ACSO Accesso Technology Group Plc

26 September 2024

accesso® Technology Group plc

 

("accesso" or the "Group")

 

INTERIM RESULTS

for the six-month period ended 30 June 2024

 

accesso Technology Group plc (AIM: ACSO), the premier technology solutions provider to leisure, entertainment, and cultural markets, today announces interim results for the six months to 30 June 2024 ('H1 2024').

Commenting on the results, Steve Brown, Chief Executive Officer of accesso, said:

"As we set out in our most recent trading update, our first half results show our organic business performed broadly in line with our expectations in the first half, while our overall performance was held back by a delay to an important project for Accesso Horizon^SM. As we recognise revenue on a milestone basis, these delays resulted in our Group results coming in below where we had originally hoped. This project remains a major validation of our acquisition rationale, and we see no change to the overall contract value.

As we started the second half, the attractions sector widely reported lower guest volumes than were anticipated. Our current guidance reflects that this softness continued through the peak trading periods of July and August and will likely run through the remainder of the year. We anticipate this will normalise as operators continue to adjust pricing and promotional strategies to align with current consumer expectations.

We are always confident that our business is diversified enough to withstand transactional volume fluctuations over the medium and long term, but with the effects in the current year exacerbated by the delay we experienced in accesso Horizon, we felt it prudent to adjust our full year outlook.

Subsequently we have taken measures to limit cost expansion and preserve margin through the second half. With the key trading periods of July and August in hand, we are tracking towards our revised full year outlook.

While reporting these results, we must also take the opportunity to remember Fern MacDonald, our Group CFO, who recently passed away. As a professional she was a force for good in our company, and as a person she was a dearly loved friend and colleague. She is sorely missed by all at Accesso, and we are all thinking of her family at this time". 

				Six months ended 30 June 2024		Six months ended 30 June 2023	% change
				Unaudited ($000)		Unaudited ($000)
Group Revenue				69,194		65,783	5.2%
Ticketing and distribution				51,833		43,761	18.4%
Guest Experience				13,206		16,035	(17.6%)
Professional Services				4,155		5,987	(30.6%)
Group Revenue - constant currency			4	68,652		65,783	4.4%
Gross Profit				52,724		48,326	9.1%
Gross Margin %				76.2%		73.5%	3.7%
Cash EBITDA			1	6,482		6,481	0.1%
Statutory profit / (loss) before tax				295		(863)	134.2%
Net cash			2	18,292		9,182	99.2%
Adjusted basic earnings per share (cents)			3	8.65		7.50	15.3%
Basic earnings / (loss) per share (cents)				0.53		(1.51)	135.1%
Footnotes:
(1)	Cash EBITDA: 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 development costs (see reconciliation in Financial review).
(2)	Net cash is calculated as cash and cash equivalents less borrowings. Lease liabilities are excluded from borrowings on the basis they do not represent a cash drawing.
(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 6)
(4)	Revenue metrics for the period ended 30 June 2024 have been prepared on a constant currency basis using rates from the period ended 30 June 2023 to assist with assessing the underlying performance of the revenue streams. Average monthly rates for H1 2023 were used to translate the monthly H1 2024 results into a constant currency using the range of currencies as set out below:
	a.	GBP sterling - $1.21 - $1.26
	b.	Euro - $1.07 - $1.10
	c.	Canadian dollar - $0.73- $0.75
	d.	Australian dollar - $0.66-$0.69
	e.	Mexican pesos - $0.05 - $0.06
	f.	Brazilian real - $0.19 - $0.21
	g.	UAE Dirham - $0.27 - $0.27
	h.	Singapore dollar - $0.74 - $0.75

First half highlights

·    Organic business trading broadly in line with expectations in first half: Group revenue of $69.2m reflects solid Guest Experience performance despite the absence of low-quality pass-through revenue for providing temporary seasonal staffing present in H1 2023. Despite overall Ticketing and Distribution revenue coming in lower than expected due to the delays in accesso Horizon, eCommerce revenue still grew in the strong double digits, and we saw improved revenue from Ingresso as optimisation efforts have begun to yield results.

 

·     New business results indicate demand environment is strong: The Group signed 21 new venues during the period (H1 2023: 16), with particular strength in the growing Ski (5 venues) and Live Entertainment (5 venues) verticals. The Group's new restaurant and retail proposition accesso Freedom^SM won 8 new customers during the period and took 5 customers live. Strong demand also led to the introduction of accesso ShoWare^SM into the UK near the end of the period, with benefit expected in the near to mid-term as we establish market awareness and convert sales opportunities.  

 

·     accesso Horizon on track, but project delays impact growth: This 2023 acquisition provides a significant broadening of our international presence as we focus on the wider range of global growth opportunities. The shift in the installation timeline for a large project in the Middle East impacted first half results and full year guidance, but project revenue and profit profile remain fully intact.

 

·     Solid start for accesso Paradox^SM: This innovative SaaS solution for the Ski industry, acquired in 2023, has immediately benefited from our prompt action to improve the solution's eCommerce offering. As a result, nearly half a million eCommerce products were sold during the period, up by 14% compared to the same period last year. Efforts to enable the solution to work in tandem with our other products have progressed well alongside necessary feature enhancements to enable significant growth opportunities in the important US Ski market.   

