Access Intelligence - Interim Results
05/07/2022 07:00
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RNS Number : 2808R Access Intelligence PLC 05 July 2022
ACCESS INTELLIGENCE PLC
("Access Intelligence", the "Company" or the "Group")
INTERIM RESULTS
Access Intelligence Plc, (AIM: ACC) the technology innovator delivering
Software-as-a-Service ("SaaS") solutions for the global marketing and
communications industries, is pleased to announce its unaudited half year
results for the six months ended 31 May 2022.
Highlights:
· The Group's first half revenue increased by approximately 198% to
£32.7 million (H1 2021: £11.0 million). Excluding the revenue delivered by
Isentia which was acquired in September 2021, revenue increased organically by
16.8% to £12.8 million.
· Annual Recurring Revenue(1) ("ARR") increased by £0.7 million to
£59.6 million (H1 2021: £24.7 million).
· The Group delivered Adjusted EBITDA(2) in the period of £0.3
million (H1 2021: loss of £0.14 million).
· At 31 May 2022, the cash balance was £9.3 million (H1 2021: £8.8
million and FY 2021: £13.5 million).
· The Board remains very encouraged by the progress made in the EMEA and
North America markets which have demonstrated continued growth. ARR in EMEA
and North America at the period end was £28.1 million, showing growth of
£1.2 million during the period.
· The integration of Isentia continues to progress well. The Group
launched Pulsar into the Australia and New Zealand ("ANZ") market in the
period and the Board is pleased by the customer engagement with the expanded
global product offering.
Christopher Satterthwaite, non-executive Chairman, commented:
"Access Intelligence has continued to make good progress during the first half
of 2022. The core business has delivered continued growth in the EMEA and
North America region, while the recent acquisition of Isentia has created
significant opportunity for the Group in APAC. These results validate the
Group's strategy to enhance its product framework and global footprint to
unlock land and expand opportunities.
The Group won a substantial number of blue-chip clients in the period, across
every region, including significant win backs in APAC. The launch of Pulsar in
Australia and New Zealand has been well received, leading to a healthy
pipeline of both cross sell and new business opportunities. The APAC business
remains a key focus for the second half; the Group is optimising its market
position by streamlining operations and continuing to realise the cost
synergies identified at the time of the acquisition.
As marketing and communications continue to converge, the Group has continued
to accelerate development of its products to meet both the current and future
needs of these disciplines. In 2022, this has been supported by exciting new
partnerships with NewsGuard and Hootsuite.
Overall, the Board is pleased with the progress being made by the Group and
remains positive about the outlook."
1. ARR is the annual recurring revenue generated from deployed contracts. The
Group has decided to use ARR as its new KPI and is broadly equivalent to the
previously disclosed metric of Annual Contract Value ("ACV").
2. Adjusted EBITDA is earnings before interest, tax, depreciation and
amortisation and adjusted for share based payments, share of losses of an
associate and non-recurring expenses primarily relating to acquisition costs
in respect of the proposed Isentia transaction in the current and prior
periods, in addition to the acquisition and integration of Pulsar in the prior
period.
For further information:
Access Intelligence
plc
020 3426 4024
Joanna Arnold (CEO) / Mark Fautley
(CFO)
finnCap Limited (Nominated Adviser and Broker)
020 7220 0500
Corporate Finance:
Marc Milmo / Kate Bannatyne / Fergus
Sullivan
Corporate Broking:
Alice Lane / Sunila de Silva
Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of
this announcement, this information is now considered to be in the public
domain.
Chairman's statement
I am pleased to announce our unaudited interim results for the six months
ended 31 May 2022.
Access Intelligence continued its advancement in the first half of 2022,
delivering sustained organic growth in the core business alongside its
progress in the integration of Isentia and the strategy to realise the cross
sell opportunity in APAC. The results support the Group's acquisition
strategy, which has been developed to serve the converging needs of the global
marketing and communications industries.
