way that is unique to accesso. Significantly, we
have been able to do all of this while investing in the evolution of our
organic business and maintaining a level of financial performance of which I
am extremely proud.
Financial performance
During 2023, we invested for future growth while exceeding our profitability
target for the full year. Revenue improvement of 7% demonstrates solid growth
against stabilised market demand and, importantly, adjusting for our planned
shift away from lower margin revenue streams, we saw top line growth of 9%.
This approach saw us complete the transition away from a material portion of
revenue associated with our involvement in accesso LoQueue operations for a
key customer during the year. This proactive step impacted revenue in 2023 and
will have a further impact in 2024, but helps us accelerate towards a more
focused, visible, sustainable and high quality revenue profile going forwards.
Our focus on margin and cash generation forms a fundamental part of our value
proposition, and our continued ability to execute within those parameters is a
positive endorsement of the direction of our business and the quality of our
execution.
For 2023, Cash EBITDA stood at $23.6m (FY 2022: $25.8m), ahead of our
expectations. This was achieved while we continued to invest in our new
restaurant and retail platform, upgraded our existing core products, and began
to integrate three transformative acquisitions. At the same time, we have
rapidly paid down debt from the acquisitions, having already paid off $13.75m
of the $35.0m drawn, and ending the period net cash positive at $31.5m.
Post-period end, we have paid down a further $1.5m of our debt and repurchased
a further $2.8m in shares. We ended March 2024 with a net cash position at
31 March 2024 of $21.7m, in line with our expectations, as we head toward our
peak summer trading period.
Organic product innovation to extend leadership position across multiple
verticals
During the year, we made significant updates to our product set to meet the
evolving needs of our customers and improve touchpoints for our customers
across the entire guest experience.
Restaurant and Retail
During 2023, the Group invested substantially in deepening its strategic focus
on the Restaurant and Retail segment and capitalise on its 2022 acquisition of
high-quality technology assets in this growing space. With the acquisition,
the Group saw a significant opportunity to develop a product that would
address a unique and unmet need in the sector: the demand for a solution that
accounted for the contextual and specific functional requirements of
restaurant and retail operations that extend well beyond the parameters of
standalone outlets.
In today's market, guests expect to redeem entitlements and offers seamlessly,
especially if they are packaged with admission, membership benefits and season
passes. Our new proposition enables this functionality and also allows
operators to deliver a mobile user experience focused on self-service at vast
scale. This product came to life during the period with the launch of accesso
Freedom.
This all-new product's value becomes even more meaningful when used as part of
a wider solution - for example, alongside accesso Paradox, our newly acquired
Ski market technology. Having launched in November 2023, we have already seen
one customer go live, and delivered 5 post-period wins.
eCommerce
The period also saw upgrades to our leading accesso Passport product which
delivered a record 106.5 million tickets in the year. As a flagship part of
our business and an important tool for our customers that spans multiple areas
of the guest experience - including eCommerce, PoS, guest support and payments
- we are committed to modernising and innovating along with evolving consumer
behaviour and customer demands.
With this in mind, we are well under way with the development of new extension
to accesso Passport eCommerce which will be adaptable in phases to accesso
Paradox in the near term and accesso Horizon in the mid-term. This will
provide a significant upgrade to accesso Paradox ecommerce and expand the
accesso Horizon business model to include eCommerce capabilities with the
power of our proven, industry-leading technology. Our unmatched eCommerce
capabilities paired with industry-leading platforms like accesso Paradox and
accesso Horizon perfectly illustrate the complementary value propositions
across our solutions and the significant transactional revenue growth
opportunity made available to us through our recent acquisitions.
Virtual Queuing
With the majority of our virtual queuing solution now in the hands of visitors
via their mobile phone, we continue to gain operational efficiency by reducing
reliance on proprietary hardware and related overheads. With fewer staff
needed to handle hardware provision and our key operational functions now
focused on redemption of virtual queuing entitlements, mid-year we shifted
away from the operational staffing for a key customer and the corresponding
pass-through revenue. Net of the impact of the pass-through revenue to cover
the park staffing costs, accesso LoQueue revenue increased by 13% and
highlights the continued potential for growth from our innovative and
proprietary virtual queuing technology.
During the year, we also launched Qview, an advanced, patent-pending
line-counting system prepared to modernise wait time estimation for theme
parks and attractions. Combining real-time images and Machine Learning, Qview
provides continuous and accurate wait times. This allows customers to better
manage their time within attractions, streamline operations and elevates the
overall guest satisfaction. When visitors are better able to manage their
time, they are more likely to spend within other areas of the attraction and
have a better experience, leading to increased likelihood of a return visit.
As a testament to its outstanding innovation, Qview was recognised as a "Best
New Product" for the attractions industry by IAAPA - the largest international
trade association for amusement facilities globally - as part of its 2023
Brass Ring Awards programme at IAAPA Expo 2023 in Orlando, Florida. This
demonstrates the technological innovation that we are continuing to champion
and deliver for our customers.
Three strategic acquisitions already delivering results
The three acquisitions we made during the year all unlock key components of
our strategy. We detailed the strengths of each business at the time of the
interim results, and it is important to reflect on the opportunities they have
already provided to our business, and how they will contribute to our
proposition over the longer term.
Paradocs Mountain Software
Strategic fit and capability
Paradocs, acquired in April 2023 and now accesso Paradox, significantly
improves our position within the ski market. Paradocs was a leading
Canadian-based provider of cutting-edge software solutions specifically for
the ski industry and was established in 2001.
Our businesses shared an important ethos - that the ski industry needs a
holistic and integrated approach to its operations to truly optimise
operations and the guest experience. The flexible, integrated solution
empowers ski resorts to take full control of their unique business needs
across ticketing and passes, snow school, equipment rental, and online sales.
Adding this contemporary and powerful solution to our offering supports
accesso's long-standing commitment to serving as the industry's premier ski
solutions provider.
Progress to date
We are already seeing the quality of accesso Paradox flow through to results -
10 new resorts will be running accesso Paradox for the 2023/24 ski season. We
saw the first transition from accesso Siriusware to accesso Paradox, as our
customers recognise the value of the hosted all-in-one mountain management
solution.
Following the acquisition, combined with the strong position we already had
through products such as accesso Siriusware and accesso Passport, we have
furthered our position as the largest ski software provider in North America -
by far - as we now serve more than 150 venues across the region. The contracts
already won, and the progress we are continuing to see post-period end, give
us good momentum heading into 2024. Over the medium and long term, we are
incredibly well positioned to resolve the complexity of the projects that
these dynamic resorts require in a way that our competitors cannot match.
VGS
Strategic fit and capability
VGS, a leading ticketing and entitlement management platform, was acquired in
June 2023 and rebranded to accesso Horizon. This acquisition significantly
strengthened our global position, further extended our market leadership and
provides a truly innovative platform from which we can continue to scale.
The VGS technology is utilised by high profile leisure, entertainment and
cultural businesses around the globe, and has supported renowned visitor
attractions in all aspects of selling, distributing, and redeeming tickets
since 2011. Its client roster of more than 200 venues includes the world's
largest theme park resort destination in Orlando, Florida, as well as leading
theme park brands in Dubai, Singapore, Japan and China. Beyond theme parks,
the ticketing and visitor management platform supports zoos, observation
towers and other diverse attractions in a total of 11 countries around the
globe, including one of the Seven Wonders of the Ancient World - the Pyramid
of Giza in Egypt.
With its top-tier client base, VGS's expansive feature set and robust scaling
capabilities provide a foundational platform for growth. With the addition of
eCommerce functionality in the mid-term, accesso Horizon will continue to
stand at the forefront of the market and the future of venue ticketing and
entitlement management.
Progress to date
The breadth of VGS' international business and its offices in Milan, Dubai and
Singapore have already given us access to new markets where a physical
presence is important to winning opportunities. This is particularly relevant
in our efforts to expand our footprint in the Middle East and in Asia Pacific.
A significant post-period win of a major Middle East customer will see accesso
Horizon provisioned across 22 new venues in 14 cities for Saudi Entertainment
Ventures. In the Asia Pacific region, our office in Singapore and expanded
commercial presence is presenting a range of new to accesso opportunities.
Looking ahead, in addition to the continued global growth for accesso Horizon,
we are now presented with new cross-selling targets across its initial client
base. Importantly, there is significant potential in the mid-term and beyond
as we realise the transactional revenue opportunity provided by extending the
solution to include eCommerce functionality. The VGS platform fits squarely
into our technology roadmap, adds a powerful industry-leading solution to our
business and unlocks a range of global opportunity.
DigiSoft
Strategic fit and capability
DigiSoft, headquartered in Cork, Ireland, was acquired in May 2023, having
previously been a key partner for augmenting our mobile development
initiatives. Mobile apps, although not transactional themselves, are a key
delivery mechanism for a range of our transactional revenue solutions
including tickets, season passes, virtual queueing and mobile food ordering.
Bringing this outstanding team in-house gave us increased flexibility and
efficiency, allowing us to execute at-pace on client requests and solidifies
another key differentiation point for our business as we offer the full range
of solutions needed by venue operators.
People and culture
Our team has delivered in what has been a transformative year. Their focus and
dedication have been a testament to the culture that they all embody, and I
have been proud of the way they have performed.