 

·     Full year outlook and guidance: As announced on 15 August, the combination of changes to the implementation timeline for an important accesso Horizon project and slightly softer than expected trading have led the Group to adjust its full year outlook as follows: it now expects a full year revenue outturn of approximately $150m - $153m, and a Cash EBITDA margin of 13% - 14%.

 

·    Share buyback programme now underway: On 23^rd August 2024 the Group announced a share buyback programme with the intention of returning up to a maximum aggregate amount of £4m to the Company's shareholders. This programme is being funded from existing cash resources.

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

 

Upon the publication of this announcement, this inside information is now considered to be in the public domain. The Company will be hosting a webcast presentation for analysts at 1pm. Analysts and institutional investors are also able to request a copy of the presentation and audio webcast conference details by contacting accesso@dgagroup.com. A copy of the presentation made to analysts will be available for download from the Group's website, shortly after the conclusion of the meeting.

 

For further information, please contact:

 

accesso Technology Group plc                                                                                         Steve Brown, Chief Executive Officer Matthew Boyle, Chief Financial Officer	+44 (0)118 934 7400
Deutsche Numis (Nominated Adviser and Sole Broker)                                     Simon Willis, Joshua Hughes, Iqra Amin	+44 (0)20 7260 1000
DGA Group (Financial Public Relations) Adam Davidson, Leah Dudley, Corbin Ellington	+44 (0)20 7550 9225

 

About accesso Technology Group plc

 

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. Follow accesso on X, LinkedIn and Facebook.

 

***

Chief Executive's Review

 

Sticking to the task: business evolution on track

 

During the first half of 2024 we made important progress on key strategic priorities aimed to drive growth and profitability. Our fundamentals - a strong transactional revenue base, a focus on operational excellence that drives Cash EBITDA, and a strong balance sheet - underpins our approach. At our core, we continued to serve our customers with passion, commitment and positive impact. And in our technology, we brought new innovation to market that continued to extend our leadership.

 

At the same time, we continued to integrate the acquisitions made in 2023 that will form a critical part of tomorrow's accesso. The market reception for these acquisitions - particularly accesso Horizon, our market leading ticketing and visitor management system, and accesso Paradox, our new solution for the important ski market - has reinforced our conviction in the future prospects for the Group.

 

In accesso Horizon, we were particularly pleased to announce our first post-acquisition marquee win for the product with 21 venues being constructed by Saudi Entertainment Ventures, a wholly owned subsidiary of the Saudi Arabia Public Investment Fund (PIF). This win in a greenfield market shows why we remain so convinced of accesso Horizon's place in our portfolio of leading solutions.

 

Returning to the current year, our start to the second half has been informed by slightly lower-than-expected trading volumes in the early and mid-summer in various markets across the globe. Although still exhibiting growth, the uptick has been lower than we had anticipated. In totality, transactional revenue trends in H1 were broadly in line with our expectations, but slightly less robust than we had hoped. When July trading results were lower than our expectations alongside increased clarity in regard to the timeline for a key accesso Horizon project, it became evident we should adjust our full year outlook to reflect a prudent assumption that this softness would continue through the rest of calendar 2024.

 

Despite these headwinds, our conviction in our long-term business prospects remains unchanged for three main reasons. First, our business is increasingly diversified. Second, our customer relationships are incredibly strong, and our product offering stands heads above the competition in both the quality of the solutions and our reputation for high quality delivery. Third, our new business activity shows increasing demand for our products and services. Of course, we are disappointed not to have continued our accelerating growth in this period and to have lowered our expectations for the full year. However, we remain 100% committed to our growth plan, and equally confident in the long-term resilience of our business.

 

Financial performance

 

During the first half the Group delivered revenue of $69.2m at growth of 5.2% year-on-year. Excluding the reimbursement revenue received for providing temporary seasonal staff to a major customer, which ended in H2 2023, revenue growth was 9.9%. While lower than our expectations, business activity remained at a solid level, which indicates ongoing robust demand for our technology.

 

With staffing levels generally in line with our go-forward expectations, operational efficiency remains a key priority. Excluding the impact of acquisitions, our underlying cost base increased 4.3% compared to the prior year period.

 

Cash EBITDA of $6.5m (H1 2023: $6.5m) was affected by lower-than-expected revenue performance. Total Gross Profit increased slightly to $52.7m (H1 2023: $48.3m). After a strategically significant year in 2023 with three important acquisitions we are broadly comfortable with the shape of our business going forward. Cost control and profit optimisation remain critical objectives for the Company, and we expect profit growth to resume in 2025. Our strong balance sheet and continued cash generation means we are well positioned for future growth and have demonstrated success in taking advantage of strategic opportunities as they arise.

 

Operating review

 

Organic first half trading broadly in line with expectations

 

Excluding the impact of customer-side timeline shifts on an important accesso Horizon project, our first half revenue result of $69.2m was broadly in line with our plan, driven primarily by strong double-digit growth in our Ticketing and Distribution segment, which was 18.4% ahead of the prior period including the impact of acquisitions. On an organic basis, also excluding the impact of the low-quality pass-through revenue, our Group revenues were 3.4% ahead of the prior period. This growth was driven by our distribution business, led by Ingresso, showing new signs of growth following changes to the operational structure, delivering revenues 48.4% ahead of H1 2023. With emerging softness in venue attendance, organic ticketing revenue increased less than expected with growth of 1.4% ahead of the prior year period.