Continued growth
The Group's core business in the EMEA and North America markets continue to
demonstrate sustained growth, with H1 ARR reaching £28.1m, showing growth of
£1.2m. New client wins saw international blue chip businesses onboarded in
the period, including Allianz, E.ON, John Lewis, Hasbro, HS2, KPMG, P&G,
Reddit, The Premier League, TP ICAP and Trust Pilot.
These were added to in the APAC region by new clients and client win backs
including ABC, Estee Lauder, H&M, Huawei, Netflix, Nestle, Ogilvy, SAS
Group, StudioCanal and Tiffany & Co. ARR in the region was down £0.5m to
£31.5m, although the rate of decline was significantly improved in comparison
to pre-acquisition and is largely attributable to the socio-economic
challenges experienced locally in South-East Asia. This near term performance
does not detract from the overall opportunity for the Group to expand in APAC
which is fuelled by the proliferation of audiences and social media users in
the region.
While some world economies are beginning to emerge from the challenges created
by the pandemic, the cost-of-living crisis, war in Ukraine and shortages in
raw materials are presenting new challenges to enterprises against the
backdrop of existing issues such as the spread of misinformation and the
propagation of content through online channels. This requires organisations to
be more strategic in their approach and ensure their marketing communications
are efficient and effective in reaching the right audiences and stakeholders
at the right time.
All of the Group's buyer types have this need, which is only increasing under
the pressure of the current climate. That is why the Group is focussed on
ensuring it continues to enhance its suite of products and is currently
developing a next generation platform, which will provide a greater
understanding of audience impact, underpinned by media, social, consumer and
political intelligence.
The Group has also focussed on expanding its offering and route to market
through integrations into its technology and channel partners being a
strategic focus for the Board. New partnerships in H1 are already contributing
to this future focus including the integration of NewsGuard and the referral
partnership with Hootsuite.
NewsGuard rates the trustworthiness of news sources and the integration will
detect early signals of misinformation, measure the impact of those narratives
on public opinion and help PR and marketing professionals respond quickly to
protect their brands' reputations. NewsGuard's journalistically trained
analysts have rated all the news and information sources that account for 95%
of engagement online, applying nine apolitical criteria of journalistic
practice to determine which sources are generally reliable and which ones
publish misinformation and hoaxes. These ratings are available directly in the
Group's platform and clients can easily segment content and sources by their
trust scores.
The partnership with Hootsuite strengthens the Group's overall offering
through referrals and collaborations with one of the world's most successful
social media management platforms. The mutually beneficial relationship will
support existing client retention and growth with new opportunities,
particularly in the North American market.
Acquisition, integration and expansion
A key pillar in the Group's strategy is targeted acquisitions that provide
technological advancement, territory expansion and synergy with our existing
portfolio. The acquisition of Isentia brought the Group all three, expanding
the Group from circa 200 employees to over 1,000 and increasing the client
base from 3,500 to over 6,000.
Isentia also immediately benefitted as the Group was able to provide it with
investment in marketing and technology, including the launch of Pulsar into
ANZ - which has made measurable improvements to its media monitoring systems
and sales pipeline.
Whilst competition continues in the ANZ market and macroeconomic conditions
remain challenging, particularly in South East Asia, the Group has made a
number of positive developments in APAC. The relocation of an EMEA sales
director to head up a new Pulsar sales team in ANZ has enabled us to leverage
Isentia's exceptional customer base through cross-sell and led to early new
business wins and an exciting pipeline for H2. We are increasingly positive
about the social media and audience intelligence opportunities in APAC where
the Group's offering is clearly differentiated from those of its competitors.
Regional teams have been collaborating and sharing best practice, a prime
example of which is the alignment of the Group's insights service that has
rolled out at both a global and local level.
The Group has also recognised cost synergies in line with its pre-acquisition
timeline expectations, streamlining operations and improving systems and
processes. This includes the ongoing integration and migration of CRM and
accounting systems, as well as the merger of the marketing and insights
departments under one global umbrella headed up by our newly appointed CMIO.