We added a number of colleagues during 2023 through acquisitions, and have
been impressed by the way they have immediately become part of the accesso
team and culture. At the end of 2023, our employee base now stands at 672
across 12 geographies, giving our business a reach and scale that clearly
differentiates us in the marketplace.
In what is typically an industry of high attrition, in contrast we had 7%
organic turnover (2022: 15%), which is a significant improvement on the prior
year. We are proud of the investments we have made in our team and the strong
culture that sets us apart as a business.
Outlook
We delivered robust results for 2023 with profitability that exceeded
expectations. We achieved this while continuing to drive innovation across our
products and integrating three strategic acquisitions.
As we look forward, we will leverage this enhanced and increasingly profitable
solution set to serve operators more focused than ever on leveraging
technology to drive customer spend and increase revenue per visitor. No
competitor can match the breadth and quality of our offering, which is
uniquely placed to sit at the heart of the most complex operations for the
world's most demanding clients.
As we enter our next phase of growth in 2024, we'll continue to act with a
clear-eyed focus on higher value revenue streams. Overall, the Group expects
another profitable and cash-generative year in line with current expectations,
with revenue of not less than $160.0m, gross margin of 80% and Cash EBITDA
margins of not less than 17%.
Steve Brown
Chief Executive Officer
15 April 2024
Financial review
Commenting on the results, Fern MacDonald, Chief Financial Officer of accesso,
said:
"We continued to go from strength to strength in 2023 - delivering record
revenue and beating our profitability target in what was a pivotal year for
our business. Integrating three strategically important acquisitions while
delivering against our financial objectives is a testament to our strong
platform, robust balance sheet and impressive market position. Our products
and solutions across entertainment, attractions, venues - and new end
verticals such as food & beverage - continue to advance and adapt in-step
with evolving consumer expectations. Looking ahead to 2024 and beyond, we're
excited about the difference we can make for our customers, as we continue to
set the standard within the industry."
Financial overview
During 2023, the Group delivered record financial performance in revenue and a
Cash EBITDA number that exceeded our expectations. We successfully completed
three acquisitions in the period and all have contributed to our 2023 results.
Key performance indicators and alternative performance measures
The Board continues to utilise consistent alternative performance measures
(APMs) internally and in evaluating and presenting the results of the
business. The Board views these APMs as representative of the Group's
underlying performance.
The historic strategy of enhancing accesso's technology offerings via
acquisitions, as well as an all-employee share option arrangement, necessitate
adjustments to statutory metrics to remove certain items which the Board does
not believe are reflective of the underlying business.
By consistently making these adjustments, the Group provides a better
period-to-period comparison and is more readily comparable against businesses
that do not have the same acquisition history and equity award policy.
APMs include Cash EBITDA, Adjusted basic EPS, net cash, underlying
administrative expenditure and repeatable and non-repeatable revenue analysis
and are defined as follows:
· Cash EBITDA is defined as operating profit before the deduction of
amortisation, impairment of intangible assets, depreciation, acquisition and
integration costs, and costs related to share-based payments less capitalised
internal development costs;
· Adjusted basic earnings per share is calculated after adjusting
operating profit for impairment of intangible assets, amortisation on acquired
intangibles, acquisition costs and share-based payments, net of tax at the
effective rate for the period on the taxable adjusted items;
· Net cash is defined as available cash less borrowings. Lease
liabilities are excluded from borrowings on the basis they do not represent a
cash drawing;
· Underlying administrative expenses are administrative expenses
adjusted to add back the cost of capitalised development expenditure and
property lease payments and remove amortisation, impairment of intangible
assets, depreciation, acquisition costs, and costs related to share-based
payments. This measure is to identify and trend the underlying administrative
cost before these items;
· Repeatable revenue consists of transactional revenue from Virtual
Queuing, Ticketing and eCommerce and is defined as revenue earned as either a
fixed amount per sale of an item, such as a ticket sold by a customer or as a
percentage of revenue generated by a venue operator. Normally, this revenue is
repeatable where a multi-year agreement exists and purchasing patterns by
venue guests do not significantly change. Other repeatable revenue is defined
as revenue, excluding transactional revenue, that is expected to be earned
through of a customer's agreement, without the need for additional sales
activity, such as maintenance and support revenue. Non-repeatable revenue is
revenue that occurs one-time (e.g. up-front licence fees) or is not repeatable
based upon the current agreement (e.g. billable professional services hours)
and is unlikely to be repeatable without additional successful sales execution
by accesso. Other revenue consists of hardware sales and other revenue that
may or may not be repeatable with limited sales activity if customer behaviour
remains consistent; and
The Group considers Cash EBITDA, which disregards any benefit to the income
statement of capitalised development expenditure, as its principal operating
metric.
These APMs should not be viewed in isolation but as supplementary information.
As adjusted results include the benefits of the Group's acquisition history
but exclude significant costs (such as significant legal or amortisation
expenditure), they should not be regarded as a complete picture of the Group's
financial performance, which is presented in its total results.
Key financial metrics
Revenue
Group revenue of $149.5m (2022: $139.7m) represents a record for the Group and
built on the excellent performance in 2022. Through 2023, customers continued
to use our technology to tackle more conventional problems, such as physical
queues, and also newer use-cases, with technology driving efficiency and
compensating for staffing difficulties, including wage inflation and
recruitment challenges. 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 base-level consumer expectation across our key markets and will
increasingly become the industry standard over time. 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:
2023 2022 Vs 2022
$000 $000 %
Ticketing 86,455 77,175 12.0%
Distribution 17,569 18,081 (2.8%)
Ticketing and distribution 104,024 95,256 9.2%
Virtual queuing - transactional revenue 25,754 22,727 13.3%
Virtual queuing - staffing cost reimbursement 3,344 5,452 (38.7%)
Other guest experience 16,393 16,295 (0.6%)
Guest experience 45,491 44,474 2.3%
Total revenue 149,515 139,730 7.0%
Ticketing and Distribution revenue was 9.2% up on 2022, this includes the
benefit of a partial year of accesso Horizon and accesso Paradox revenue,
which together contributed $6.4m of the $8.8m increase. The distribution
business was significantly impacted by the UK theatre sector where third-party
sellers had a difficult year due to more limited inventory than normal as
theatres opted to sell more direct and restrict distribution deals. The
distribution business continues to diversify beyond the UK theatre market and
is benefiting from wider integration into the Group's customer base, allowing
existing customers to distribute their ticket supply to wider markets.
In the first quarter of 2024, a decision was made to exit the B2C division of
our distribution business which has operated with minimal profit contribution.
This will result in a reduction in revenue on a full year basis of
approximately $2.5m but, due to low margin and the potential for savings in
overhead, there will be minimal impact on our bottom line. This move is
another step in our focus on profitable, quality revenue as we work to improve
our margins.
Our distribution business, focused on B2B, will continue to be a key part of
our service offering however, due to the accounting standards covering revenue
recognition, our margins in this business will always be significantly lower
than the rest of our revenue streams. These revenue recognition standards
require us to recognise the full amount of commission included within the
gross value of a ticket sold as our revenue, with the larger portion of this
commission paid to the distributor as our cost of goods sold. To illustrate
the impact this has on our results, the table below presents what our revenue
and gross profit and cash EBIDTA margins would be if we were permitted to
recognise net commission as our revenue.
Proforma income statement with distribution revenue recognised net:
2023 2022
$000 $000
Revenue 136,917 128,533
Cost of goods sold (22,670) (24,573)
Gross Profit 114,247 103,960
Gross Profit margin 83.4% 80.9%
Expenses (as reported) (90,621) (78,155)
Cash EBITDA 23,626 25,805
Cash EBITDA margin 17.3% 20.1%
During 2023, the Group went live with 33 new eCommerce ticketing clients, down
slightly on 40 during 2022. This demonstrates a continued shift in consumer
behaviour and attraction preference towards 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.
Within the Guest Experience segment, accesso LoQueue's transactional-based
queuing products grew despite a change in strategy which resulted in the
management and provision of seasonal labour being returned to a major customer
from July 2023 onward. Whilst this causes a reduction in revenue, it is an
important step in accesso's focus on high quality revenue and focus on EBITDA
margin. The numbers below show queuing revenue with seasonal labour
reimbursement removed, which shows underlying growth in transactional revenue
of 13.3% over 2022.
Virtual queuing revenue:
2023 2022 Vs 2022
$000 $000 %
Virtual queuing - transactional revenue 25,754 22,727 13.3%
Virtual queuing - staffing cost reimbursement 3,344 5,452 (38.7%)
Queuing 29,098 28,179 3.3%
The remaining revenue within the Guest Experience segment comes primarily from
professional services which was down 2.8% on 2022.
Revenue on a geographic and segmental basis was as follows:
2023 2022
Primary geographic markets Ticketing Guest Ticketing Guest
and Experience Group and Experience Group
Distribution Distribution
$000 $000 $000 $000 $000 $000
UK 22,358 3,286 25,644 24,636 2,441 27,077
Other Europe 2,673 5,776 8,449 3,085 3,233 6,318
Australia/South Pacific/Asia/Africa 8,644 1,854 10,498 4,797 1,975 6,772
USA 61,626 34,098 95,724 56,285 36,276 92,561
Canada 4,270 266 4,536 3,216 302 3,518
Mexico 3,550 211 3,761 2,618 247 2,865
Other Central and South America 903 - 903 619 - 619
104,024 45,491 149,515 95,256 44,474 139,730
Outside of the UK, we experienced growth in all of our geographies in 2023. As
discussed above, the UK was impacted by a number of UK theatre distribution
partners opting to restrict sales through third-party channels. The
acquisition of accesso Paradox increased our footprint in Canada, while the
acquisition of accesso Horizon increased our footprint outside our core
regions of UK and USA. In the USA, the reduction in the USA Guest Experience
revenue reflects our move away from the provision of labour for our largest
queuing customer.
