TIDMACC
RNS Number : 8296E
Access Intelligence PLC
04 July 2023
ACCESS INTELLIGENCE PLC
("Access Intelligence", the "Company" or the "Group")
INTERIM RESULTS
Access Intelligence Plc, (AIM: ACC) the technology innovator
delivering Software-as-a-Service ("SaaS") solutions for the global
marketing and communications industries, is pleased to announce its
unaudited half year results for the six months ended 31 May
2023.
Highlights:
As outlined in its trading update of 22 June 2023, the Group has
continued to make progress against its strategic objectives, most
importantly delivering its first six-month period of Annual
Recurring Revenue ("ARR") growth in the APAC region since the
acquisition of Isentia, alongside continued ARR growth in the EMEA
& NA market:
-- The Group's ARR increased by GBP1.4 million(1) in the period,
demonstrating a significant increase in momentum in ARR growth
across the Group when compared to ARR growth of GBP0.5 million(1)
in H1 2022. Each individual region contributed to the ARR growth
during the first half.
ARR FY22 H1 23 Change in
ARR
EMEA & North America (Constant GBP29.4m GBP30.5m +GBP1.1m
Currency)
--------- --------- ----------
EMEA & North America (Reported) GBP29.4m GBP30.5m +GBP1.1m
--------- --------- ----------
APAC (Constant Currency) GBP29.0m GBP29.3m +GBP0.3m
--------- --------- ----------
APAC (Reported) GBP30.6m GBP29.3m -GBP1.3m
--------- --------- ----------
Group (Constant Currency) GBP58.4m GBP59.8m +GBP1.4m
--------- --------- ----------
Group (Reported) GBP60.0m GBP59.8m -GBP0.2m
--------- --------- ----------
-- Total revenue for the period was GBP31.3 million (H1 2022:
GBP32.7 million) with 95% of revenue being recurring (H1 2022:
93%).
-- The Group delivered Adjusted EBITDA(2) in the period of
GBP2.0 million (H1 2022: GBP0.3 million), a year-on-year increase
of GBP1.7 million.
-- As a result of the actions taken over the last two years to
optimise the business for profitable growth and free cash flow
generation, the Board anticipates the delivery of higher adjusted
EBITDA and cash generation in the second half in line with full
year expectations.
Christopher Satterthwaite, non-executive Chairman,
commented:
"As outlined in June, Access Intelligence has delivered a
significant increase in ARR growth(1) during the first half of the
year. This growth has been observed in all global regions serviced,
and for the first time since the acquisition of Isentia, there has
been ARR growth in the APAC region.
The full release of the Group's next generation platform into
the APAC market during the next few months provides a considerable
opportunity for accelerated growth. Both existing and potential
customers in the region will be able to benefit from Access
Intelligence's market-leading technology, positioning the Group
well for further expansion. In the EMEA and North America region,
growth has been sustained with a focus on providing a wider range
of the Group's products to both new and existing customers at
higher average order values.
The Board continues to focus on improving profitability and cash
generation. Several cost optimisation initiatives have already been
implemented and there will be continued emphasis on delivering a
lean operating model as the Group continues to grow.
Overall, t he Board is pleased with the progress being made and
remains confident in the outlook for the Group in the second half
of the year and beyond."
1. On a constant currency basis
2. Adjusted EBITDA is earnings before interest, tax,
depreciation and amortisation and adjusted for share based
payments, share of losses of an associate and non-recurring
expenses primarily relating to acquisition, integration and
restructuring costs in respect of Isentia.
For further information:
Access Intelligence plc 020 3426 4024
Joanna Arnold (CEO) / Mark Fautley (CFO)
finnCap Limited (Nominated Adviser and Broker) 020 7220 0500
Corporate Finance:
Marc Milmo / Fergus Sullivan
Corporate Broking:
Alice Lane / Sunila de Silva
Chairman's statement
I am pleased to announce our unaudited interim results for the
six months ended 31 May 2023.