 

Our Guest Experience revenues were impacted by the planned structural change in seasonal staffing provided to a major customer ($2.8m H1 2023). The Group's shift away from this low-quality pass-through revenue was completed in H2 2023. Excluding this impact, Guest Experience revenues were in line with the prior period. Again, this was despite attendance headwinds particularly at the start of the peak trading period in June.

 

To better present our revenues going forward we have removed Professional Services from the Guest Experience segment in both the current and prior period. This Professional Services revenue will be shown as a separate standalone segment from this period onwards. These revenues are for services that stand separate from our transactional and license revenues and fluctuate depending on customer project life cycles.

 

Ongoing new business success and increasing geographical diversification

 

During the first half the Group continued to see solid new business momentum demonstrating the enduring appeal of its products to customers. At the end of June, we had signed 21 new venues in the period, up from 16 in the same period last year, with growth continuing to come from strategically important sectors including Ski and Live Entertainment. It was also pleasing to see accesso Freedom, our new restaurant and retail platform, continuing to resonate with customers and deliver 8 wins. Even before the financial benefits start to accrue, these successes act as important reference points in the market and act as strong proof of this new, highly complementary product offering.

From a geographic perspective, we also continued to broaden our footprint and increase the diversification of our revenue driven by recent acquisitions. For example, we generated $1.2m revenue from the Middle East (H1 2023: $nil) and revenues from the Asia Pacific region increased by 25.1% compared to H1 2023. Capturing new opportunities in the broader global market is a key priority and increasing our market presence in these regions sets the stage for expansion from both the newly acquired solutions and our broader range of products.

Acquisition strategy validated by market acceptance for key new products

 

During 2023 accesso made three strategic acquisitions, two of which have given us new and important products to add to our portfolio. The acquisition of VGS, now accesso Horizon, and Paradocs Mountain Software, now accesso Paradox, are both receiving positive feedback from customers and continuing to win business that will support improved financial outcomes for the group going forward.

 

In the case of accesso Horizon, in March we were able to announce a major win in the strategically important Middle East region with Saudi Entertainment Ventures (SEVEN). This venture selected our solution as the key provider to a project that will involve 21 new cutting-edge entertainment destinations across 14 cities, featuring over 150 attractions. These will include diverse dining outlets, and local and international retail outlets that complement the overall entertainment ecosystem that SEVEN is spearheading. This unique deployment showcases the full range of accesso Horizon's capability to other likely buyers in this high-investment region, and demonstrates the level of differentiation this product offers in the marketplace.

For accesso Paradox we remain on track with our initial growth plan with 7 resorts signing since acquisition. Difficult North American weather conditions at the end of 2023 and during early H1 2024 slowed some operators from making commitments to a new solution in the immediate months that followed. Alongside selling to new venues, the solution provides an important pathway for ski customers using our on-prem product, accesso Siriusware^SM, who desire a transition to a cloud-based SaaS solution. In terms of cross-sell opportunity, we are seeing notable market interest in the combination of accesso Paradox and accesso Freedom as a comprehensive package for ski venue operators.

 

Post period end summer trading

 

As outlined in our Trading Update in August, consumer trading volume across our key end markets was below our expectations in the initial weeks after the period ended. Our revised full year revenue guidance assumes these lower volumes persist through the remaining peak months of the year.

 

Product and technology

 

The quality and interoperability of accesso's technology continues to set the business apart against competition in the market. The Group also remains committed to furthering its market leading position by continually investing in and advancing its products. For example, during the period the connection between accesso Freedom and accesso Siriusware was completed and now allows customers to seamlessly utilise the two products alongside each other. The fully updated accesso Passport eCommerce offering was finalised and implemented by all major customers prior to the key summer trading period. A new mobile POS solution compatible with accesso Siriusware and accesso Passport customers was completed to enable the untethered sale of tickets, parking and other items. For accesso Paradox, several of the key feature enhancements to bring the solution to the US market were delivered including the integration of accessoPay. With accesso ShoWare, localisation requirements were completed that enabled the launch of the solution in the UK, including functionality for VAT, language and reporting. The integration to Salesforce was also delivered for accesso ShoWare as this has been identified as a key requirement across the target customer base.

 

Further to the items that were completed in the period, efforts on larger scale, mid-term initiatives continued to progress. eCommerce is at the core of our commercial success and our continued focus on innovation is central to maintaining market leadership and achieving our growth objectives. The development of a re-envisioned eCommerce solution for accesso Passport is underway that will improve flexibility to customize for customers, expand analytic capabilities and increase operational efficiency. This new offering is designed with the flexibility to work seamlessly with other core solutions, including accesso Paradox with some early implementations targeted for mid-2025.

 

People and culture

 

The quality of our team remains a key competitive advantage.  Ongoing relationships with our clients are key to their satisfaction and the continuity of internal knowledge leads to higher quality operational and engineering success.  At the end of the period, employee turnover of 4% is trending slightly lower than at the same point in the prior year. Our annual employee engagement survey was completed in May with 95% participation and an overall score placing us again in 75^th percentile of benchmark companies. 

 

We launched our first ever Emerging Leader program, which is an interactive, virtual leadership development program for new or soon to be aspiring leaders. In our continued commitment to DEI, we re-launched our Women's Leadership Development Program, IgniteHer, which aims to empower women and illuminate opportunities for career advancement at accesso and beyond. We also partnered with Technovation, a global tech education nonprofit that inspires girls to be leaders and problem solvers in their communities, to provide volunteers to be virtual judges who give valuable feedback to teams of girls on the mobile apps they build.