Revenue quality
2023 2022
$000 $000 %
Virtual queuing - transactional 25,754 22,727 13.3%
Virtual queuing - staffing cost reimbursement 3,344 5,452 (38.7%)
Ticketing and eCommerce 82,776 77,788 6.4%
Reservation revenue - 18 (100.0%)
Transactional revenue 111,874 105,985 5.6%
Maintenance and support 9,338 7,122 31.1%
Platform fees 3,352 3,007 11.5%
Recurring licence revenue 1,505 604 149.2%
Total repeatable 126,069 116,718 8.0%
One-time licence revenue 2,881 2,145 34.3%
Professional services 15,536 15,988 (2.8%)
Non-repeatable revenue 18,417 18,133 1.6%
Hardware 1,533 1,434 6.9%
Other 3,496 3,445 1.5%
Other revenue 5,029 4,879 3.1%
Total revenue 149,515 139,730 7.0%
Total repeatable as % of total 84.3% 83.5%
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 of 84.3%
is consistent with the 83.5% achieved in 2022 and 84.4% in 2021.
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 have continued to grow, up 5.6% on
2022. As detailed above, underlying virtual queuing growth was 13.3% with the
impact of the elimination of labour recharge removed. Professional services
revenue fell 2.8% against the prior year but continues to drive our platform
revenues which grew to $3.4m, an increase of 11.5%.
Other revenues were broadly comparable with 2022, being 3.1% higher. This is
commissions received from the Group's guest ticket insurance partners as well
as third-party hardware partners. Other revenue also includes referral
commissions received from the Group's guest payment gateway partners.
Gross margin
The Group's reported gross profit margin increased again to 76.4% (2022:
74.4%) as the Group continues to focus on the quality of revenue and the
improvement of our gross profit and Cash EBITDA margins in the medium to long
term.
Administrative expenses
Reported administrative expenses increased 14.4% to $104.3m in the year, while
underlying administrative expenditure increased by 14.7% to $91.3m. This
increase includes the impact of 82 new headcount joining the business from the
three acquisitions completed in 2023 from both a staff cost perspective as
well as other expenses such as rent and travel.
Share-based payment costs increased by 21.2% to $3.2m, reflective of key
management incentive arrangements being granted in 2023, which included the
CEO, and an all-other staff share-based payment award granted in summer 2023.
2023 2022
$000 $000
Administrative expenses as reported 104,308 91,209
Capitalised development expenditure (1) 2,839 2,155
Amortisation related to acquired intangibles (2,811) (1,667)
Share-based payments (3,187) (2,629)
Amortisation and depreciation (2) (7,832) (10,744)
Property lease payments not in administrative expense (1) 668 1,430
Impairment of intangible assets (6) (32)
Acquisition and integration expenses (2,690) (137)
Underlying administrative expenditure 91,289 79,585
(1) See consolidated cash flow statement.
(2) This excludes acquired intangibles but includes depreciation on right
of use assets.
Cash EBITDA
The Group delivered Cash EBITDA for the year of $23.6m, an 8.4% reduction on
2022 but ahead of our expectations for the year. Cash EBITDA margin was 16% in
2023 as this was our first year of full headcount post pandemic. Looking
forward, as revenue grows, we see our Cash EBITDA margin increasing.
The table below sets out a reconciliation between statutory operating profit
and Cash EBITDA:
2023 2022
$000 $000
Operating profit 9,939 12,751
Add: acquisition expenses 2,690 137
Add: Amortisation related to acquired intangibles 2,811 1,667
Add: Share-based payments 3,187 2,629
Add: Impairment of intangibles 6 32
Add: Amortisation and depreciation (excluding acquired intangibles) 7,832 10,744
Deduct: Capitalised internal development costs (2,839) (2,155)
Cash EBITDA 23,626 25,805
The Group recorded an operating profit of $9.9m in 2023 (2022: $12.8m); and
Adjusted basic earnings per share decreased to 37.48 cents (2022: 35.93
cents).
Development expenditure
2023 2022
$000 $000
Total development expenditure 48,518 43,174
% of total revenue 32.5% 30.9%
Our total development expenditure for 2023 increased to $48.5m, 12.4% higher
than 2022. The spend includes the additional headcount from the Horizon and
Paradox acquisitions as well as $3.3m of cost incurred in relation to the
development of the accesso Freedom product launched in November 2023.
Development expenditure represents all expenses incurred by the Group's
Engineering and Product Management functions, predominantly comprising payroll
and software related costs. These functions maintain our existing solutions
and work with our customers to ensure the Group's products are well positioned
to meet customer needs. In addition, these functions also perform research and
development activities based on the product roadmaps which set out the planned
features and releases over time.
The Group capitalises elements of development expenditure where it is
appropriate and in accordance with IAS 38 Intangible Assets. Capitalised
development expenditure of $2.8m (2022: $2.2m) represents 5.9% (2022: 5.2%) of
total development expenditure. The Group's research and development is
primarily focused on improving existing customer products, which in turn leads
to increased customer satisfaction and retention, rather than a focus on
creating new revenue streams. It continues to be critical 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 year has decreased to $31.5m from $64.7m at 31
December 2022.
2023 2022
$000 $000
Cash in hand & at bank 51,814 64,663
Less: Borrowings (including capitalised finance costs) (20,349) -
Net cash 31,465 64,663
The Group has maintained a strong net cash position with net cash inflow from
operating activities of $25.7m. (2022 Net inflow of $14.5m) offset by $52.6m
used in investing activities. This included $50.0m spent on the three
acquisitions net of cash acquired.
The Group generated $12.5m from financing activities. This included outflows
of $3.7m of shares purchased by the Group's Employee Benefit Trust and $2.2m
on the purchase and cancellation of accesso's own shares through the buyback
programme.
On 26 May 2023, the Group secured a $40.0m revolving credit facility with a
four-year term, to May 2027, accompanied by a $20.0m accordion option. As at
31 December 2023, the Group had drawn $21.2m ($20.4m net of finance costs)
which was used to partially fund the three acquisitions made by the Group.
This facility replaces the Group's undrawn £18.0m arrangement with Investec
from 19 March 2021, which was due to expire in March 2024. The Investec
facility has been cancelled.
Dividend and share repurchases
The Board maintains its consistent view that the payment of a dividend is
unlikely in the short to medium term with surplus cash more efficiently
invested in share repurchases, strategic product development or, where the
opportunities arise, value accretive acquisitions.
During the year, the Board approved a share repurchase programme of up to
£4.0m. As at the year end, the Company had repurchased and cancelled a total
of 299,272 shares for a total of $2.2m (GBP £1.8m). The programme was
concluded on February 29, 2024 with a total repurchase and cancellation of
706,984 shares for a total consideration of $5.0m (GBP £4.0m).
Employee Benefit Trust
The Group funded the trustees of the Employee Benefit Trust in January 2023 to
enable the trustees to purchase 374,971 shares at a total cost of $3.7m. The
shares are held by the trustees and will be used to satisfy awards granted
under the Company's employee share plans that are expected to vest in future
years.
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. As a result, the Group recognised a $0.01m
impairment charge in the year over previously capitalised research and
development projects where they were no longer expected to generate economic
benefit.
Taxation
The tax charge of $1.1m represents an effective tax rate on the $8.8m of
statutory profit before tax of 12.7% (2022: 19.0%).
The key reconciling items to actual tax rates are: $1.0m in relation to
additional deferred tax assets recognised for losses at a US State level and
US state level current tax adjustments; a combined $1.0m relating to the
adjustment of R&D estimates from the prior period and the utilisation of
R&D credits during the year; offset by subsidiary profits generated in
non-US territories being charged at lower taxable rate when compared to our
blended US tax rate of 27.67%.
Fern MacDonald
Chief Financial Officer
15 April 2024
Consolidated statement of comprehensive income
for the financial year ended 31 December 2023
2023 2022
Notes $000 $000
Revenue 149,515 139,730
Cost of sales (35,268) (35,770)
Gross profit 114,247 103,960
(104,308) (91,209)
Administrative expenses
Operating profit before exceptional items 12,635 12,920
Acquisition and integration related expenditure (2,690) (137)
Impairment of intangible assets (6) (32)
Operating profit 9,939 12,751
Finance expense (2,084) (566)
Finance income 953 232
Profit before tax 8,808 12,417
Income tax expense (1,116) (2,361)
Profit for the period 7,692 10,056
Other comprehensive income/(loss)
Items that will be reclassified to income statement
Exchange differences on translating foreign operations 3,138 (5,283)
3,138 (5,283)
Total comprehensive income 10,830 4,773
All profit and comprehensive income is attributable to the owners of the
parent
Earnings per share expressed in cents per share:
Basic 9 19.19 24.41
Diluted 9 18.67 23.45
All activities of the Company are classified as continuing.