The Group's buyer types
The Group targets three distinct buyer types, and focuses development to meet
their increasingly converging needs:
· Marketing - Our social listening and audience intelligence platform
finds the story in the data for marketers around the world. Patterns and
trends in behaviours and conversations are displayed in real-time from both
social and news sources, so marketers can understand what is impacting their
reputation and their customers, how trends and topics are evolving, and where
there are opportunities to innovate.
· PR & Communications - Recognising where PR can and should feed
into the news cycle is vital, which is why practitioners depend on the Group's
news, political and social media monitoring to track coverage and show how
trends develop across different media. Real-time analysis highlights
opportunities for proactive communications, measures share of voice against
key competitors and tracks the impact of clients' PR activity.
· Insights - Our award-winning Insights teams combine deep expertise in
our market-leading tools with human intelligence and industry expertise. They
work in partnership with our clients to drive audience understanding and
improve every stage of their marketing and communications strategy, from
planning through execution to results.
Results for the half year
The primary key performance indicator monitored by the Board is the growth in
ARR year-on-year. This reflects the annual value of new business won, together
with upsell into the Company's existing customer base as it delivers against
its land and expand strategy, less churn. It is an important metric for the
Group as it is a leading indicator of future revenue.
During the period, the Group's ARR grew by £0.7 million to £59.6 million (H1
2021: growth of £2.7 million to £24.7 million). ARR in EMEA and North
America increased by £1.2m to £28.1m, whilst ARR in APAC reduced by £0.5
million to £31.5 million. This remains a marked improvement to the
performance from the region pre-acquisition where the rate of decline was
significantly higher and reflects the Company's focus on winning long-term
recurring revenue contracts.
Revenue for the period grew by 198% to £32.7 million (H1 2021: £11.0
million). Excluding the revenue delivered by Isentia which was acquired in
September 2021, revenue increased organically by 16.8% to £12.8 million. The
organic year-on-year increase was primarily driven by ARR growth between June
2021 and May 2022. Recurring revenue comprised 93% of total revenue (H1 2021:
94%).
Gross profit increased by over 200% year-on-year to £24.5 million (H1 2021:
£8.1 million) with the Group delivering a gross margin of 75% (H1 2021: 74%).
Gross margin improved compared to the prior period as the Group is able to
leverage fixed cost data feeds more effectively with an expanded revenue base.
Adjusted earnings before interest, tax, depreciation and amortisation
("EBITDA") were £0.3 million, compared to a loss of £0.1 million in H1 2021.
Adjusted EBITDA excludes certain non-recurring items totalling £1.4 million
for the period (H1 2021: £1.3 million), in addition to the Group's share of
loss of an associate of £0.1 million (H1 2021: £0.1 million) and a
share-based payments charge of £0.6 million (H1 2021: £0.1 million).
Non-recurring items in the period included transition and migration costs in
respect of acquisitions of £0.9 million (H1 2021: £Nil), legal costs in
respect of the Australian copyright tribunal of £0.4 million (H1 2021:
£Nil), and acquisition related legal and due diligence costs of £Nil (H1
2021: £1.3 million). Reported EBITDA loss was £1.7 million (H1 2021: loss
of £1.6 million).
The Group has continued to increase investment in its software platforms with
identifiable new product development activity being capitalised. The Group
capitalised development costs of £3.5 million for the period (H1 2021: £1.2
million), with a further £1.4 million (H1 2021: £0.7 million) of product,
research and development costs being expensed through profit and loss.
The Group's operating loss was £7.4 million (H1 2021: loss £3.3 million).
The Group incurred £5.7 million of depreciation and amortisation charges (H1
2021: £1.7 million).
The basic loss per share was 1.50p (H1 2021: loss 4.07p).
The Group held cash at the end of the period of £9.3 million (H1 2021: £8.8
million).