In an increasingly noisy world, being relevant and distinctive
has gone beyond a nice to have, it's become a survival strategy.
For marketers and communicators, the only way to stay relevant is
by knowing their audience.
But what we used to call audiences has fundamentally changed:
the internet and the end of mass media and linear media consumption
has fragmented audiences, going from mass fan bases to a
multiplicity of niches, and from cultural moments to cultural
movements. This poses a significant challenge for marcomms
professionals.
Access Intelligence harnesses the digitalisation of audiences to
make audience intelligence more accessible to organisations of all
kinds and all sizes. By powering the world's leading audience
intelligence platform that harnesses rich data sets, artificial
intelligence and human minds, the Group's customers can tap into
the most nuanced and actionable insights on their customers,
markets, and society.
Continued growth in EMEA & North America
The Group's business in the EMEA and North America markets has
demonstrated sustained growth, delivering an increase in ARR of
GBP1.1 million in the period and with total regional ARR reaching
GBP30.5 million at 31 May 2023. The business continues to build a
good pipeline in the region, including a number of significant
strategic opportunities. Whilst these more strategic opportunities
have a longer sales cycle than the majority of the Group's
pipeline, they represent some of the most interesting use cases for
Access Intelligence's technology and insights offerings. They also
reflect the longer-term market opportunity for Access Intelligence
to increase average order values by signing up a greater proportion
of new business sales from larger, more technical contracts using a
wider range of the Group's product offering.
New client wins in EMEA and North America include: Basis
Technologies, the British Fashion Council, Carnival, the Delegation
of the European Union to the United Kingdom, Dentsu, the English
Football League, Havas, HM Land Registry, The Insolvency Service,
Iris Worldwide, Matalan, Mayborn Group, McCann, The National
Lottery Heritage Fund, The National Trust, the Office of the
Children's Commissioner, Ofgem, Penguin Random House, Punch
Taverns, Sayara International, Student Loans Company, and Tate
& Lyle.
First ARR growth delivered in APAC
In APAC there has been positive momentum with the region
delivering ARR growth of GBP0.3 million(1) in the period, with
total regional ARR of GBP29.3m at 31 May 2023. By comparison, ARR
had declined by GBP0.7 million(1) in the first half of FY2022.
The first six months of the current financial year are the first
period of ARR growth delivered in APAC since the acquisition of
Isentia in September 2021 and reflect the stabilisation of the
business in the region as it has been integrated into the wider
Group. There has been strong engagement with customers and there
remains a considerable opportunity to continue to combine Isentia's
established media monitoring and insights services in the region
alongside Access Intelligence's audience intelligence offering.
This return to growth in the region has been delivered ahead of the
release of the Group's fully integrated next generation platform
into the market in the next few months.
The Group has won a number of new clients (including client win
backs) in the region during the first half, including: CBRE, the
Department of Employment & Workplace Relations, the Department
of Fire and Emergency Services, the Department of Health and Aged
Care, FIFA, Mecca Brands, Merlin Entertainments, Mercedes, New
Zealand Rugby, Senate of the Philippines, Tesla, Uluru Dialogues
and University of Canberra.
Optimisation of the Group's operations
A key focus throughout 2023 and beyond is to ensure that the
Group has a stable, profitable and cash generative core business as
the platform from which to grow in all serviced global regions.
Management continuously seeks to optimise the Group's operational
structure, supported by the delivery of substantial synergies as
part of the integration of Isentia into the Group alongside other
cost reduction initiatives. Recurring administrative expenditure
has reduced by approximately 11% year on year from GBP24.1 million
in H1 2022 to GBP21.4 million in H1 2023, with non-recurring costs
incurred during the first half to achieve this reduction.
In addition to focussing on improved profitability, the Group's
invoicing profile is changing in certain regions leading to an
enhancement in its working capital management. Contract liabilities
have increased by GBP2.8 million year on year as a greater
proportion of customer contracts are invoiced annually in advance
with the associated benefit to cash flow. This is expected to
continue in the second half alongside further growth in
profitability.