Consolidated statement of financial position
as at 31 December 2023
31 December 2023 31 December 2022
Registered Number: 03959429
Notes $000 $000
Assets
Non-current assets
Intangible assets 11 165,188 110,420
Property, plant and equipment 12 1,346 1,603
Right of use assets 1,609 980
Contract assets 784 314
Deferred tax assets 8 16,703 15,279
185,630 128,596
Current assets
Inventories 1,115 499
Finance lease receivables 165 -
Contract assets 3,345 3,694
Trade and other receivables 29,700 28,785
Income tax receivable 2,199 1,864
Cash and cash equivalents 51,814 64,663
88,338 99,505
Liabilities
Current liabilities
Trade and other payables 34,939 32,090
Lease liabilities 792 451
Contract liabilities 7,353 4,920
Income tax payable 6,115 574
49,199 38,035
Net current assets 39,139 61,470
Non-current liabilities
Deferred tax liabilities 8 8,821 3,294
Contract liabilities 927 616
Lease liabilities 1,177 769
Borrowings 13 20,349 -
31,274 4,679
Total liabilities 80,473 42,714
Net assets 193,495 185,387
Shareholders' equity
Called up share capital 14 603 597
Share premium 153,948 153,621
Retained earnings 31,196 22,887
Merger relief reserve 19,641 19,641
Translation reserve (2,446) (5,584)
Own shares held in trust (9,451) (5,775)
Capital Redemption Reserve 4 -
Total shareholders' equity 193,495 185,387
Consolidated statement of cash flow
for the financial year ended 31 December 2023
2023 2022
Notes $000 $000
Cash flows from operations
Profit for the period 7,692 10,056
Adjustments for:
Depreciation (excluding leased assets) 12 975 1,227
Depreciation on leased assets 467 773
Amortisation on acquired intangibles 11 2,811 1,667
Amortisation on development costs and other intangibles 11 6,390 8,744
Impairment of intangibles 11 6 32
Loss on disposal of property, plant and equipment 207 135
Share-based payment 3,187 2,629
Movement on bad debt provision 41 15
Finance expense 2,084 566
Finance income (953) (232)
Foreign exchange gain (187) (31)
Income tax expense 8 1,116 2,361
RDEC tax credits - (141)
23,836 27,801
Increase in inventories (614) (231)
Decrease/(increase) in trade and other receivables 2,082 (10,482)
Increase in contract assets/contract liabilities 1,960 435
Increase/(decrease) in trade and other payables 432 (797)
Cash generated from operations 27,696 16,726
Tax paid (2,003) (2,259)
Net cash inflow from operating activities 25,693 14,467
Cash flows from investing activities
Acquisition of VGS Companies (net of cash acquired) 10 (39,323) -
Acquisition of Paradocs Solutions, Inc. (net of cash acquired) 10 (8,845) -
Acquisition of Boxer Consulting Limited (net of cash acquired) 10 (1,792) -
Capitalised internal development costs 11 (2,839) (2,155)
Purchase of intangible assets 11 (14) (1,140)
Proceeds from sale of intangible assets - 25
Purchase of property, plant and equipment (638) (725)
Proceeds from sale of property, plant and equipment 8 -
Interest received 805 210
Net cash (used in) investing activities (52,638) (3,785)
Cash flows from financing activities
Share issue 129 118
Purchase of shares held in trust (3,676) (5,775)
Purchase of own shares for cancellation (2,186) -
Interest paid (1,387) (330)
Payments on property lease liabilities (668) (1,430)
Proceeds from property lease receivables 33 -
Cash paid to refinance (1,040) -
Proceeds from borrowings 13 35,000 -
Repayments of borrowings 13 (13,750) -
Payment made to cancel equity settled option awards - (129)
Net cash generated from/(utilised in) financing activities 12,455 (7,546)
(Decrease)/increase in cash and cash equivalents (14,490) 3,136
Cash and cash equivalents at beginning of year 64,663 64,050
Exchange gain/(loss) on cash and cash equivalents 1,641 (2,523)
Cash and cash equivalents at end of year 51,814 64,663
Consolidated statement of changes in equity
for the financial year ended 31 December 2023
Share capital Share premium Retained Merger relief reserve Own shares held in trust Capital redemption reserve Translation reserve Total
earnings
$000 $000 $000 $000 $000 $000 $000 $000
Balance at 1 January 2023 597 153,621 22,887 19,641 (5,775) - (5,584) 185,387
Comprehensive income for the year
Profit for period - - 7,692 - - - - 7,692
Other comprehensive income
Exchange differences on translating foreign operations - - - - - - 3,138 3,138
Total comprehensive income for the year - - 7,692 - - - 3,138 10,830
Issue of share capital 9 120 - - - - - 129
Share-based payments - - 3,187 - - - - 3,187
Share option tax charge - current - - 894 - - - - 894
Share option tax charge - deferred - - (1,274) - - - - (1,274)
Re-purchase of shares to be held in trust - - - - (3,676) - - (3,676)
Re-purchase of shares for cancellation (4) - (2,190) - - 4 (2,190)
Contingent consideration settled in shares 1 207 - - - - - 208
Total contributions by and distributions by owners 6 327 617 - (3,676) 4 - (2,722)
Balance at 31 December 2023 603 153,948 31,196 19,641 (9,451) 4 (2,446) 193,495
Balance at 1 January 2022 596 153,504 9,753 19,641 - - (301) 183,193
Comprehensive income for the year
Profit for period - - 10,056 - - - - 10,056
Other comprehensive income
Exchange differences on translating foreign operations - - - - - - (5,283) (5,283)
Income tax credit on items recorded in other comprehensive income - - - - - - - -
Total comprehensive income for the year - - 10,056 - - - (5,283) 4,773
Contributions by and distributions to owners
Issue of share capital 1 117 - - - - - 118
Share-based payments - - 2,576 - - - - 2,576
Share option tax charge - current - - 143 - - - - 143
Share option tax charge - deferred - - 448 - - - - 448
Cancellation of share options - - (89) - - - - (89)
Re-purchase of shares to be held in trust - - - - (5,775) - - (5,775)
Total contributions by and distributions by owners 1 117 3,078 - (5,775) - - (2,579)
Balance at 31 December 2022 597 153,621 22,887 19,641 (5,775) - (5,584) 185,387
Notes to the consolidated financial statements
for the financial year ended 31 December 2023
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. These
consolidated financial statements 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 licenced 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 licenced
to the operator for their operation.
Exemption from audit
For the year ended 31 December 2023 accesso Technology Group plc has provided
a guarantee in respect of all liabilities due by its subsidiaries Ingresso
Group Limited (company number 07477714) and Lo-Q Limited (company number
08760856). This entitles them to exemption from audit under 479A of the
Companies Act 2006 relating to subsidiary companies.
2. Basis of accounting
The preliminary results for the year ended 31 December 2023 and the results
for the year ended 31 December 2022 are prepared under UK-adopted
international accounting standards ("UK-adopted IFRS") and applicable law.
The accounting policies adopted in this preliminary announcement are
consistent with the Annual Report for the year ended 31 December 2023.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2023 or 2022 but is derived
from those accounts. Statutory accounts for 2022 have been delivered to the
registrar of companies, and those for 2023 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
UK-adopted IFRS, this announcement does not itself contain sufficient
information to comply with UK-adopted 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 15 April 2024.
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 2022, 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:
§ Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2)
§ Definition of Accounting Estimates (Amendments to IAS 8)
New standards and interpretations not yet adopted
A number of new standards, amendments to standards, and interpretations are
either not effective for 2023 or not relevant to the Group, and therefore have
not been applied in preparing these accounts. These standards, amendments or
interpretations are not expected to have a material impact on the entity in
the current or future reporting periods and on foreseeable future
transactions.
§ Classification of Liabilities as Current or Non-Current (Amendments to
IAS 1)
§ Lease Liabilities in a Sale and Leaseback (Amendments to IFRS 16)
§ Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
§ Non-current Liabilities with Covenants (Amendments to IAS 1)
§ Lack of Exchangeability (Amendments to IAS 21)
4. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial
statements 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 and the Employee
Benefit Trust as at 31 December 2023 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. Provisional fair values
are adjusted against goodwill if additional information is obtained within one
year of the acquisition date about facts or circumstances existing at the
acquisition date.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used
by the Group.
Investments, including the shares in subsidiary companies held as non-current
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.
accesso Technology Group Employee Benefit Trust is considered to be a special
purpose entity in which the substance of the relationship is that of control
by the Group in order that the Group may benefit from its control. The assets
held by the trust are consolidated into the Group financial statements.
All intra-Group transactions, balances, income and expenses are eliminated on
consolidation.
Contingent consideration
Contingent consideration is recognised at fair value at the acquisition date
and is based on the actual and/or expected performance of the entity in which
the contingent consideration relates. Contingent consideration is subject to
the sellers fulfilling their performance obligations over the contingent
period. Subsequent changes to the fair value of contingent consideration are
based on the movement of the Group's share price at the reporting date. These
changes which are deemed to be a liability are recognised in accordance with
IFRS 9 in the statement of comprehensive income.
Going concern
The financial statements have been prepared on a going concern basis which the
Directors consider to be appropriate for the following reasons.
For the purposes of the going concern assessment, the Directors have prepared
monthly cash flow projections for a period of 12 months post the date of
approval of the financial statements (base scenario). The cash flow
projections show that the Group has significant headroom against its committed
facilities and can meet its financial covenant obligations.