 

CFO Transition

 

On 12 August this year, accesso CFO Fern MacDonald tragically passed away following an unflinching battle with cancer. Ms. MacDonald was a model CFO, a trusted advisor, and a friend to many, who will be sorely missed by all at accesso. The thoughts of those at the Group are with Ms. MacDonald's family at this time.

 

Matthew Boyle, who held the position of Group VP Finance at the time of Ms. MacDonald's passing, has assumed the role of CFO. Mr. Boyle is an experienced practitioner who has been with the Group for five years, serving two of those as Ms. MacDonald's deputy. In 2023, he was a key figure in driving the Group's successful completion of three major acquisitions. His expertise in financial reporting, commercial analysis, and business leadership continues to support the Group. Prior to accesso, Mr. Boyle was with BDO UK LLP for 8 years, serving large international groups and AIM listed businesses in both the audit and transaction services functions. Mr. Boyle graduated with First-Class degree in Accounting and Finance from the University of Southampton and is a member of Institute of Chartered Accountants in England and Wales (ICAEW).

 

Outlook

 

The demand for accesso's products, and the strength of the Group's end markets, gives us confidence in the continued success of our business. While there has been some softness in consumer trading over the summer months, accesso has taken prudent measures to limit the near-term and preserve margin through the second half, and the Board is confident in the revised revenue expectations for the full year. The Group's robust financial position and the strength of our business platform will return us to our intended growth path next year.  

Financial Review

Financial overview

In the first half of 2024, the Group delivered revenue of $69.2m, up 5.2% on last year, or 4.4% at constant currency. Excluding the low-quality pass-through revenue received for providing temporary seasonal staff to a major customer, which ended in H2 2023, revenue growth was 9.9%. We delivered strong gross profit growth with our margin up 2.7 percentage points year-on-year at 76.2% (H1 2023: 73.5%). This gross margin increase reflects an ongoing improvement in the quality of our overall revenue stream. Our flat Cash EBITDA performance reflects higher administrative expenses due to the increased size of our overall business, as a result of three acquisitions in the prior year, set against slightly lower than expected revenue growth in the period. With our revenue outturn primarily related to a project delay, we are confident our growth trajectory will resume as planned as we move towards and into 2025. 

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; and

·      Repeatable revenue consists of transactional revenue from Virtual Queuing, Ticketing and eCommerce and is defined as revenue earned as either a fixed amount per sale of an item, such as a ticket sold by a customer or as a percentage of revenue generated by a venue operator. Normally, this revenue is repeatable where a multi-year agreement exists and purchasing patterns by venue guests do not significantly change. Other repeatable revenue is defined as revenue, excluding transactional revenue, that is expected to be earned through of a customer's agreement, without the need for additional sales activity, such as maintenance and support revenue. Non-repeatable revenue is revenue that occurs one-time (e.g. up-front licence fees) or is not repeatable based upon the current agreement (e.g. billable professional services hours) and is unlikely to be repeatable without additional successful sales execution by accesso. Other revenue consists of hardware sales and other revenue that may or may not be repeatable with limited sales activity if customer behaviour remains consistent.

 

The Group considers cash EBITDA, which disregards any benefit to the income statement of capitalised development expenditure, as its principal operating metric.

These APMs should not be viewed in isolation but as supplementary information. As adjusted results include the benefits of the Group's acquisition history but exclude significant costs (such as significant legal or amortisation expenditure), they should not be regarded as a complete picture of the Group's financial performance, which is presented in its total results.

Key Financial Metrics

Group revenue for the first half of 2024 was $69.2m (H1 2023: $65.8m), up 5.2% on H1 2023. While we are happy to have seen growth, the results were behind the ambitious expectations we set ourselves at the outset of the year. As we explained in our trading update in August 2024, a material portion of expected revenue from accesso Horizon in the Middle East has yet to come through due to a shift in the client's project timeline. This has impacted the anticipated growth in the Ticketing and Distribution segment and, when delivered, will be largely comprised of one-time license fees and professional services, with increasing maintenance & support as the project progresses.

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:

	Six months ended 30 June 2024 Unaudited		Six months ended 30 June 2023* Unaudited
	$000		$000			%
Ticketing	41,146		36,560			12.5%
Distribution	10,687		7,201			48.4%
Ticketing and distribution	51,833		43,761			18.4%
Virtual queuing	11,196		10,876			2.9%
Virtual queuing - staffing cost reimbursement	-		2,811			(100.0%)
Other guest experience	2,010		2,348			(14.4%)
Guest experience*	13,206		16,035			(17.6%)
Professional Services*	4,155		5,987			(30.6%)
Total revenue	69,194		65,783			5.2%

*The Guest Experience segment has been restated to exclude Professional Services that are not being provided in conjunction with one of our products. The prior period Guest Experience revenue was $22.6m being the sum of the Guest Experience and Professional Services H1 2023 amounts.

Ticketing and Distribution

Ticketing and Distribution revenue was up 18.4% up on H1 2023, driven by Ticketing up 12.5% and Distribution up 48.4%. This segment includes the benefit of a full period of accesso Horizon and accesso Paradox following their acquisitions made towards the end of H1 2023. Together, these acquisitions contributed $4.1m of the increase in Ticketing revenue. Excluding these acquisitions, Ticketing would have increased by 1.4%.

