Interim Results

RNS Number : 4462F
Access Intelligence PLC
15 July 2019
 

ACCESS INTELLIGENCE PLC

 

("Access Intelligence", the "Company" or the "Group")

 

INTERIM RESULTS
 

 

Access Intelligence Plc (AIM: ACC), a leading supplier of Software-as-a-Service (SaaS) solutions for communications and reputation management, announces its unaudited half year results for the six months ended 31 May 2019.

 

Highlights:

·      First half revenue increased by approximately 42% to £6.2 million (H1 2018: £4.3 million).

·      Annual Contract Value ("ACV") base increased by approximately 45% year on year to £12.9 million (H1 2018: £8.9 million):

ACV base increased by £0.45 million during H1 (H1 2018: £0.36 million).

·      The Company delivered an Adjusted EBITDA* profit in the period of £379,000 (H1 2018: loss £55,000).

·      At 31 May 2019, cash balance was £1.76 million (H1 2018: £3.06 million).

·      ResponseSource Ltd ("ResponseSource") integration activity progressing in line with expectations, with customers to be migrated onto upgraded systems during Q3 2019.

·      92% of the expected £700,000 annualised synergy savings pursuant to the acquisition already achieved.

 

·      Continued investment in product development with new functionality added to support a range of artificial intelligence led insights alongside advanced data management that allows customers to manage sensitive data in accordance with increasingly stringent privacy law.

 

Christopher Satterthwaite, non-executive Chairman, commented:

 

"In this half year period, the Group delivered increased revenue and an Adjusted EBITDA profit of £379,000, driven by the acquisition of ResponseSource in 2018 and encouraging organic growth. We are pleased with the progress made which reflects the strength of the organisation and the value of its subscription-based revenue model. As the integration of ResponseSource with the Vuelio platform nears completion, we expect growth to accelerate due to the new services available to customers. We are progressing well on our journey to creating the market leading, intelligence platform set to transform reputation management." 

 

* 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 the acquisition and integration of ResponseSource

 

For further information:

Access Intelligence plc                                                                                   020 3426 4070

Joanna Arnold (CEO) / Mark Fautley (CFO)                                                                              

 

finnCap Limited (Nominated Adviser and Broker)                                             020 7220 0500

Marc Milmo / Kate Bannatyne / Matthew Radley                                                            

 

 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

 

 

Chairman's statement

 

I am pleased to announce our unaudited interim results for the six months ended 31 May 2019.

 

In this half year period, the Group delivered increased revenue and an Adjusted EBITDA profit driven by the acquisition of ResponseSource in 2018 and encouraging organic growth. This demonstrates the progress made and reflects the strength of the organisation and its revenue model.

 

The Group's Vuelio brand provides a software as a service ("SaaS") platform where revenues are underpinned by a growing, recurring base of subscriptions on annual or multi-year contracts. In the first half of 2019, approximately 98% of revenue was generated by customers on SaaS contracts, with the vast majority of these billed annually in advance.

 

Into the future, the Vuelio platform presents significant growth potential because it provides the insight and tools organisations need in a fast-changing communications landscape. Trends from digital disruption to political fragmentation make it imperative for organisations to be able to access real time, actionable, information on the debates and issues relevant to their specific needs.

 

As the integration of ResponseSource functionality with the Vuelio platform nears completion, growth is expected to accelerate as new benefits become available to both Vuelio and ResponseSource customers. It will unlock upsell opportunities from an expanded product suite that will allow customers to combine media monitoring with political insight and influencer analysis. This is integrated with a stakeholder management tool that provides customers with flexible workflow capabilities that improve overall effectiveness and productivity. The developments are fundamental to creating the market leading, intuitive, intelligence platform that will transform reputation management.  

 

While supporting expansion of the Vuelio product suite, the integration of ResponseSource also adds depth to the Access Intelligence media and influencer network with over 1,500 new customers. These include household brand names from L'Oreal and Panasonic to Pizza Express; professional services firms Accenture, Deloitte and KPMG; and the majority of the UK's top 150 PR agencies. The Access Intelligence customer portfolio now contains more than 3,000 organisations. 