The Directors have reviewed sensitised net cash flow forecasts for the same
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 over the next 12 months
reflecting the full financial impact of a sustained material event, which
reduces forecast revenues by 10% in comparison to the base scenario referenced
above, and results in revenue of $144.7m for 2024 and marginally decreases
thereafter. Under this same scenario, underlying administrative spend
increases to $99.9m in 2024, from $91.5m in 2023, with marginal decreases
thereafter for the same corresponding periods to reflect cost cutting measures
that would be implemented. The severe but plausible downside scenario
indicates that the Group's net cash balance reaches a low point of $17.1m.
At 31 December 2023, the Group has cash of $51.8m and drawings on the loan
facility of $21.3m with a further $18.7m of the total $40.0m remaining
available. Financial covenants on the facility were passed during 2023 and are
forecast to be passed through the going concern assessment period both under a
base case and a severe but plausible scenario. The Group is in the process of
acceding two additional entities to act as guarantors to continue to meet the
general undertakings of the facility, refer to note 13 for further details.
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 12 months from the date of signing and therefore have
prepared the financial statements 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.
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 licence The transaction price is allocated in accordance with management's estimate of
distribution (installed on premise) for terms between one and three years. The customer the standalone selling price for each performance obligation, which is based
also receives support for typically a period of one year. This support is not on observable input costs and a target margin.
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 licences 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. This option to renew is not considered a material
right.
The revenue recognition of POS licences 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 licence The transaction price is allocated using observable market inputs, 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 its stand-alone selling
distinct performance obligation from the right to use the software licence. price.
The customer has an option to renew the licence 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. Where the contract contains a substantial termination
penalty, it is considered that there is no option to renew and as such these Revenue from sale of annual software licences is recognised at a point in time
contracts do not include a separate performance obligation for a material when the customer has been provided with the software. The revenue is
right of renewal. recognised at a point in time because the licence provides the customer with
the right of use of the software as it exists and is fully functional from the
Invoices are raised at the beginning of each contract for the software licence date it is provided to the customer.
and annual support and maintenance. Subsequently, invoices are raised at each
anniversary of the contract for annual support and maintenance (as software Revenue from sale of multi-year software licence contracts is spread as the
licence is renewed at no additional cost). 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 licence
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.
Revenue from the sale of multi-year software licences containing a substantial
termination penalty is not deferred and instead recognised at a point in time.
It is considered that these contracts do not contain an option to renew.
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.
c.Software licences and bundled implementation services - Ticketing and Each contract provides the customer with the right to use a customised Revenue from the sale of customised licenses is recognised over time as the
distribution software licence (installed on premise). The software license is sold asset is created and control passes to the customer.
alongside interdependent implementation services that are not considered to be
a separate obligation from the license.
The output method is adopted where the Group's right to consideration
corresponds directly with the completed milestones performance obligations.
Invoices are raised at predetermined milestones set out within the contract. Revenue for these customers is recognised in line with the amount of revenue
The milestones correspond with the value being received by the customer and the Group is entitled to invoice.
reflect the value of progress toward completion of the obligation.
d. Virtual queuing system - Guest Experience Virtual queuing systems are installed at a client's location, and revenue is Revenues are recognised when the park guest purchases virtual queuing services
recognised when a park guest uses the service as a sales or usage-based from the attraction owner, being the later of sale or usage, and the
royalty. The Group's performance obligation is to provide a right to access, satisfaction of the performance obligation to which that sale or usage-based
and the necessary technical support to, its virtual queuing platform, with royalty has been allocated.
which the park provides virtual queueing services to the park guest. The
Group's contracts are with the attraction owner, not park guest.
e. Ticketing and eCommerce revenue - Ticketing and distribution The Group's performance obligation is the provision of a right to access, and Ticketing and eCommerce revenue is recognised at the time the ticket is sold
necessary specified technical support to, its ticketing and eCommerce through our platform, or the transaction takes place, within that distinct
platform, over a distinct series of service periods. Invoices are issued series of service periods. accesso recognises the fee it receives for
monthly and are generally payable within thirty days. processing the transaction as revenue.
f. Professional services - Ticketing and distribution and Guest Experience Professional services revenue is typically providing customised software The output method is adopted where the Group's right to consideration
development and in general is agreed with the customer and billed at each corresponds directly with the completed monthly performance obligation.
month end. Certain contracts span longer time periods whereby the Group Revenue for these customers is recognised in line with the amount of revenue
carries out customisation and delivers software releases to customers at the Group is entitled to invoice.
predetermined milestones.
Bespoke professional services work is recognised over time where the Group has
enforceable rights to revenue in the event of cancellation. The Group is
entitled to compensation for performance completed to date in the event that
the customer terminates the contract. This compensation would be sufficient to
cover costs and a reasonable proportion of the expected margin.
The Group recognises revenue over time using the input method (hours/total
budgeted hours) when this method best depicts the Group's performance of
transferring control.
g. 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.
h. 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 are
considered for impairment on an expected credit loss model. These assets have
historically had immaterial levels of bad debt and are with creditworthy
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 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
2022 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 a business 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.
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 13 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 income statement.
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 3 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 to 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 (2022: $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.
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. Under IFRS 9, the Group
applies the simplified approach to measure the loss allowance at an amount
equal to the lifetime expected credit losses for trade receivables. Trade
receivables are also specifically impaired where there are indicators of
significant financial difficulties for the counterparty or there is a default
or delinquency in payments. 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.
· 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, accruals 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. Where bank borrowings are denominated in foreign currency, they
are translated into the functional currency at the exchange rate at the
reporting date. with the corresponding net gain or loss recorded within
interest expense. 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.
Employee Benefit Trust (EBT)
As the Company is deemed to have control of its EBT, it is treated as an
extension of the parent Company and is included in the consolidated financial
statements. It is also included in the Company balance sheet as it is treated
as an extension of the Company. 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
and Company statements of financial position as if they were treasury shares.
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 and those being short-term, below 12 months in duration. 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.
As a lessor
As a lessor, the Group classifies its leases as either operating or finance
leases. A lease is classified as a finance lease if it transfers substantially
all the risks and rewards incidental to ownership of the underlying asset, and
classified as an operating lease if it does not. The Group has not currently
entered into any lease that is classified as an operating lease.
At the commencement of the finance lease, the Group recognises a lease
receivable that equates to the net investment in the lease, which comprises
the lease payments receivable discounted using the Group's incremental
borrowing rate.
Exceptional items
Items that are non-operating or non-recurring in nature are presented as
exceptional items in the consolidated income statement, within the relevant
account heading. The Directors are of the opinion that the separate recording
of exceptional items provides helpful information about the Group's underlying
business performance. Events which may give rise to the classification of
items as exceptional include but are not restricted to impairment charges over
the Group's internally developed and acquired intangibles and costs relating
to business acquisitions along with any subsequent integration &
reorganisation cost.
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 these consolidated financial statements, 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 statements 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; $2.84m
has been capitalised on new projects during 2023 (2022: $2.16m). 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.
Within Intangible Assets at the year end is $2.8m capitalised in relation to a
new product that launched to the market in November 2023. A key assumption in
the future economic viability of this product is the successful signing of
contracts with customers in the period subsequent to the year end. Given the
early stage of the product in its life cycle, there is uncertainty in the
number of contracts that will be obtained and a significant variation from
expectations could result in a value in use below the carrying value.
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 17, for the carrying value of capitalised
development costs.
Deferred tax asset on US losses and tax credits
The Group has recognised a deferred tax asset of $3.8m derived from US tax
credits (with 20-year expiry dates ranging from 2037 to 2042). The recognition
of this asset is based on the expected profitability of the US entities using
the Group's 5-year Board-approved forecasts, which indicates that such credits
would be utilised by the fiscal year ending 31 December 2024. According to the
enacted legislation, these tax credits can be used to offset a current income
tax liability greater than $25K, for up to 75% of the said liability. The key
inputs are not sensitive to plausible changes in the assumptions. In addition,
to the expected profitability of the US entities, the said credits were
assessed under guidelines established under section 382 of the current US tax
legislation, which sets out that these would be restricted if there is deemed
to have been an ownership change of greater than 50% over the assessment
period. This assessment concluded any ownership change was below 50% resulting
in no restriction on the credits available for use. The need for an assessment
under the above-mentioned section of the US legislation will be monitored
closely for its future applicability.
Identification of separable intangibles on acquisition
Identification of separable intangibles on acquisition are recognised when
they are controlled through contractual or other legal rights, or are
separable from the rest of the business, and their fair value can be reliably
measured. Customer relationships and acquired technology have been identified
by management as separate intangible assets and can be reliably measured by
valuation of future cash flows.
Uncertain tax positions
The Group has undertaken a review of potential tax risks and current tax
assessments, refer to note 8 for further details of the liabilities recognised
and the assumptions and judgements taken. These liabilities recognised cover
the Group's position taken on Research & Development credits available
within the US as well as liabilities in relation to the application of the
Group's transfer pricing policies.
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:
Valuation of separable intangibles on acquisition (not subject to annual
update)
When valuing the customer relationships and technology acquired in a business
combination, management estimate the expected future cash flows from the asset
and select a suitable discount rate in order to calculate the present value of
those cash flows. Separable intangibles valued on acquisitions made in the
year were $8.9m (2022: nil) in respect of customer relationships, $11.4m
(2022: nil) in respect of technology as defined further in note 11.