Results for the half year
The primary key performance indicator monitored by the Board is
the growth in ARR year-on-year. This reflects the annual value of
new business won, together with upsell into the Company's existing
customer base as it delivers against its land and expand strategy,
less churn. It is an important metric for the Group as it is a
leading indicator of future revenue.
During the period, the Group's ARR grew by GBP1.4 million(1) (H1
2022: GBP0.5 million(1) ). ARR at 31 May 2023 was GBP59.8 million,
comprising GBP30.5 million in EMEA and North America and GBP29.3
million in APAC.
Revenue for the period was GBP31.3 million (H1 2022: GBP32.7
million), with recurring revenue comprising 95% of total revenue
for the period (H1 2022: 93%).
EMEA & North America revenue increased by GBP1.0 million
year on year to GBP13.6 million (H1 2022: GBP12.6 million) as a
result of ongoing ARR growth in the region. Recurring revenue
comprised 98% of total EMEA & North America revenue in the
period (H1 2022: 95%).
APAC revenue declined by GBP2.4m year on year to GBP17.7 million
(H1 2022: GBP20.1 million) due to the combined effect of the
reduction in ARR in FY22 being reflected in revenue in the period
and a reduction in non-recurring campaign revenue. Recurring
revenue comprised 92% of total APAC revenue in the period (H1 2022:
90%) with non-recurring revenue being lower in FY23 due to
customers running fewer one-off campaigns given wider
macro-economic conditions.
The Group delivered a gross margin of 75% in the period (H1
2022: 75%) despite the lower year on year revenue due to synergies
achieved on infrastructure and data feeds, alongside reduced
variable costs of sale.
Adjusted earnings before interest, tax, depreciation and
amortisation ("EBITDA") were GBP2.0 million (H1 2022: GBP0.3
million). Adjusted EBITDA excludes certain non-recurring expenses
totalling GBP3.8 million for the period (H1 2022: GBP1.4 million),
in addition to the Group's share of loss of an associate of GBP0.1
million (H1 2022: GBP0.1 million) and a share-based payments charge
of GBP0.5 million (H1 2022: GBP0.6 million).
Non-recurring items in the period included restructuring and
migration costs in respect of the Isentia acquisition of GBP3.6
million (H1 2022: GBP0.9 million) and legal costs in respect of
Australian copyright of GBP0.2 million (H1 2022: GBP0.4 million).
Reported EBITDA loss was GBP2.5 million (H1 2022: loss of GBP1.7
million).
The Group has continued to increase investment in its software
platforms with identifiable new product development activity being
capitalised. The Group capitalised development costs of GBP4.2
million for the period (H1 2022: GBP3.5 million), with a further
GBP1.1 million (H1 2022: GBP1.4 million) of product, research and
development costs being expensed through profit and loss.
The Group's operating loss was GBP6.0 million (H1 2022: loss
GBP7.4 million). The Group incurred GBP3.5 million of depreciation
and amortisation charges (H1 2022: GBP5.7 million).
The basic loss per share was 6.29p (H1 2022: loss 1.50p).
The Group held cash at the end of the period of GBP2.7 million
(H1 2022: GBP9.3 million). It does not currently have a loan
facility in place but will continue to evaluate options for this
during the second half.
Outlook
During the first half of 2023, Access Intelligence has focused
its activities in two key areas: continued advancement of its
market leading products including the release of the Group's next
generation platform into the APAC region; and refinement of the
Group's operating model to improve EBITDA margins and free cash
flow conversion.
The ongoing investment in products and operations will provide
customers across all regions with a fully integrated offering that
goes beyond media monitoring and social listening to deliver deep
audience intelligence.
This enhanced offering supports the continued scaling of the
business through improved sales and renewals and is expected to
result in increased average order values as a greater number of
customers take a wider suite of the Group's products and services.