 

The Directors remain confident about the ongoing growth opportunity for the remainder of the current financial year and beyond. Ongoing product development will deliver enhancements that are expected to improve retention, provide cost synergies and enhance margin. Bringing together the functionality of ResponseSource with the Vuelio platform will unlock value inherent in the vast store of media data built up across both organisations.

 

We will sustain the Company's growth by continuing to invest in the Access Intelligence network, expanding the potential of the platform and the benefit to the communications and marketing industries. To support our growth today and into the future, we have invested in expanded new premises for the London HQ, entering into an agreement for a new leasehold property in July 2019. This will provide capacity for the Group to finalise the ResponseSource integration by co-locating all employees in a single office with the move expected to be completed by the end of the current financial year. 

 

 

Results for the half year

 

A key financial metric monitored by the Board is the growth in the ACV base 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 any customer losses. It is an important metric for the Group as it is a leading indicator of future revenue.

 

Total ACV growth over the year from 1 June 2018 was 45% year on year with the Group having an ACV base of £12.9 million at 31 May 2019. £3.3m of the growth reflects the benefits of the ResponseSource acquisition, with the remaining £0.7m of growth being achieved organically. In the first half of 2019, the enlarged Group's ACV base grew by £0.45 million.

 

Revenue from continuing operations for the period grew by 42% to £6,159,000 (H1 2018: £4,346,000). The year-on-year increase was primarily driven by the ResponseSource acquisition, plus the growth in ACV delivered by Vuelio during the second half of the 2018 financial year and the first half of 2019. £4,465,000 of revenue in the period related to Vuelio and £1,694,000 related to ResponseSource. Recurring revenue comprised 98% of total revenue (H1 2018: 99%).

 

Gross profit from continuing operations increased by 51% year-on-year to £4,263,000 (H1 2018: £2,831,000) with gross margin increasing to 69% (H1 2018: 65%).

 

Adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA") were £379,000 compared to a loss of £55,000 in H1 2018. Adjusted EBITDA excludes certain non-recurring items totalling £662,000 for the period (H1 2018: £99,000), in addition to the Group's share of loss of an associate of £92,000 (H1 2018: £130,000) and a share-based payments charge of £21,000 (H1 2018: £Nil).

 

Non-recurring items in the period included transition and migration costs in respect of ResponseSource of £662,000 (H1 2018: £Nil). It is not anticipated that the transition and migration costs in respect of ResponseSource will continue into the financial year ended 30 November 2020. Reported EBITDA loss from continuing operations was £396,000 (H1 2018: loss of £284,000).

 

The Group increased its investment in the Vuelio platform with identifiable new product development activity being capitalised. The Group capitalised development costs of £1,048,000 for the period (H1 2018: £377,000), with a further £408,000 (H1 2018: £310,000) being expensed through profit and loss.

 

The Group's operating loss from continuing operations was £1,383,000 (H1 2018: loss £773,000). The Group incurred £987,000 of depreciation and amortisation charges (H1 2018: £489,000).

 

The basic loss per share from continuing operations was 2.25p (H1 2018 restated: loss 2.34p). H1 2018 earnings per share information has been restated to reflect the one-for-ten share consolidation completed in November 2018.

 

The Group held cash at the end of the period of £1,762,000 (H1 2018: £3,056,000). Of the £2,343,000 cash outflow from operating activities for the six months to 31 May 2018, £1,854,000 related to deferred consideration for ResponseSource, reflecting the free cash in the business at the date of completion. This deferred consideration payment represents the majority of the £1,876,000 reduction in trade and other payables between 30 November 2018 and 31 May 2019.