Outlook
During 2022, Access Intelligence has focused its activities in three key
areas: advancing its market leading products; the continued integration of
Isentia; and evaluation of current business operations to ensure that the
Group can fully leverage its market positioning.
The ongoing investment in products and operations will provide customers
across the Group's markets with an enhanced user experience and an expanded
global content offering. These improvements will support the continued scaling
of the business through increased sales and improved customer retention.
The integration of Isentia continues to progress well and the Group has
launched Pulsar into Australia and New Zealand. Customer engagement with the
expanded global product offering has been pleasing and Pulsar has created a
clear differentiation from competitors' products in the region.
The Group has also undertaken a comprehensive analysis of the current market
dynamics across its regional presence to ensure that it is optimally
structured to capture the undoubted global market opportunity. The Board
remains highly confident about realising the cost synergies identified at the
time of the acquisition.
Overall, the Board is pleased with the progress being made with the Company
continuing to trade in line with expectations and remains positive about the
outlook for the Group.
Christopher Satterthwaite
Non-executive Chairman
Access Intelligence Plc
Consolidated Statement of Comprehensive Income
for the six months ended 31 May 2022
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31-May-22 31-May-21 30-Nov-21
£'000 £'000 £'000
Revenue 32,731 11,000 33,296
Cost of sales (8,280) (2,875) (8,243)
Gross profit 24,451 8,125 25,053
Recurring administrative expenses (24,131) (8,260) (25,581)
Adjusted EBITDA 320 (135) (528)
Non-recurring administrative expenses (1,369) (1,332) (3,855)
Share of loss of associate (125) (71) (228)
Share-based payments (564) (72) (383)
EBITDA (1,738) (1,610) (4,994)
Depreciation of tangible fixed assets (324) (110) (336)
Depreciation of right-of-use assets (1,168) (325) (1,006)
Amortisation of intangible assets - internally generated (932) (672) (1,520)
Amortisation of intangible assets - acquisition related (3,263) (546) (1,371)
Operating loss (7,425) (3,263) (9,227)
Financial income 5 10 10
Financial expense (151) (169) (340)
Loss before tax (7,571) (3,422) (9,557)
Taxation credit 572 50 842
Loss for the period (6,999) (3,372) (8,715)
Other comprehensive income
Items that will or may be reclassified to profit or loss 5,085 (13) 309
Total comprehensive loss for the period attributable to the owners of parent
company
(1,914) (3,385) (8,406)
Earnings per share:
Basic loss per share (1.50)p (4.07)p (8.73)p
Diluted loss per share (1.50)p (4.07)p (8.73)p
Access Intelligence Plc
Consolidated Statement of Financial Position
at 31 May 2022
Unaudited Unaudited Audited
As at As at As at
31-May-22 31-May-21 30-Nov-21
£'000 £'000 £'000
Non-current assets
Intangible assets 67,358 15,786 63,234
Investment in associate 591 873 716
Right-of-use assets 2,661 2,005 3,538
Property, plant and equipment 975 411 1,080
Deferred tax assets 4,325 18 4,144
Total non-current assets 75,910 19,093 72,712
Current assets
Trade and other receivables 14,772 7,786 13,695
Current tax receivables 783 548 1,346
Cash and cash equivalents 9,291 8,773 13,456
Total current assets 24,846 17,107 28,497
TOTAL ASSETS 100,756 36,200 101,209
Current liabilities
Trade and other payables 7,649 3,516 7,735
Accruals 7,604 2,138 6,888
Contract liabilities 13,824 9,928 12,144
Provisions 632 - 537
Lease liabilities 1,831 796 2,184
Interest bearing loans and borrowings - 667 -
Total current liabilities 31,540 17,045 29,488
Non-current liabilities
Provisions 382 213 372
Lease liabilities 1,644 2,003 2,187
Interest bearing loans and borrowings - 1,064 -