This trend has been clear over recent years with Access
Intelligence's largest customer in 2018 generating revenue of
GBP60k, whereas the Group now has over 150 customers with annual
contract values exceeding GBP50k and a significant number with
annual contract values exceeding GBP100k.
The ARR growth delivered by the Group during the first half is
expected to contribute to higher revenue in the second half, whilst
the Group's pipeline also continues to grow with a number of
strategic opportunities expected to close during Q3.
Access Intelligence's ongoing efforts to optimise its operating
model have already resulted in a significant reduction in year on
year recurring administrative expenses and costs of sale. These
efforts will continue as the Group's technology is made available
to all customers globally in a fully integrated platform.
Overall, t he Board is pleased with the progress being made and
remains confident in the outlook for the Group in the second half
of the year and beyond.
Christopher Satterthwaite
Non-executive Chairman
Access Intelligence Plc
Consolidated Statement of Comprehensive Income
for the six months ended 31 May 2023
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended
31-May-23 31-May-22 30-Nov-22
GBP'000 GBP'000 GBP'000
Revenue 31,277 32,731 65,710
Cost of sales (7,927) (8,280) (15,915)
--------- --------- -----------
Gross profit 23,350 24,451 49,795
Recurring administrative expenses (21,364) (24,131) (47,468)
--------- --------- -----------
Adjusted EBITDA 1,986 320 2,327
Non-recurring administrative expenses (3,849) (1,369) (1,215)
Share of loss of associate (116) (125) (254)
Share-based payments (498) (564) (1,121)
--------- --------- -----------
EBITDA (2,477) (1,738) (263)
Depreciation of tangible fixed assets (270) (324) (747)
Depreciation of right-of-use assets (944) (1,168) (2,140)
Amortisation of intangible assets
- internally generated (1,118) (932) (1,745)
Amortisation of intangible assets
- acquisition related (1,179) (3,263) (2,312)
--------- --------- -----------
Operating loss (5,988) (7,425) (7,207)
Financial income 7 5 14
Financial expense (137) (151) (295)
--------- --------- -----------
Loss before tax (6,118) (7,571) (7,488)
Taxation credit 1,052 572 3,295
--------- --------- -----------
Loss for the period (5,066) (6,999) (4,193)
Other comprehensive income
Items that will or may be reclassified
to profit or loss (2,967) 5,085 2,427
--------- --------- -----------
Total comprehensive loss for the
period attributable to the owners
of parent company (8,033) (1,914) (1,766)
--------- --------- -----------
Earnings per share:
Basic loss per share (6.29)p (1.50)p (1.38)p
Diluted loss per share (6.29)p (1.50)p (1.38)p
Access Intelligence Plc
Consolidated Statement of Financial Position
at 31 May 2023
Unaudited Unaudited Audited
As at As at As at
31-May-23 31-May-22 30-Nov-22
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 68,142 67,358 69,269
Investment in associate 346 591 462
Right-of-use assets 2,450 2,661 1,896
Property, plant and equipment 688 975 861
Deferred tax assets 5,037 4,325 4,345
--------- --------- ---------
Total non-current assets 76,663 75,910 76,833
--------- --------- ---------
Current assets
Trade and other receivables 13,787 14,772 13,695
Current tax receivables 240 783 1,025
Cash and cash equivalents 2,670 9,291 4,922
Total current assets 16,697 24,846 19,642
--------- --------- ---------
TOTAL ASSETS 93,360 100,756 96,475
--------- --------- ---------
Current liabilities
Trade and other payables 10,285 7,649 8,945
Accruals 4,773 7,604 4,946
Contract liabilities 16,669 13,824 13,818
Provisions - 632 -
Lease liabilities 1,602 1,831 1,610
Total current liabilities 33,329 31,540 29,319
--------- --------- ---------
Non-current liabilities
Provisions 455 382 471
Lease liabilities 1,336 1,644 907
Deferred tax liabilities 5,401 7,578 5,404
--------- --------- ---------
Total non-current liabilities 7,192 9,604 6,782
--------- --------- ---------
TOTAL LIABILITIES 40,521 41,144 36,101
--------- --------- ---------