Distribution revenues increased by 48.4% which reflects the addition of a significant new distribution partner in H2 2023. This partner's revenues for the period H1 2024 contribute the majority of the increase alongside positive increases in existing customers using one of our ticketing solutions integrating further with our distribution platforms to widen their sales channels. We made the strategic decision to move away from the lower margin consumer direct portion of our Distribution business and near the end of the period transitioned that operation to one of our key distributors.

Guest Experience

Within the Guest Experience segment, and as noted in annual results for the year ended 31 December 2023, a change in strategy resulted in the management and provision of seasonal labour being returned to a major customer from July 2023. A further breakdown of the virtual queueing (accesso LoQueue®) revenue within the Guest Experience segment is presented in the table below. H1 2024 included hardware sales of $1.8m of accesso Prism^SM bands to a blue-chip customer. While transactional volumes on queueing are broadly in line with the prior period, some customers have adjusted their service which resulted in transactional revenues being down 7.2%.

	Six months ended 30 June 2024 Unaudited		Six months ended 30 June 2023* Unaudited
	$000		$000			%
Virtual queuing - transactional	9,417		10,150			(7.2%)
Virtual queuing - staffing cost reimbursement	-		2,811			(100.0%)
Virtual queuing - hardware	1,767		657			168.9%
Other guest experience	2,022		2,417			(16.3%)
Guest experience*	13,206		16,035			(17.6%)

 

*The Guest Experience segment has been restated to exclude Professional Services that are not being provided in conjunction with one of our products. The prior period Guest Experience revenue was $22.6m being the sum of the Guest Experience and Professional Services H1 2023 amounts.

Professional Services

For the current period we have split revenues generated within The Experience Engine^TM (TE2) between platform fees, which remain in the Guest Experience segment, and the delivery of bespoke Professional Services to large customers in the ski, theme park, and cruise ship markets, which move to a separate Professional Services segment.

The platform fees for TE2 were in line with our expectation and were 2.4% ahead of the prior period.

Our Professional Services segment revenues cover those that are not associated with a particular product. As a key technology infrastructure partner, large attraction and leisure operators look to us to provide support for their own internal project cycles. We realise that this element of our business will fluctuate year over year, however we are positioned to take the opportunities when they arise. In H1 2024, Professional Services revenues were down an expected $1.8m (30.6%) reflecting anticipated project fluctuations with two of our larger customers when compared to H1 2023.

 

Revenue on a geographical basis was as follows:

                                                                                                                                                                                                

		Six months ended 30 June 2024   Unaudited		Six months ended 30 June 2023   Unaudited*
		$000		$000		%
USA		41,562		44,507		(6.6%)
Canada		2,317		1,525		51.9%
United Kingdom		14,565		11,550		26.1%
Other Europe		3,049		2,796		9.0%
Middle East		1,184		-		-
Asia/Australia/South Pacific/Africa		4,221		3,374		25.1%
Mexico		1,845		1,688		9.3%
Other Central and South America		451		343		31.5%
Total revenue		69,194		65,783		5.2%

 

*This disclosure has been enhanced to present disaggregated revenue for USA, Canada in the comparative period. USA and Canada were previously presented as an aggregated total of $46.0m.

Our revenues in the USA decreased 6.6% compared to H1 2023 which includes the planned decrease in virtual queueing seasonal staffing cost reimbursement as well as the decrease in Professional Services revenues discussed earlier in this report. These decreases were offset by revenues from our ticketing products, predominantly accesso Horizon but also accesso Passport and accesso ShoWare. Canadian revenues increased 51.9% following a full period of accesso Paradox revenues after the acquisition in late April 2023.

As noted above, the primary reason for the 26.1% increase in UK revenues was the performance of the Distribution business following the signing of new distributor agreements in H2 2023.

We generated $1.2m revenues in Middle East as well as increasing revenues in Other Asia, Australia and South Pacific by 25.1%. These increases are a result of the acquisition of accesso Horizon which is delivering ongoing projects to blue chip customers in Middle East, Japan, and Singapore as well as the completion of a major zoo implementation in Australia.

Similarly, our European revenues benefitted from $0.5m revenues generated through the Italian office of accesso Horizon.

Our Mexico, Central and South American regions continued to improve upon their positive performance in 2023 with revenue increases of 9.3% and 31.5% respectively. This is the result of the live entertainment products delivering volumes in excess of the prior period.

 

Revenue quality

		Six months ended 30 June 2024     Unaudited		Six months ended 30 June 2023   Unaudited*
		$000		$000	%
Virtual queuing		9,417		10,150	(7.2%)
Virtual queuing seasonal staffing cost reimbursement		-		2,811	(100.0%)
Ticketing and eCommerce		41,649		36,968	12.7%
Transactional revenue		51,066		49,929	2.3%
Maintenance and support		5,044		3,842	31.3%
Platform fees		1,694		1,655	2.4%
Recurring license revenue		1,072		354	202.5%
Total Repeatable		58,876		55,780	5.5%
One-time licence revenue		856		828	3.4%
Professional services inclusive of product related fees		5,650		6,655	(15.1%)
Non-repeatable revenue		6,506		7,483	(13.1%)
Hardware		1,927		1,245	54.8%
Other		1,885		1,275	47.8%
Other revenue		3,812		2,520	51.3%
Total revenue		69,194		65,783	5.2%
Total Repeatable as % of total		85.1%		84.8%

*Certain revenue categorisations have been reclassified in the prior year comparative to reflect the alignment of revenues from acquisitions in the prior period with the existing products. Categorisation for the prior period to 30 June 2023 was previously disclosed as follows: Maintenance and support ($3,454k), Recurring license revenue ($nil), One-time license fees ($1,182k) and Professional services inclusive of product related fees ($7,044k). With these reclassifications, the total percentage of repeatable revenue for the prior period has increased to 84.8% from 84.0%.