 

 

Current trading and outlook

 

In summary, the Group continues to trade in line with the Board's expectations for the current financial year. We are well into our journey to build the market leading platform for reputation management. Our technology led approach provides customers with the real time insights and intelligence they need to stay ahead in the constantly changing communications landscape. We will capitalise on this opportunity through continued investment and our product development strategy. We remain focussed on continued growth in scale and market position through a combination of organic growth, partnerships and acquisitions that will enhance the Group's capabilities and/or geographic reach. The opportunities created by this approach together with the undoubted progress we have made following the acquisition of ResponseSource gives us confidence in Access Intelligence's future growth potential.

 

 

 

Christopher Satterthwaite

Non-executive Chairman

 

 

 

 

Access Intelligence Plc

Consolidated Statement of Comprehensive Income

for the six months ended 31 May 2019

 

 

 

 

 

Unaudited

6 months ended

Unaudited

6 months ended

Audited

Year ended

 

31-May-19

31-May-18

30-Nov-18

Continuing operations

£'000

£'000

£'000

 

Revenue

 

6,159

 

4,346

 

8,888

Cost of sales

(1,896)

(1,515)

(3,083)

Gross profit

4,263

2,831

5,805

Recurring administrative expenses

(3,884)

(2,886)

(5,771)

Adjusted EBITDA

379

(55)

34

Non-recurring administrative expenses

(662)

(99)

(473)

Share of loss of associate

(92)

(130)

(222)

Share-based payments

(21)

-

-

EBITDA

(396)

(284)

(661)

Depreciation of tangible fixed assets

(47)

(36)

(78)

Amortisation of intangible assets

(940)

(453)

(818)

Operating loss

(1,383)

(773)

(1,557)

Financial expense

(58)

(166)

(160)

Loss before tax

(1,441)

(939)

(1,717)

Taxation credit

-

-

362

Loss for the period from continuing operations

(1,441)

(939)

(1,355)

Loss for the period from discontinued operations

-

(120)

(155)

Loss for the period

(1,441)

(1,059)

(1,510)

Other comprehensive income

-

-

-

Total comprehensive loss for the period attributable to the owners of parent company

 

(1,441)

 

(1,059)

 

(1,510)

 

Earnings per share:

 

 

 

 

Continuing and discontinued operations

 

 

 

Basic loss per share

(2.25)p

(2.63)p

(3.32)p

Diluted loss per share

(2.25)p

(2.63)p

(3.32)p

Continuing operations

 

 

 

Basic loss per share

(2.25)p

(2.34)p

(2.98)p

Diluted loss per share

(2.25)p

(2.34)p

(2.98)p

 

 

 

 

* 31 May 2018 earnings per share information has been restated to reflect the one-for-ten share consolidation completed in November 2018.

 

 

Access Intelligence Plc

Consolidated Statement of Financial Position at 31 May 2019

 

 

Unaudited

 

 

Unaudited

 

 

Audited

 

As at

 

As at

 

As at

 

31-May-19

 

31-May-18

 

30-Nov-18

 

£'000

 

£'000

 

£'000

 

Non-current assets

 

 

 

 

 

Intangible assets

14,188

 

6,155

 

14,033

Investments in associates

226

 

150

 

318

Property, plant and equipment

170

 

148

 

167

Deferred tax asset

37

 

206

 

37

Total non-current assets

 

14,621

 

 

6,659

 

 

14,555

Current assets

 

 

 

 

 

Trade and other receivables

4,344

 

3,081

 

3,640

Current tax receivables

362

 

  458

 

362

Cash and cash equivalents

1,762

 

3,056

 

5,300

Total current assets

 

6,468

 

 

6,595

 

 

9,302

TOTAL ASSETS

 

21,089

 

 

13,254

 

 

23,857

Current liabilities

 

 

 

 

 

Trade and other payables

2,037

 

1,590

 

3,913

Accruals

1,162

 

1,404

 

1,006

Provisions

171

 

-

 

75

Deferred revenue

6,749

 

4,541

 

6,354

Interest bearing loans and borrowings

139

 

135

 

210

 

10,258

 

 

7,670

 

 