Impairment of non-financial assets (subject to annual update)
The Group assesses whether there are any indicators of impairment for all
non-financial assets at each reporting date. Goodwill is tested for impairment
annually and at other times when such indicators exist. Other non-financial
assets are tested for impairment when there are indicators that the carrying
amounts may not be recoverable. When value in use calculations are undertaken,
management must estimate the expected future cash flows from the asset or
cash-generating unit and choose a suitable discount rate in order to calculate
the present value of those cash flows. Further details are given in note 11.
Useful economic lives of capitalised development costs (subject to annual
update)
The Group amortises its capitalised development costs over 3 to 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 $1,795k higher and
$789k lower respectively. Management review this estimate each year to ensure
it is reflective of the technologies being developed.
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 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.
o accesso Paradox cutting-edge software solution specifically tailored to
the unique needs of the industry. The flexible, hosted solution empowers ski
areas to take full control of their operations across ticketing and passes,
snow school, retail, equipment rental, food & beverage, administration,
and online sales in one, unified platform.
o accesso Horizon highly functional and best-in-class ticketing and visitor
management solution leveraging an innovative portfolio model approach to guest
management.
The Group's Guest Experience reportable 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 Mobile Applications experience management platforms which delivers
personalised real-time immersive customer experiences at the right time,
elevating the guest's experience and loyalty to the brand.
o accesso Freedom: recently launched point of sale system enabling modules
in food and beverage, retail, eCommerce via kiosk or mobile through a
multi-tenanted hosted solution.
The Group's virtual queuing solution (accesso LoQueue), experience management
platforms (Mobile Platforms), and food and beverage retail system (accesso
Freedom) are headed by segment managers who discuss the operating activities,
financial results, forecasts and plans of their respective segments with the
CODM. These three distinct operating segments share similar economic
characteristics, expected long term financial performance, customers and
markets; the products are heavily bespoke, technology and software intensive
in their delivery and are directly targeted at improving a guest's experience
of an attraction or entertainment venue, whilst providing cross-selling
opportunities and increased revenues to the venues. Management therefore
conclude that they meet the aggregation criteria.
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 reportable 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.
2023 2022
$000 $000
Ticketing and Distribution 104,024 95,256
Guest Experience 45,491 44,474
Total revenue 149,515 139,730
Ticketing and Distribution Guest Central unallocated Group
Experience costs
Year ended 31 December 2023 $000 $000 $000 $000
Revenue 104,024 45,491 - 149,515
Cost of sales (20,768) (14,324) (176) (35,268)
Central unallocated administrative expenses - - (90,621) (90,621)
Cash EBITDA (1) 83,256 31,167 (90,797) 23,626
Capitalised development spend 2,839
Depreciation and amortisation (excluding acquired intangibles) (7,832)
Amortisation related to acquired intangibles (2,811)
Impairment of intangible assets (6)
Share-based payments (3,187)
Exceptional costs relating to acquisitions (2,690)
Finance income 953
Finance expense (2,084)
Profit before tax 8,808
Ticketing and Distribution Guest Central unallocated Group
Experience costs
Year ended 31 December 2022 $000 $000 $000 $000
Revenue 95,256 44,474 - 139,730
Cost of sales (19,437) (15,947) (386) (35,770)
Central unallocated administrative expenses - - (78,155) (78,155)
Cash EBITDA (1) 75,819 28,527 (78,541) 25,805
Capitalised development spend 2,155
Depreciation and amortisation (excluding acquired intangibles) (10,744)
Amortisation related to acquired intangibles (1,667)
Impairment of intangible assets (32)
Share-based payments (2,629)
Exceptional costs relating to IP acquisition (137)
Finance income 232
Finance expense (566)
Profit before tax 12,417
(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.
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) by geographical location are detailed below:
Revenue Non-current assets
2023 2022 2023 2022
$000 $000 $000 $000
UK 25,644 27,077 24,830 22,833
Italy* 713 500 39,675 -
Germany* 2,848 2,327 7 7
France* 1,359 755 - -
Spain* 1,386 279 - -
Netherlands* 1,012 1,406 - -
Ireland* 382 251 2,131 -
Other Europe* 749 796 - -
Australia* 5,788 5,705 9 -
Japan* 1,754 277 - -
Singapore* 402 23 2,545 -
Other Asia/South Pacific* 1,252 771 8 44
USA 95,724 92,561 86,063 90,050
Canada 4,536 3,518 10,863 -
Mexico 3,761 2,865 47 30
Other Central and South America 903 619 12 39
United Arab Emirates* 1,109 - 1,953 -
Africa 193 - - -
149,515 139,730 168,143 113,003
*This disclosure has been enhanced to present disaggregated revenue and
non-current assets for Italy, Germany, France, Spain, the Netherlands,
Ireland, Australia, United Arab Emirates, Japan and Singapore in 2022. Italy,
Germany, France, Spain, the Netherlands and Ireland were previously disclosed
aggregated with Other Europe. Australia, Japan, and Singapore were previously
disclosed aggregated with Australia/South Pacific/Asia.
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 $8.5m (2022:
$7.0m) of Ticketing and Distribution revenue and for $14.3m (2022: $17.1m) of
Guest Experience revenue. The second park and attractions operator accounted
for $15.2m (2022: $13.9m) of Ticketing and Distribution revenue and for $7.4m
(2022: $5.5m) of Guest Experience revenue.
8. Tax
The table below provides an analysis of the tax charge for the periods ended
31 December 2023 and 31 December 2022:
2023 2022
$000 $000
UK corporation tax
Current tax on income for the period 946 750
Adjustment in respect of prior periods (364) (40)
582 710
Overseas tax
Current tax on income for the period 2,115 690
Adjustment in respect of prior periods 933 453
3,048 1,143
Total current taxation 3,630 1,853
Deferred taxation
Original and reversal of temporary difference - for the current period (1,094) 1,641
Impact on deferred tax rate changes 170 (967)
Original and reversal of temporary difference - for the prior period (1,590) (166)
(2,514) 508
Total taxation charge 1,116 2,361
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:
2023 2022
$000 $000
Profit on ordinary activities before tax 8,808 12,417
Tax at United States tax rate of 27.67% (2022: 26.87%) 2,437 3,336
Effects of:
Expenses not deductible for tax purposes (61) 30
Profit subject to foreign taxes at a lower marginal rate 714 (195)
Adjustment in respect of prior period - income statement (1,021) 247
Research and Development credit estimation adjustment (697) -
Research and Development credits utilised (351) (141)
Share options (177) 195
Impact of rate changes 170 (967)
Other 102 (144)
Total taxation charge 1,116 2,361
Deferred taxation Asset Liability
$000 $000
Group
At 31 December 2021 16,260 (4,236)
(Charged)/credited to income (1,404) 896
Credited directly to equity 448 -
Foreign currency translation (25) 46
At 31 December 2022 15,279 (3,294)
Credited to income 2,573 (59)
Credited directly to equity (1,274) -
Foreign currency translation 40 (22)
Acquired through business combination 85 (5,446)
At 31 December 2023 16,703 (8,821)
Company
At 31 December 2021 - (336)
Charged to income 22 134
Credited directly to equity (18) -
Foreign currency translation (9) 44
Netted against the asset 5 5
At 31 December 2022 - (163)
Charged to income 19 (31)
Credited directly to equity (17) -
Foreign currency translation 5 (13)
Netted against the asset (7) 7
At 31 December 2023 - (200)
The following table summarises the recognised deferred tax asset and
liability:
2023 2022
Restated*
Group $000 $000
Recognised asset
Tax relief on unexercised employee share options 1,930 3,034
Short-term timing differences 2,829 6,903*
Net operating losses & tax credits 4,552 5,342*
Capitalised R&D Expenditure 7,392 -
Deferred tax asset 16,703 15,279
Recognised liability
Capital allowances in excess of depreciation (703) (204)
Short-term timing differences (745) (1,025)
Business combinations (7,373) (2,065)
Deferred tax liability (8,821) (3,294)
Company
Recognised asset
Tax relief on unexercised employee share options 60 57
Short-term timing differences 32 28
Offset against Company deferred tax asset (92) (85)
Deferred tax asset - -
Recognised liability
Capital allowances in excess of depreciation (292) (248)
Offset against Company deferred tax asset 92 85
Deferred tax liability (200) (163)
*Restatement of prior year deferred tax asset
The deferred tax asset balances recognised in respect of the US, for the year
ended 31 December 2022, were calculated considering that the revised version
of Section 174 of the US Internal Revenue Code, would be repealed. This
legislation was not repealed as expected and remained in force, resulting in a
restatement of the 31 December 2022 deferred tax asset balances, to reflect
the reclassification of some of the amounts recognised. The total deferred tax
asset of $15.3m remains the same, however short-term timing differences have
been restated to $6.9m, previously $2.7m, and net operating losses & tax
credits have been restated to $5.3m, previously $9.6m.
The tax rate in the US rate remained at 21%, before state taxes. Deferred tax
assets and liabilities were measured at a rate 21% (2022: 21%) plus state
taxes in the US.
An increase in the UK corporation rate from 19% to 25% (effective 1 April
2023) was substantively enacted on 24 May 2022. This will increase the
Company's future current tax charge accordingly. The deferred tax assets and
liabilities at 31 December 2023 have been calculated based on these rates,
reflecting the expected timing of reversal of the related temporary and timing
differences (2022: 25%).
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 policies 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 $1.3m (2022: $0.9m) in relation to
availability of international R&D claims. A further provision of $5.1m
(2022: $0.0m) has been recognised, in connection with tax liabilities
inherited in the entities acquired during the year ended 31 December 2023.