The above is an analysis of the Group's revenue by type. Transactional revenue consisting of Virtual Queuing, Ticketing and eCommerce is defined as revenue earned as either a fixed amount per sale of an item, such as a ticket sold by a customer, or as a percentage of revenue generated by a venue operator. Normally, this revenue is repeatable where a multi-year agreement exists and purchasing patterns by venue guests do not significantly change, as they did in 2020 as a result of the pandemic. Other repeatable revenue is defined as revenue, excluding transactional revenue, that is expected to be earned through each year of a customer's agreement, without the need for additional sales activity, such as maintenance and support revenue.

Repeatable revenue of 85.1% is consistent with the 84.8% H1 2023. Non-repeatable revenue is revenue that occurs one-time (e.g. up-front license 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.

The Group's transactional revenue streams have continued to grow, up 2.3% on H1 2023, largely driven by the increase in distribution revenue discussed above.

Maintenance and support revenue increased 31.3% and recurring license revenue increased by 202.5% following the acquisition of accesso Horizon which has a largely operated a license and support model, comprising both one-time licenses and repeatable recurring licenses, rather than our typical usage basis for ticketing & eCommerce customers.

Non-repeatable revenue is revenue that occurs one-time (e.g., up-front license 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. There was a 13.1% decrease in non-repeatable revenue owing to lower Professional Services for the reasons set out earlier in this review.

Other revenues (primarily hardware-related) were 51.3% higher than H1 2023. Hardware revenues are primarily the large sale of accesso Prism bands to a blue-chip customer that typically arise biannually. Other revenues comprise 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 recorded a gross profit increase of 9.1% from $48.3m to $52.7m. This gross profit was delivered at an improved gross margin of 76.2% (H1 2023: 73.5%). This improvement in gross margin is reflective most notably of the removal of the seasonal staffing reimbursement revenue from the Group's virtual queueing agreement with a customer.

Administrative expenses

Reported administrative expenses increased 4.9% to $51.5m in the period (H1 2023: $49.1m) and underlying administrative expenditure increased by 10.8% to $46.6m. Both metrics increased due to the inclusion of a full period of costs from the three acquisitions made in H1 2023. Excluding the impact of these acquisitions and the related acquisition costs on both periods, reported administrative expenses would have increased 1.1% and underlying administrative expenses by 4.3%. The Group's headcount, including contractors, has slightly decreased in the current period from 692 at the end of December 2023 to 680 at the end of June 2024. We are continuing to mitigate the impact of revenue shortfalls by managing the cost base accordingly.

 

		Six months ended 30 June 2024		Six months ended 30 June 2023
		Unaudited		Unaudited
		$000		$000
Administrative expenses as reported		51,516		49,127
Capitalised development expenditure (1)		1,238		1,616
Amortisation related to acquired intangibles		(1,962)		(668)
Share-based payments		(2,163)		(1,059)
Amortisation and depreciation (2)		(2,363)		(4,706)
Property lease payments and receipts not in administrative expense		396		262
Exceptional expenditure on acquisition & integration related costs		(24)		(2,466)
Underlying administrative expenditure		46,638		42,106

 

(1)      See consolidated cash flow statement.

(2)      This excludes acquired intangibles but includes depreciation on right of use assets.

 

Cash EBITDA

The Group delivered cash EBITDA for the period of $6.5m (H1 2023 $6.5m). While the Group has increased gross profit by $4.4m, this has been offset by a similar increase in underlying administrative expenses. As explained earlier in this review, we had anticipated further revenue growth in H1 2024 from our Middle East projects however these project timelines have shifted. As a result, our cash EBITDA, while in line with the prior period, is below our expectations. As a Group we continue to invest heavily in our products, our total development expenditure increased to $21.8m, 2.8% higher than H1 2023 because of the spend on acquired products, accesso Horizon and accesso Paradox. These development costs include accesso Freedom, our new food and beverage platform, which has seen positive sales momentum since its launch in November 2023.

The table below sets out a reconciliation between statutory operating profit and cash EBITDA:

		Six months ended 30 June 2024		Six months ended 30 June 2023
		Unaudited		Unaudited
		$000		$000
Operating profit / (loss)		1,208		(801)
Add: Exceptional expenditure on acquisition & integration related costs		24		2,466
Add: Amortisation related to acquired intangibles		1,962		668
Add: Share-based payments		2,163		1,059
Add: Amortisation and depreciation (excluding acquired intangibles)		2,363		4,705
Less: Capitalised internal development costs paid in cash		(1,238)		(1,616)
Cash EBITDA		6,482		6,481

 

The Group recorded an operating profit of $1.2m in H1 2024 (H1 2023: loss of $0.8m); and adjusted earnings per share in the first half of 2024 of 8.65 cents (H1 2023: 7.50 cents).