Deferred tax liabilities 7,578 474 8,153
Total non-current liabilities 9,604 3,754 10,712
TOTAL LIABILITIES 41,144 20,799 40,200
NET ASSETS 59,612 15,401 61,009
Equity
Share capital 6,528 4,382 6,528
Treasury shares (148) (148) (148)
Share premium account 74,372 26,247 74,419
Capital redemption reserve 395 395 395
Share option reserve 1,465 590 901
Foreign exchange reserve 5,394 (13) 309
Other reserve 502 502 502
Retained earnings (28,896) (16,554) (21,897)
TOTAL EQUITY ATTRIBUTABLE TO EQUITY SHAREHOLDERS
59,612 15,401 61,009
Access Intelligence Plc
Consolidated Statement of Changes in Equity
for the six months ended 31 May 2022
Share Treasury Share Capital Share Foreign Other Retained Total
capital shares premium redemption option exchange reserve earnings
account reserve reserve reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 December 2020 3,757 (148) 17,242 395 518 - 502 (13,182) 9,084
Loss for the period - - - - - - - (3,372) (3,372)
Other comprehensive loss for the period - - - - - (13) - - (13)
Issue of share capital 625 - 9,005 - - - - - 9,630
Share-based payments - - - - 72 - - - 72
At 31 May 2021 4,382 (148) 26,247 395 590 (13) 502 (16,554) 15,401
Loss for the period - - - - - - - (5,343) (5,343)
Other comprehensive income for the period - - - - - 322 - - 322
Issue of share capital 2,146 - 48,172 - - - - - 50,318
Share-based payments - - - - 311 - - - 311
At 30 November 2021 6,528 (148) 74,419 395 901 309 502 (21,897) 61,009
Loss for the period - - - - - - - (6,999) (6,999)
Other comprehensive income for the period - - - - - 5,085 - - 5,085
Expenses related to issue of share capital - - (47) - - - - - (47)
Share-based payments - - - - 564 - - - 564
At 31 May 2022 6,528 (148) 74,372 395 1,465 5,394 502 (28,896) 59,612
Access Intelligence Plc
Consolidated Statement of Cash Flow
for the six months ended 31 May 2022
Unaudited Unaudited Audited
6 months ended 6 months ended Year
ended
31-May-22 31-May-21 30-Nov-21
£'000 £'000 £'000
Loss for the year attributable to shareholders (6,999) (3,372) (8,715)
Adjustments for:
Taxation (572) (50) (842)
Financial expense 151 169 340
Financial income (5) (10) (10)
Depreciation and amortisation 5,687 1,653 4,233
Share based payments 564 72 383
Share of loss of associate 125 71 228
Operating cash outflow before working capital changes (1,049) (1,467) (4,383)
Increase in trade and other receivables (1,079) (1,823) (938)
Increase in trade and other payables 835 32 1,426
Increase in contract liabilities 1,680 1,806 1,830
Increase/(decrease) in provisions 61 - (9)
Net cash inflow/(outflow) from operations 448 (1,452) (2,074)
Tax received/(paid) 166 - (305)
Net cash inflow/(outflow) from operating activities 614 (1,452) (2,379)
Investing
Interest received 5 10 10
Acquisition of property, plant and equipment (211) (26) (106)
Acquisition of software licences and other intangible assets - (19) (83)
Cost of software development (3,478) (1,248) (3,428)
Investment in associate - (887) (887)
Acquisition of Isentia - - (39,744)
Net cash outflow from investing activities (3,684) (2,170) (44,238)
Financing
Interest paid (144) (169) (350)
Drawdown of loans - 2,000 2,000
Repayment of loans - (269) (2,000)
Lease liabilities paid (1,198) (200) (952)
Issue of shares - 10,000 61,465
Cost associated with share issue (47) (370) (1,517)
Net cash (outflow)/inflow from financing activities (1,389) 10,992 58,646
Net (decrease)/increase in cash (4,459) 7,370 12,029
Opening cash and cash equivalents 13,456 1,403 1,403
Exchange gains on cash and cash equivalents 294 - 24
Closing cash and cash equivalents 9,291 8,773 13,456
Notes
1. Unaudited notes
Basis of preparation and accounting policies
The financial information for the six months to 31 May 2022 is unaudited and
was approved by the Board of Directors on Monday 4(th) July 2022.