NET ASSETS 52,839 59,612 60,374
--------- --------- ---------
Equity
Share capital 6,526 6,528 6,526
Treasury shares (141) (148) (141)
Share premium account 74,424 74,372 74,424
Capital redemption reserve 395 395 395
Share option reserve 2,520 1,465 2,022
Foreign exchange reserve (231) 5,394 2,736
Other reserve 502 502 502
Retained earnings (31,156) (28,896) (26,090)
--------- --------- ---------
TOTAL EQUITY ATTRIBUTABLE
TO EQUITY SHAREHOLDERS 52,839 59,612 60,374
--------- --------- ---------
Access Intelligence Plc
Consolidated Statement of Changes in Equity
for the six months ended 31 May 2023
Share Treasury Share Capital Share Foreign Other Retained Total
capital shares premium redemption option exchange reserve earnings
account reserve reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 December
2021 6,528 (148) 74,419 395 901 309 502 (21,897) 61,009
Loss for the
period - - - - - - - (6,999) (6,999)
Other comprehensive
loss for the
period - - - - - 5,085 - - 5,085
Expenses related
to issue of share
capital - - (47) - - - - - (47)
Share-based payments - - - - 564 - - - 564
At 31 May 2022 6,528 (148) 74,372 395 1,465 5,394 502 (28,896) 59,612
------- -------- ------- ---------- ------- -------- ------- --------- -------
Profit for the
period - - - - - - - 2,806 2,806
Other comprehensive
loss for the
period - - - - - (2,658) - - (2,658)
Issue of share
capital (2) 7 52 - - - - - 57
Share-based payments - - - - 557 - - - 557
At 30 November
2022 6,526 (141) 74,424 395 2,022 2,736 502 (26,090) 60,374
------- -------- ------- ---------- ------- -------- ------- --------- -------
Loss for the
period - - - - - - - (5,066) (5,066)
Other comprehensive
loss for the
period - - - - - (2,967) - - (2,967)
Share-based payments - - - - 498 - - - 498
At 31 May 2023 6,526 (141) 74,424 395 2,520 (231) 502 (31,156) 52,839
------- -------- ------- ---------- ------- -------- ------- --------- -------
Access Intelligence Plc
Consolidated Statement of Cash Flow
for the six months ended 31 May 2023
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31-May-23 31-May-22 30-Nov-22
GBP'000 GBP'000 GBP'000
Loss for the year attributable
to shareholders (5,066) (6,999) (4,193)
Adjustments for:
Taxation (1,052) (572) (3,295)
Financial expense 137 151 295
Financial income (7) (5) (14)
Depreciation and amortisation 3,510 5,687 6,943
Share based payments 498 564 1,121
Share of loss of associate 116 125 254
Operating cash (outflow)/inflow
before working capital changes (1,864) (1,049) 1,111
Increase in trade and other receivables (92) (1,079) -
Increase in trade and other payables 1,363 119 1,351
(Decrease)/increase in accruals (173) 716 (1,942)
Increase in contract liabilities 2,851 1,680 1,674
(Decrease)/increase in provisions (16) 61 (438)
----------- ----------- ---------
Net cash inflow from operations
before taxation 2,069 448 1,756
Tax received 1,134 166 711
----------- ----------- ---------
Net cash inflow from operations 3,203 614 2,467
----------- ----------- ---------
Investing
Interest received 7 5 14
Acquisition of property, plant
and equipment (119) (211) (506)
Acquisition of software licences
and other intangible assets (34) - (60)
Cost of software development (4,169) (3,478) (7,986)
Net cash outflow from investing
activities (4,315) (3,684) (8,538)
----------- ----------- ---------
Financing
Interest paid (130) (144) (286)
Lease liabilities paid (917) (1,198) (2,356)
Issue of shares (net of costs) - (47) 10
Net cash outflow from financing
activities (1,047) (1,389) (2,632)
----------- ----------- ---------
Net decrease in cash (2,159) (4,459) (8,703)
Opening cash and cash equivalents 4,922 13,456 13,456
Exchange (losses)/gains on cash
and cash equivalents (93) 294 169
----------- ----------- ---------
Closing cash and cash equivalents 2,670 9,291 4,922
----------- ----------- ---------
Notes
1. Unaudited notes
Basis of preparation and accounting policies
The financial information for the six months to 31 May 2022 is
unaudited and was approved by the Board of Directors on Monday
3(rd) July 2023.
