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 [email protected]. 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 Steve Brown, Chief Executive Officer Fern MacDonald, 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
Dentons Global Advisors James Melville Ross, Methuselah Tanyanyiwa		+44 (0)20 7550 9225

 

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. Follow accesso on X, LinkedIn and Facebook.

 

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 and Distribution	Guest Experience	Group	Ticketing and Distribution	Guest Experience	Group
	$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
Administrative expenses		(104,308)		(91,209)
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

Registered Number: 03959429		31 December 2023		31 December 2022
	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