 

Development expenditure

	Six months ended 30 June 2024		Six months ended 30 June 2023
	Unaudited		Unaudited*
Total development expenditure	21,848		21,246
% of total revenue	31.6%		32.3%

 

*Development expenditure for the period ended 30 June 2023 has been restated to exclude $0.5m relating to product delivery which was previously categorised within development.

 

Our total development expenditure for H1 2024 increased to $21.8m, 2.8% higher than H1 2023, driven by a full period of the acquired entities, accesso Paradox and accesso Horizon, expenditure being included within H1 2024. These increases were offset by the impact of several staffing reductions made toward the end of H2 2023 within the Engineering functions. These reductions reflected changes in the Group's product roadmaps following the acquisitions made during H1 2023.

Development expenditure represents all expenses incurred by the Group's Engineering and Product Management functions, predominantly comprising payroll and software related costs. It is important to note that although these costs include research and development activities to determine product roadmaps and the engineering resources to deliver those items, the categorization also include a wider range of expenses. Costs to maintain our existing solutions and work with our customers to provide help desk technical support are also reflected in development expenditure. The Group's own internal IT & Security functions as well as staffing related to cloud infrastructure support for our SaaS solutions are a further part of the categorisation. The Group is evaluating options to present this development spend on a more disaggregated basis.

The Group capitalises elements of development expenditure where it is appropriate and in accordance with IAS 38 Intangible Assets. Capitalised development expenditure of $1.2m (H1 2023: $1.6m) represents 5.7% (H1 2023: 7.6%) of total development expenditure. The Group's research and development includes both the improvement of existing customer products, which in turn leads to increased customer satisfaction and retention, as well as a focus on creating new revenue streams. It continues to be critical to continue to meet and exceed the expectations of our existing customers' requirements and the current solutions they utilise. Development continues to expand the product set and add features that will be important for our customers' operations in the future. 

Cash and net cash

Net cash at the end of the period has reduced to $18.3m from $31.5m at 31 December 2023. This is the result of a working capital cycle that follows the seasonality of the Group's trade which peaks in the summer months with cash generation following shortly thereafter.

				30 June 2024		30 June 2023		31 December 2023
				$000		$000		$000
Cash in hand & at bank				37,202		43,175		51,814
Borrowings				(18,910)		(33,993)		(20,349)
Net cash				18,292		9,182		31,465

 

The Group delivered operating cashflow before movements in working capital of $7.8m (H1 2023: $6.3m). This increase was due to greater profitability in the current period.

The Group had an outflow of $5.6m from financing activities. This included outflows of $2.8m on the purchase and cancellation of accesso's own shares through the buyback programme and a repayment of $1.5m on the Group's revolving credit facility. As of 30 June 2024, the Group had drawn $19.75m ($18.9m net of finance costs) of the $40.0m facility that expires in May 2027.

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 H2 2023, the Board approved a share repurchase programme of up to £4.0m. During the period, a further 407,712 shares were repurchased and cancelled for $2.8m (GBP £2.2m). 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).

 

Post period end, the Board approved a further share repurchase programme of up to £4.0m which commenced on August 23, 2024. As of 25 September 2024, 334,801 shares have been purchased under this programme for a total consideration of $2.3m (GBP £1.8m).

 

Impairment

In line with relevant accounting standards, the Group reviews the carrying value of all intangible assets on an annual basis or at the interim where indicators of impairment exist.  Management is not aware of any conditions arising in the period to 30 June 2024 which would materially impact the recoverable amount for each CGU.

Taxation

The effective tax rate (being the tax rate on profit before income tax) for the period was 27.7% (H1 2023: 27.6%). The effective tax rate for the full year is likely to be similar to the half year.

- ENDS -

Consolidated statement of comprehensive income

for the six-month period ended 30 June 2024

 

		30 June 2024 Unaudited	30 June 2023 Unaudited		31 December 2023 Audited
	Notes	$000	$000		$000
Revenue		69,194	65,783		149,515
Cost of sales		(16,470)	(17,457)		(35,268)
Gross profit		52,724	48,326		114,247
Administrative expenses		(51,516)	(49,127)		(104,308)
Operating profit before exceptional items		1,232	1,665		12,635
Acquisition and integration related expenditure		(24)	(2,466)		(2,690)
Impairment of intangible assets		-	-		(6)
Operating profit / (loss)		1,208	(801)		9,939
Finance expense		(1,184)	(509)		(2,084)
Finance income		273	447		953
Profit / (Loss) before tax		297	(863)		8,808
Income tax (charge) / benefit	4	(82)	238		(1,116)
Profit / (Loss) for the period		215	(625)		7,692
Other comprehensive income
Items that will be reclassified to income statement
Exchange differences on translating foreign operations		394	2,597		3,138
		394	2,597		3,138
Total comprehensive income		609	1,972		10,830
All loss and comprehensive loss is attributable to the owners of the parent
Earnings / (Loss) per share expressed in cents per share:
Basic	6	0.53	(1.51)		19.19
Diluted	6	0.51	(1.51)		18.67

 

 

All activities of the company are classified as continuing.