This provision has been calculated in accordance with the Group's transfer
pricing policies.
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
continue to be performed 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. Own shares held by the Employee Benefit Trust
are eliminated from the weighted average number of shares.
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.
2023 2022
$000 $000
Profit attributable to ordinary shareholders ($000) 7,692 10,056
Basic EPS
Denominator
Weighted average number of shares used in basic EPS (000s) 40,075 41,196
Basic earnings per share (cents) 19.19 24.41
Diluted EPS
Denominator
Weighted average number of shares used in basic EPS (000s) 40,075 41,196
Effect of dilutive securities
Options (000s) 1,034 1,692
Contingent share consideration on business combinations (000s) 88
Weighted average number of shares used in diluted EPS (000s) 41,197 42,888
Diluted earnings per share (cents) 18.67 23.45
2023 2022
$000 $000
Adjusted EPS
Profit attributable to ordinary shareholders ($000) 7,692 10,056
Adjustments for the period related to:
Amortisation relating to acquired intangibles from acquisitions 2,811 1,667
Impairment of intangible assets 6 32
Acquisition expenses 2,690 -
Share-based compensation and social security costs on unapproved options 3,187 2,629
16,386 14,384
Net tax related to the above adjustments (2023: 16.7%, 2022: 9.7%): (1,365) 418
Adjusted profit attributable to ordinary shareholders ($000) 15,021 14,802
Adjusted basic EPS
Denominator
Weighted average number of shares used in basic EPS (000s) 40,075 41,196
Adjusted basic earnings per share (cents) 37.48 35.93
Adjusted diluted EPS
Denominator
Weighted average number of shares used in diluted EPS (000s) 41,197 42,888
Adjusted diluted earnings per share (cents) 36.46 34.51
1,040,511 LTIP awards were excluded in the calculation of diluted EPS as at 31
December 2023 (2022: nil) as a result of exercise conditions contingent of the
satisfaction of certain criteria that had not been met.
10. Business combinations
During the year, the Group completed 3 acquisitions to create shareholder
value by adding depth and breadth to the Group's software solutions and
available resources.
Goodwill acquired in the business combinations represent a payment made by the
acquirer in anticipation of future economic benefits from assets that are not
capable of being individually identified and separately recognised. Goodwill
is not deductible for tax purposes. Acquisition balance sheets are deemed
provisional when the post-acquisition integration period, typically up to 12
months post-acquisition, has yet to complete.
During the year, the Group made the following acquisitions which individually
represent 5% or more of the total Enterprise Value of all acquisitions made
during the year.
Acquisition of VGS companies (now accesso Horizon)
On 20 June 2023, the Group entered into a share purchase agreement to acquire
100% of the share capital of four VGS entities (VGS S.r.l., VGS ME DMCC, VGS
Asia PtE Ltd. and VGS Holding, Inc.), and an underlying subsidiary, for a
total consideration of $53.6m, paid in cash.
The principal reason for this acquisition was to expand the Group's product
proposition, significantly increase international presence, enhance revenue
diversity, and provide extensive new opportunities for global growth. It also
provides a fundamental building block for the Group's mid-to-long-term product
roadmap.
Acquisition and integration-related costs of $1.77m were incurred in relation
to this acquisition and are included within administrative expenses.
Deferred tax has been provided on the value of the intangible assets at the
tax rate applicable at the time the asset is expected to be realised.
Included in the consolidated statement of income is $4.9m of revenue generated
by VGS and $2.5m profit before tax. If the acquisition had been completed on
the first day of the financial year, VGS would have generated $7.6m revenue
and $3.7m profit before tax.
Fair value
$000
Identifiable intangible assets - acquired technology 5,111
Identifiable intangible assets - customer relationships 8,353
Property, plant and equipment 1,272
Cash 14,275
Receivables and other debtors 4,243
Payables and other liabilities (8,615)
Deferred tax liabilities (3,618)
Total net assets acquired 21,021
Goodwill on acquisition 32,577
Consideration 53,598
Satisfied by:
Cash to vendors 53,598
Acquisition of Paradocs Solutions, Inc. (now accesso Paradox)
On 21 April 2023, the Group acquired 100% of the share capital of Paradocs
Solutions, Inc ("Paradocs") for a total consideration of $10.01m, of which
$9.0m was paid in cash with a further $1.01m in contingently issuable
shares.
The principal reason for this acquisition was to deepen the Group's presence
in the important ski market by acquiring a cutting-edge software solution
specifically tailored to the unique needs of the industry. The flexible,
hosted solution empowers ski areas to take full control of their operations
across ticketing and passes, snow school, retail, equipment rental, food &
beverage, administration, and online sales in one, unified platform.
Acquisition and integration related costs of $0.5m were incurred in relation
to this acquisition and are included within administrative expenses.
Deferred tax has been provided on the value of the intangible assets at the
tax rate applicable at the time the asset is expected to be realised.
Included in the consolidated statement of income is $1.5m of revenue generated
by Paradocs and $1.0m loss before tax. If the acquisition had been completed
on the first day of the financial year, Paradocs would have generated $1.9m
revenue and $1.1m loss before tax.
Fair value
$000
Identifiable intangible assets - customer relationships 550
Identifiable intangible assets - acquired technology 5,790
Property, plant and equipment 156
Cash 155
Receivables and other debtors 848
Payables and other liabilities (918)
Deferred tax liabilities (1,704)
Total net assets acquired 4,877
Goodwill on acquisition 5,130
Consideration 10,007
Satisfied by:
Cash to vendors 9,000
Contingent share consideration to vendors* 1,007
*Contingent share consideration is payable in instalments over a two year
period subject to the sellers fulfilling their performance obligations over
the contingent period. The initial fair value of $1.01m reflects the share
price at the time of the acquisition. Subsequent changes to fair value of
contingent consideration are based on the movement of the Group's share price
at the reporting date. At the year end, the fair value of the contingent
consideration was $0.65m following the first instalment settlement for $0.2m
and subsequent remeasurement of the remaining liability at the reporting date.
Acquisition of Boxer Consulting Limited
On 4 May 2023, the Group acquired 100% of the share capital of Boxer
Consulting Limited ("DigiSoft") for a total consideration of €1.82m ($2.0m).
A total of €1.62m ($1.79m) was paid in cash with a further €0.2m held as
deferred consideration to be paid two years post-completion.
The principal reason for this acquisition was to enable the Group to gain
efficiency, flexibility, and reduce costs by bringing an existing supplier of
mobile development services in-house.
Acquisition and integration related costs of $0.33m were incurred in relation
to this acquisition and are included within administrative expenses.
Deferred tax has been provided on the value of the intangible assets at the
tax rate applicable at the time the asset is expected to be realised.
No disclosure has been made of the revenue and profit before tax as if the
acquisition has been completed on the first day of the financial year or for
the amounts generated by the acquiree following the acquisition. This is due
to the information being impracticable because the acquired entity, DigiSoft,
held no profit or loss activity prior to the acquisition. Digisoft, formerly a
supplier to the Group, incurred costs of $1.3m with external revenues of $0.3m
in the post-acquisition period.
Fair value
$000
Identifiable intangible assets - acquired technology 462
Property, plant and equipment 4
Receivables and other debtors 25
Payables and other liabilities (85)
Deferred tax liabilities (124)
Total net assets acquired 282
Goodwill on acquisition 1,731
Consideration 2,013
Satisfied by:
Cash to vendors 1,792
Deferred cash consideration to vendors 221
The net cash outflow in the current year in respect of acquisitions comprised:
$000
VGS
Cash paid 53,598
Net cash acquired (14,275)
39,323
Paradocs
Cash paid 9,000
Net cash acquired (155)
8,845
DigiSoft
Cash paid 1,792
Net cash acquired -
1,792
Total net cash outflow in respect of acquisitions in the current period 49,960
11. 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 2021 117,376 13,577 469 24,426 779 57,298 213,925
Foreign currency translation (2,236) - - - (96) (1,065) (3,397)
Additions - - - - 1,140 2,155 3,295
Disposals - - - - (717) (71) (788)
At 31 December 2022 115,140 13,577 469 24,426 1,106 58,317 213,035
Foreign currency translation 1,123 8 - 86 67 627 1,911
Additions - - 14 - - 2,839 2,853
Acquisition through business combination 39,438 8,903 - 11,363 1 - 59,705
Disposals - - - - - (497) (497)
At 31 December 2023 155,701 22,488 483 35,875 1,174 61,286 277,007
Amortisation/Impairment
At 31 December 2021 17,403 10,002 466 23,942 695 41,329 93,837
Foreign currency translation - - - - (74) (850) (924)
Charged - 1,183 1 484 198 8,545 10,411
Reversal of impairment - - - - - 32 32
Disposal - - - - (683) (58) (741)
At 31 December 2022 17,403 11,185 467 24,426 136 48,998 102,615
Foreign currency translation - 1 - 13 23 457 494
Charged - 1,369 2 1,442 399 5,989 9,201
Impairment - - - - - 6 6
Disposal - - - - - (497) (497)
At 31 December 2023 17,403 12,555 469 25,881 558 54,953 111,819
Net book value
At 31 December 2023 138,298 9,933 14 9,994 616 6,333 165,188
At 31 December 2022 97,737 2,392 2 - 970 9,319 110,420
Impairment testing of goodwill
The Group is required to test, on an annual basis, whether goodwill has
suffered any impairment or 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:
2023 2022
$000 $000
Ticketing and Distribution (CGU1, 2, 3, 7 and 8) * 108,067 69,235
accesso LoQueue (CGU5) ** 28,500 28,500
Professional services (CGU 9) *** 1,731 -
138,298 97,735
The key assumptions used in the value in use calculations are as follows:
2023 2022
Pre-tax discount rate (%)
Ticketing and Distribution (CGU 1, 2, 3, 7 & 8)* 17.0% 16.6%
accesso LoQueue ** (CGU 5) 17.3% 16.8%
Professional services*** (CGU 9) 17.2% -
Average annual EBITDA growth rate during forecast period (average %)
Ticketing and Distribution (CGU 1, 2, 3, 7 & 8)* 27.8% 19.7%
accesso LoQueue ** (CGU 5) 3.5% 15.1%
Professional services*** (CGU 9) 1.0% -
Terminal growth rate (%)
Ticketing and Distribution (CGU 1, 2, 3, 7 & 8)* 2.0% 2.0%
accesso LoQueue ** (CGU 5) 2.0% 2.0%
Professional services*** (CGU 9) 2.0% -
Period on which detailed forecasts based (years)
Ticketing and Distribution (CGU 1, 2, 3, 7 & 8)* 5 5
accesso LoQueue ** (CGU 5) 5 5
Professional services*** (CGU 9) 5 -
* Comprises the products accesso Passport & Siriusware (CGU1); accesso
ShoWare (CGU2); Ingresso (CGU3); accesso Paradox (CGU7) and accesso Horizon
(CGU8).