11,558

Non-current liabilities

 

 

 

 

 

Provisions

-

 

256

 

96

Interest bearing loans and borrowings

840

 

869

 

867

Deferred tax liabilities

609

 

206

 

609

Total non-current liabilities

 

1,449

 

 

1,331

 

 

1,572

TOTAL LIABILITIES

 

11,707

 

 

9,001

 

 

13,130

 

NET ASSETS

 

 

9,382

 

 

4,253

 

 

10,727

 

Equity

 

 

 

 

 

Share capital

3,204

 

2,433

 

3,189

Treasury shares

(148)

 

(148)

 

(148)

Share premium

13,135

 

6,906

 

13,075

Capital redemption reserve

191

 

191

 

191

Share option valuation reserve

369

 

348

 

348

Equity reserve

-

 

-

 

-

Retained earnings

(7,369)

 

(5,477)

 

(5,928)

TOTAL EQUITY ATTRIBUTABLE TO EQUITY SHAREHOLDERS

 

9,382

 

 

4,253

 

 

10,727

 

Access Intelligence Plc

Consolidated Statement of Changes in Equity

for the six months ended 31 May 2019

 

 

 

 

 

 

Share

 

 

 

 

Share

Treasury

Share

Capital

option

Equity

Retained

Total

 

capital

Shares

premium

redemption

valuation

reserve

 earnings

 

 

 

 

account

 reserve

reserve

 

 

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 December 2017

1,743

(148)

2,352

191

348

255

(4,418)

323

Total comprehensive income for the period

-

-

-

-

-

-

(1,059)

(1,059)

Issue of share capital

350

-

2,361

-

-

-

-

2,711

Conversion of Convertible Loan Notes

340

-

2,193

-

-

(255)

-

2,278

 

 

 

 

 

 

 

 

 

At 31 May 2018

 

2,433

(148)

6,906

191

348

-

(5,477)

4,253

Total comprehensive income for the period

-

-

-

-

-

-

(451)

(451)

Issue of share capital

756

-

6,169

-

-

-

-

6,925

 

 

 

 

 

 

 

 

 

At 30 November 2018

3,189

(148)

13,075

191

348

-

(5,928)

10,727

Total comprehensive income for the period

-

-

-

-

-

-

(1,441)

(1,441)

Exercise of share options

15

-

60

-

-

-

-

75

Share-based payments

-

-

-

-

21

-

-

21

 

 

 

 

 

 

 

 

 

At 31 May 2019

 

3,204

(148)

13,135

191

369

-

(7,369)

9,382

 

 

 

 

 

 

 

 

 

 

 

 

Access Intelligence Plc

Consolidated Statement of Cash Flow

for the six months ended 31 May 2018

 

 

 

 

Unaudited

6 months ended

 

 

Unaudited

6 months ended

 

 

Audited

Year

ended

 

31-May-19

 

31-May-18

 

30-Nov-18

 

£'000

 

£'000

 

£'000

 

Loss for the year attributable to shareholders

 

(1,441)

 

 

 

(1,059)

 

 

(1,510)

 

Adjustments for:

 

 

 

 

 

Taxation

-

 

-

 

(362)

Depreciation and amortisation

987

 

489

 

896

Share option charge

21

 

-

 

-

Share of loss of associate

92

 

130

 

222

Financial expense

58

 

166

 

160

Loss on sale of A.I. Talent

-

 

29

 

64

Operating cash outflow before working capital changes

(283)

 

(245)

 

(530)

 

(Increase)/decrease in trade and other receivables

 

(698)

 

 

(21)

 

 

174

(Decrease)/increase in trade and other payables

(1,362)

 

729

 

2,414

Net cash (outflow)/inflow from operations

(2,343)

 

463

 

2,058

 

Tax received

 

-

 

 

-

 

 

458

Net cash (outflow)/inflow from operating activities

(2,343)

 

463

 

2,516

 

Investing

 

 

 

 

 

Acquisition of PPE

(49)

 