The interim financial statements do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements for the year ended 30
November 2021.
The interim financial information for the six months ended 31 May 2022,
including comparative financial information has been prepared on the basis of
the accounting policies set out in the last annual report and accounts.
The preparation of the interim financial statements requires management to
make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income
and expense. Actual results may subsequently differ from those estimates.
In preparing the interim financial statements, the significant judgements made
by management in applying the Group's accounting policies and key sources of
estimation uncertainty were the same, in all material respects, as those
applied to the consolidated financial statements for the year ended 30
November 2021.
The Group has elected to present comprehensive income in one statement.
Going concern assumption
The Group meets its day to day working capital requirements through its cash
balance but also maintains relationships with a number of financial
institutions and believes that, should it be required, it would be able to put
in place an appropriate working capital facility. It did not have a bank loan
or overdraft at 31 May 2022 and had a net cash balance of £9,291,000.
Consequently, after making enquires, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they continue to adopt
the going concern basis of accounting in preparing the interim financial
statements.
Information extracted from the Group's 2021 Annual Report
The financial figures for the year ended 30 November 2021, as set out in this
report, do not constitute statutory accounts but are derived from the
statutory accounts for that financial year.
The statutory accounts for the year ended 30 November 2021 were prepared under
IFRS and have been delivered to the Registrar of Companies. The auditors
reported on those accounts. Their report was unqualified, did not draw
attention to any matters by way of emphasis and did not include a statement
under Section 498(2) or 498(3) of the Companies Act 2006.
2. Revenue
The Group's revenue is primarily derived from the rendering of services. The
Group's revenue was generated from the following territories:
Unaudited Unaudited Audited
6 months ended 6 months ended Year
ended
31-May-22 31-May-21 30-Nov-21
£'000 £'000 £'000
United Kingdom 10,396 9,160 19,073
North America 1,480 493 1,987
Europe 611 975 1,201
Australia and New Zealand 15,852 91 8,145
Asia 4,284 42 2,374
Rest of the world 108 239 516
32,731 11,000 33,296
3. Earnings per share
The calculation of earnings per share is based upon the loss after tax for the
respective period. The weighted average number of ordinary shares used in the
calculation of basic earnings per share is based upon the number of ordinary
shares in issue in each respective period.
The impact of share options granted under the company's share option scheme
are anti-dilutive due to the Group being in a loss-making position, so the
weighted average number of ordinary shares used in the calculation of diluted
earnings per share is the same as for basic earnings per share.
This has been computed as follows:
6 months ended 6 months ended 6 months ended 6 months ended Year Year
ended ended
31-May-22 31-May-22 31-May-21 31-May-21 30-Nov-21 30-Nov-21
Basic Diluted Basic Diluted Basic Diluted
Loss after tax (£'000) (1,914) (1,914) (3,385) (3,385) (8,406) (8,406)
Number of shares ('000)* 127,597 127,597 83,190 83,190 96,237 96,237
Loss per share (pence) (1.50) (1.50) (4.07) (4.07) (8.73) (8.73)
4. Events after the reporting date
On 14 June 2022, the Group announced that it had received notice of exercise
("Exercise") from an employee in relation to options over 53,351 ordinary
shares of 5 pence each in the Company and had transferred 53,351 shares
previously held in treasury to satisfy the Exercise. As a result, the
Company's issued share capital consists of 130,524,386 Ordinary Shares,
2,873,964 of which remain held in treasury. The total number of Ordinary
Shares in the Company with voting rights is 127,650,422.
5. Availability of interim results
The interim results will not be sent to shareholders but will be available at
the Company's registered office at The Johnson Building, 79 Hatton Garden,
London, EC1N 8AW and on the Company's website: www.accessintelligence.com
(http://www.accessintelligence.com) .
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