** Comprises accesso LoQueue trading within accesso Technology Group plc;
Lo-Q, Inc.; Lo-Q Service Canada Inc. and accesso Australia PTY Limited.
*** Comprises professional services trading within accesso Ireland Limited and
Blazer and Flip Flops Inc. The assets consisting of Professional services are
comprised of the assets derived from the acquisition of accesso Ireland
Limited (formally Boxer Consulting Limited) and certain assets previously
disclosed within The Experience Engine. The Experience Engine CGU was revised
during the year ended 31 December 2023 to reflect the structural changes
within the Group. There was no goodwill or indefinite intangible assets within
the CGU formally known as The Experience Engine in either the current or prior
year.
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 industry and 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.
Sensitivity analysis
A considerable amount of judgement is applied in setting discount rates,
forecasts and terminal values. 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 2023.
Ticketing and Distribution* accesso
LoQueue**
2023 2022 2023 2022
Pre-tax discount rate Increase by 10.8% Increase by 11.7% Increase by 13.2% Increase by 14.7%
EBITDA growth rate during detailed forecast period (average) Reduce by 39.2% Reduce by 45.0% Reduce by 40.1% Reduce by 48.4%
Terminal growth rate Reduce by 28.3% to a terminal rate of -26.3% Reduce by 27.6% to a terminal rate of -25.6% Reduce by 19.9% to terminal rate of -17.9% Reduce by 52.0% to terminal rate of -50.0%
Excess over carrying value ($000) $27,684 $44,791
$92,259 $79,790
* Comprises the products accesso Passport & Siriusware (CGU1); accesso
ShoWare (CGU2); Ingresso (CGU3); accesso Paradox (CGU7) and accesso Horizon
(CGU8).
** Comprises accesso LoQueue trading within accesso Technology Group plc;
Lo-Q, Inc.; Lo-Q Service Canada Inc. and accesso Australia PTY Limited.
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.
There is no reasonably possible change in the key assumptions that would
reduce the recoverable amount of professional services (CGU 9) to equal the
carrying value as the recoverable amount is achieved within the forecast
5-year period.
Environmental risk in cash flows
It is expected that air travel will be reduced in the longer term in response
to climate change agendas and 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.
The below table sets out the intangible asset impairments recorded within
accesso LoQueue, The Experience Engine and the Ticketing and Distribution
segment:
2023 2023 2023 2023 2022 2022 2022 2022
accesso LoQueue Professional services Ticketing and Distribution Total accesso Professional services Ticketing and Distribution Total
LoQueue
$000 $000 $000 $000 $000 $000 $000 $000
Intangible assets - - - - - - - -
Impairment of specific development projects* 6 - - 6 32 - - 32
Impairment charge recorded within administrative expense 6 - - 6 32 - - 32
A review of all project development costs capitalised was performed at year
end with $0.06m impairment charges recorded.
No intangible asset impairment reversals were recorded within the Group during
the current or prior year.
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:
2023 2022
Entity name (and CGU) $000 $000
accesso, LLC & Siriusware, Inc. (CGU 1 and 6) 464 518
ShoWare (CGU 2) - 70
accesso Technology Group plc (CGUs 5 and 6) 974 1,289
12. Property, plant and equipment
The cost and depreciation of the Group's tangible fixed assets are detailed in
the following table:
Installed systems Plant, machinery and office equipment Furniture & fixtures Leasehold improvements Totals
$000 $000 $000 $000 $000
Cost
At 31 December 2021 1,635 3,686 2,023 487 7,831
Foreign currency translation (19) (106) (71) - (196)
Additions 197 516 20 34 767
Disposals (10) (1,088) (836) (244) (2,178)
At 31 December 2022 1,803 3,008 1,136 277 6,224
Foreign currency translation 10 40 33 - 83
Additions 22 411 205 - 638
Acquisition through business combination - 113 83 41 237
Disposals (97) (672) (418) (247) (1,434)
At 31 December 2023 1,738 2,900 1,039 71 5,748
Depreciation
At 31 December 2021 1,078 2,595 1,565 357 5,595
Foreign currency translation (12) (81) (60) - (153)
Charged 414 572 189 52 1,227
Disposals (7) (1,043) (757) (241) (2,048)
At 31 December 2022 1,473 2,043 937 168 4,621
Foreign currency translation 9 73 29 - 111
Charged 180 620 122 53 975
Disposals (87) (648) (383) (187) (1,305)
At 31 December 2023 1,575 2,088 705 34 4,402
Net book value
At 31 December 2023 163 812 334 37 1,346
At 31 December 2022 330 965 199 109 1,603
Refer to note 13 for details of security over the Group's property, plant and
equipment by banking providers.
13. Borrowings
Group Company
2023 2022* 2023 2022*
$000 $000 $000 $000
Bank loans 21,250 - 21,250 -
Arrangement fees, less amortised cost (901) (356) (901) (356)
20,349 (356) 20,349 (356)
*In 2022, while the Group was undrawn on the loan facility with Investec Bank
PLC, capitalised arrangement fees were included within Other Debtors. In 2023,
the capitalised arrangement fees on the loan facility with HSBC UK Bank PLC
are presented net of the bank loan.
On 26 May 2023, the Group secured a $40.0m revolving credit facility with a
four-year term, to May 2027, accompanied by a $20.0m accordion option HSBC UK
Bank PLC. The facility is secured through fixed and floating charges over
assets belonging to material Group entities: accesso Technology Group plc,
Lo-Q Inc, accesso, LLC, Siriusware, Inc, VisionOne, Inc, Blazer and
Flip-flips, Inc and Ingresso Group Limited. The Group also has a general
undertaking to ensure that entities acting as guarantors to the HSBC facility
aggregate to at least 85% of the Group's Cash EBITDA. Post year end the Group
obtained a waiver from this requirement as a result of the existing guarantors
falling below the 85% threshold, due to greater than anticipated growth in an
acquired entity, accesso Italy s.r.l, and the accession of additional entities
not taking place within the required timeframe. This waiver is conditional on
the accession of two additional entities, Lo-Q Service Canada Limited and Lo-Q
Limited, by 30 April 2024 to ensure the general undertaking continues to be
met. The Group does not foresee any issues with this accession and this does
not impact the Directors' going concern assessment.
As at 31 December 2023, the Group had drawn $21.3m ($20.4m net of finance
costs) which was used to partially fund the three acquisitions made by the
Group.
This HSBC facility replaces the Group's undrawn £18.0m arrangement with
Investec from 19 March 2021, which was due to expire in March 2024. The
£18.0m Investec facility has been cancelled and associated security held has
been released.
14. Called up share capital
2023 2022
Ordinary shares of 1p each Number $000 Number $000
Opening balance 41,394,647 597 41,267,376 596
Issued in relation to exercised share options 718,976 9 127,271 1
Re-purchase of shares for cancellation (299,272) (4) - -
Contingent consideration settled in shares 29,409 1 - -
Closing balance 41,843,760 603 41,394,647 597
During 2023, 718,976 shares (2022: 121,271 shares), with a nominal value
$9,145 (2022: $1,549), were allotted following the exercise of share options.
The number of shares held by the accesso Technology Group plc Employee Benefit
Trust as at 31 December 2023 was 1,136,942 shares (2022: 761,971). 374,971
shares (2022: 761,971) were purchased by the Employee Benefit Trust during the
year.
During the year, the Board approved a share repurchase programme of up to
£4.0m. As at the year end, the Company had repurchased and cancelled a total
of 299,272 shares for a total of $2.2m (GBP £1.8m). The programme was
concluded on 29 February 2024 with a total repurchase and cancellation of
706,984 shares for a total consideration of $5.0m (GBP £4.0m).
In 2023, 29,409 shares (2022: nil) were issued in relation to the settlement
of contingent consideration.
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 2023.
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