(37)

 

(78)

Acquisition of software licences

(48)

 

-

 

(36)

Cost of software development

(1,048)

 

(377)

 

(1,344)

Disposal of A.I. Talent Limited

-

 

(5)

 

(5)

Less: cash and cash equivalents disposed of

-

 

(142)

 

(142)

Investment in associate

-

 

-

 

(260)

Acquisition of ResponseSource Ltd

-

 

-

 

(5,000)

Net cash outflow from investing activities

(1,145)

 

(561)

 

(6,865)

 

Financing

 

 

 

 

 

Interest paid

(125)

 

(162)

 

(160)

Issue of shares

-

 

2,643

 

9,136

Exercise of share options

75

 

-

 

-

Net cash (outflow)/inflow from financing activities

(50)

 

2,481

 

8,976

 

Net (decrease)/increase in cash

 

(3,538)

 

 

2,383

 

 

4,627

Opening cash and cash equivalents

5,300

 

673

 

673

Closing cash and cash equivalents

1,762

 

3,056

 

5,300

 

 

Notes

 

1.  Unaudited notes

 

Basis of preparation and accounting policies

 

The financial information for the six months to 31 May 2019 is unaudited and was approved by the Board of Directors on 12 July 2019.

 

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 2018.

 

The interim financial information for the six months ended 31 May 2019, including comparative financial information, has been prepared on the basis of the accounting policies set out in the last annual report and accounts, and in accordance with International Financial Reporting Standards ("IFRS").

 

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 2018.

 

The Group has elected to present comprehensive income in one statement.

 

Going concern assumption

 

The Group manages its cash requirements through a combination of operating cash flows and long-term borrowings in the form of non-convertible loan notes.  

 

The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within its existing cash deposits and loan facilities.

 

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. Accordingly, they continue to adopt the going concern basis of accounting in preparing the interim financial statements.

 

Information extracted from the Group's 2018 Annual Report

 

The financial figures for the year ended 30 November 2018, 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 2018 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.  Earnings per share

 

The calculation of earnings per share is based upon the loss after tax for the respective period, for continuing operations only. 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 are anti-dilutive due to the Group being in a loss-making position, so the weighted average number of ordinary shares used in the calculation of diluted earnings per share is the same as for basic earnings per share.

 

This has been computed as follows:

 

 

 

 

 

6 months ended

 

Restated

6 months ended

 

Restated

6 months ended

 

 

Year

ended

 

 

31-May-19

31-May-19

31-May-18

31-May-18

30-Nov-18

30-Nov-18

 

 

Basic

 

Diluted

 

Basic

 

Diluted

 

Basic

 

Diluted

Continuing and discontinued operations

 

 

 

 

 

 

Loss after tax (£'000)

(1,441)

(1,441)

(1,059)

(1,059)

(1,510)

(1,510)

Number of shares ('000)*

63,945

63,945

40,212

40,212

45,523

45,523

Loss per share (pence)

(2.25)

(2.25)

(2.63)

(2.63)

(3.32)

(3.32)

 

 

Basic

 

Diluted

 

Basic

 

Diluted

 

Basic

 

Diluted

Continuing operations

 

 

 

 

 

 

Loss after tax

(£'000)

(1,441)

(1,441)

(939)

(939)

(1,355)

(1,355)

Number of shares ('000)

63,945

63,945

40,212

40,212

45,523

45,523

Loss per share (pence)

(2.25)

(2.25)

(2.34)

(2.34)

(2.98)

(2.98)

 

* 31 May 2018 earnings per share information has been restated to reflect the one-for-ten share consolidation completed in November 2018.

 

 

3.  Events after the Balance Sheet date

 

On 8 July 2019, the Group entered into an agreement for a new leasehold property for a term of 10 years with an option to determine the lease after five years. It has also served notice on its existing leasehold property.

 

 

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 Longbow House, 20 Chiswell Street, London EC1Y 4TW and on the Company's website: www.accessintelligence.com.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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