 

 

 

 

Consolidated statement of financial position as at 30 June 2024

	30 June 2024		30 June 2023		31 December 2023
	Unaudited		Unaudited Restated*		Audited
	$000		$000		$000
Assets
Non-current assets
Intangible assets	163,466		164,523		165,188
Property, plant and equipment	1,065		1,430		1,346
Right of use assets	1,591		2,024		1,609
Contract assets	634		251		784
Deferred tax	16,869		15,479		16,703
	183,625		183,707		185,630
Current assets
Inventories	447		576		1,115
Finance lease receivables	85		-		165
Contract assets	5,176		4,944		3,345
Trade and other receivables	28,997		26,138		29,700
Income tax receivable	2,340		3,830		2,199
Cash and cash equivalents	37,202		43,175		51,814
	74,247		78,663		88,338
Liabilities
Current liabilities
Trade and other payables*	23,225		25,401*		34,939
Lease liabilities	759		689		792
Contract liabilities	5,087		5,670		7,353
Corporation tax payable	5,599		386		6,115
	34,670		32,146		49,199
Net current assets	39,577		46,517		39,139
Non-current liabilities
Deferred tax	8,808		9,712		8,821
Contract liabilities	762		138		927
Lease liabilities	1,057		1,518		1,177
Borrowings	18,910		33,993		20,349
	29,537		45,361		31,274
Total liabilities	64,207		77,507		80,473
Net assets	193,665		184,863		193,495
Shareholders' equity
Called up share capital	602		598		603
Share premium	154,171		153,741		153,948
Retained earnings	29,274		23,321		31,196
Merger reserve	19,641		19,641		19,641
Translation reserve	(2,052)		(2,987)		(2,446)
Own shares held in trust	(7,980)		(9,451)		(9,451)
Capital redemption reserve	9		-		4
Contingently issuable shares*	-		-*		-
Total shareholders' equity	193,665		184,863		193,495

 

*Contingently issuable shares of $1.0m have been reclassified to trade and other payables as a current liability in the comparative

Period. These relate to contingent consideration in relation to the acquisition of Paradocs Solutions, Inc on 21 April 2023 and were

previously disclosed within equity for the period ended 30 June 2023.

 

Consolidated statement of cash flows

for the six-month period ended 30 June 2024

	30 June 2024 Unaudited		30 June 2023 Unaudited Restated*		31 December 2023 Audited
	$000		$000		$000
Cash flows from operations
Profit / (Loss) for the period	215		(625)		7,692
Adjustments for:
Depreciation (excluding finance leased assets)	463		495		975
Depreciation on leased assets	285		187		467
Amortisation on acquired intangibles	1,962		668		2,811
Amortisation on development costs and other intangibles	1,616		4,024		6,390
Impairment of intangible assets	-		-		6
Loss on disposal of fixed assets	5		103		207
Share-based payments	2,163		1,059		3,187
Movement on bad debt provision	132		(112)		41
Finance expense	1,184		509		2,084
Finance income	(273)		(447)		(953)
Foreign exchange loss / (gain)	(64)		673		(187)
Income tax (credit) / charge	82		(238)		1,116
Operating cashflow before movement in working capital	7,770		6,296		23,836
Decrease / (Increase) in inventories	667		(77)		(614)
Decrease in trade and other receivables	742		5,762		2,082
(Increase) / decrease in contract assets/contract labilities	(4,092)		(2,247)		1,960
(Decrease) in trade and other payables	(11,495)		(9,819)		432
Cash (used in) / generated from operations	(6,408)		(85)		27,696
Tax paid	(894)		(1,402)		(2,003)
Net cash (outflow) / inflow from operating activities	(7,302)		(1,487)		25,693
Cash flows from investing activities
Acquisition of VGS Companies (net of cash acquired)	-		(39,323)*		(39,323)
Acquisition of Paradocs Solutions, Inc. (net of cash acquired)	-		(8,845)*		(8,845)
Acquisition of Boxer Consulting Limited (net of cash acquired)	-		(1,792)*		(1,792)
Capitalised internal development costs	(1,238)		(1,616)		(2,839)
Purchase of intangible assets	-		(15)		(14)
Purchase of property, plant and equipment	(200)		(148)		(638)
Proceeds from sale of intangible assets	1		-		-
Proceeds from sale of property, plant and equipment	-		-		8
Interest received	391		467		805
Net cash used in investing activities	(1,046)		(51,272)		(52,638)
Cash flows from financing activities
Share issue	3		120		129
Purchase of shares held in trust	-		(3,676)		(3,676)
Purchase of own shares for cancellation	(2,828)		-		(2,186)
Interest paid	(847)		(291)		(1,387)
Payments on property lease liabilities	(476)		(261)		(668)
Proceeds from property lease receivables	80		-		33
Cash paid to refinance	-		(630)		(1,040)
Proceeds from borrowings	-		35,000		35,000
Repayments of borrowings	(1,500)		-		(13,750)
Net cash (used in) / generated from financing activities	(5,568)		30,262		12,455
(Decrease) in cash and cash equivalents in the period	(13,916)		(22,497)		(14,490)
Cash and cash equivalents at beginning of year	51,814		64,663		64,663
Exchange (loss) / gain on cash and cash equivalents	(696)		1,009		1,641
Cash and cash equivalents at end of period	37,202		43,175		51,814

 

*The purchase of acquisitions net of cash acquired was previously disclosed in the H1 2023 Interim Statement as a single total of $49,982k based on estimated acquisition figures at 30 June 2023. This has been restated to apportion between each acquisition and includes an amendment of $22k in relation to the VGS Companies acquired on 20 June 2023 on finalisation of the cash acquired, aligning with the presentation of the Financial Statements for the year ended 31 December 2023.