The interim financial statements do not include all of the
information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements for the year ended 30 November 2022.
The interim financial information for the six months ended 31
May 2023, including comparative financial information has been
prepared on the basis of the accounting policies set out in the
last annual report and accounts.
The preparation of the interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expense. Actual results
may subsequently differ from those estimates.
In preparing the interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and key sources of estimation uncertainty were the same,
in all material respects, as those applied to the consolidated
financial statements for the year ended 30 November 2022.
The Group has elected to present comprehensive income in one
statement.
Going concern assumption
The Group meets its day to day working capital requirements
through its cash balance but also maintains relationships with a
number of financial institutions and believes that, should it be
required, it would be able to put in place an appropriate working
capital facility. It did not have a bank loan or overdraft at 31
May 2023 and had a net cash balance of GBP2,670,000.
Consequently, after making enquires, the Directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. For
this reason, they continue to adopt the going concern basis of
accounting in preparing the interim financial statements.
Information extracted from the Group's 2022 Annual Report
The financial figures for the year ended 30 November 2022, as
set out in this report, do not constitute statutory accounts but
are derived from the statutory accounts for that financial
year.
The statutory accounts for the year ended 30 November 2022 were
prepared under IFRS and have been delivered to the Registrar of
Companies. The auditors reported on those accounts. Their report
was unqualified, did not draw attention to any matters by way of
emphasis and did not include a statement under Section 498(2) or
498(3) of the Companies Act 2006.
2. Revenue
The Group's revenue is primarily derived from the rendering of
services. The Group's revenue was generated from the following
territories:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31-May-23 31-May-22 30-Nov-22
GBP'000 GBP'000 GBP'000
United Kingdom 10,953 10,396 20,659
North America 1,363 1,480 2,586
Europe excluding UK 983 611 1,844
Australia and New Zealand 13,520 15,852 30,876
Asia 4,135 4,284 8,797
Rest of the world 323 108 948
31,277 32,731 65,710
3. Earnings per share
The calculation of earnings per share is based upon the loss
after tax for the respective period. The weighted average number of
ordinary shares used in the calculation of basic earnings per share
is based upon the number of ordinary shares in issue in each
respective period.
The impact of share options granted under the company's share
option scheme are anti-dilutive due to the Group being in a
loss-making position, so the weighted average number of ordinary
shares used in the calculation of diluted earnings per share is the
same as for basic earnings per share.
This has been computed as follows:
Unaudited Unaudited Audited
As at As at As at
31-May-23 31-May-22 30-Nov-22
Numerator
Loss for the year and earnings
used in basic EPS (GBP'000) (8,033) (1,914) (1,766)
Earnings used in diluted EPS
(GBP'000) (8,033) (1,914) (1,766)
Denominator
Weighted average number of
shares used in basic EPS ('000) 127,699 127,597 127,643
Effects of:
Dilutive effect of options N/A N/A N/A
Weighted average number of
shares used in diluted EPS
('000) 127,699 127,597 127,643
Basic loss per share (pence) (6.29) (1.50) (1.38)
Diluted loss per share (pence) (6.29) (1.50) (1.38)
4. Availability of interim results
The interim results will not be sent to shareholders but will be
available at the Company's registered office at The Johnson
Building, 79 Hatton Garden, London, EC1N 8AW and on the Company's
website: www.accessintelligence.com .
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