Trading Update

Access Intelligence PLC

22 June 2023

 

22 June 2023

ACCESS INTELLIGENCE PLC

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

TRADING UPDATE

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 an update on trading for the six months ended 31 May 2023.

The Group has made 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 expects to report ARR growth of £1.4m in the period¹, demonstrating a significant increase in momentum in ARR growth across the Group when compared to ARR growth of £0.5m in H1 2022¹. Each individual region contributed to the ARR growth during the first half.

ARR	FY22	H1 23	Change in ARR
EMEA & North America (Constant Currency)	£29.4m	£30.5m	+£1.1m
EMEA & North America (Reported)	£29.4m	£30.5m	+£1.1m
APAC (Constant Currency)	£29.0m	£29.3m	+£0.3m
APAC (Reported)	£30.6m	£29.3m	-£1.3m
Group (Constant Currency)	£58.4m	£59.8m	+£1.4m
Group (Reported)	£60.0m	£59.8m	-£0.2m

·    The Board anticipates total revenue for the period to be not less than £31.3m, compared to £32.7m in H1 2022¹ with 95% of the Group revenue being recurring (H1 2022: 93%).

·    Adjusted EBITDA is anticipated to be not less than £2.0m for the period, a year-on-year increase of £1.7m¹.

·    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.

Continued growth in EMEA & North America

In EMEA and North America the Group has continued to grow, delivering an increase in ARR of £1.1m¹ in the period, similar to the first half of the prior year. 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.

EMEA & North America revenue has increased by £1.0m compared to the prior year comparative period due to ongoing ARR growth in the region. Regional adjusted EBITDA has also improved due to the year-on-year revenue growth alongside cost optimisation initiatives.

New client wins in EMEA include: the British Fashion Council, Carnival, the Delegation of the European Union to the United Kingdom, Dentsu, the English Football League, HM Land Registry, The Insolvency Service, Iris Worldwide, Matalan, Mayborn Group, 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.

As previously announced, a significant contract worth £0.5m per annum has been won in North America with a customer seeking to use the Company's technology to obtain greater insights into its local and global communications strategy. Other important wins in North America include Basis Technologies, Havas, Legendary, McCann, and a partnership with Reddit to deliver strategic research to be presented at Cannes 2023 Festival of Creativity this week.

First ARR growth delivered in APAC

In APAC there has been positive momentum with the region delivering ARR growth of £0.3m¹ in the period, ahead of the full release of the Group's next generation platform into the market expected in the next few months. In the first half of the prior year, ARR had declined by £0.7m¹. 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.

Overall, APAC revenue has declined by £2.3m compared to the prior year comparative period 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. Non-recurring revenue comprises 8% of total APAC revenue (H1 2022: 10%) and has been lower in FY23 due to customers running fewer one-off campaigns given wider macro-economic conditions. Adjusted EBITDA in the region has increased year on year however as a result of synergies and other cost optimisation initiatives delivered.

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

The Group's cash balance at the period end was £2.7m with the Board focussed on delivering positive cash flow in the second half through improved profitability and working capital enhancement due to a change in the Group's invoicing profile. Management continuously seeks to optimise the Group's operational structure to provide a stable and profitable platform from which to grow in all serviced global regions. This has been supported by the Group delivering substantial synergies as part of the integration of Isentia into the Group alongside other cost reduction initiatives.

The board looks forward to updating shareholders further with interim results in July.

Christopher Satterthwaite, Non-Executive Chairman of Access Intelligence, commented:

"As anticipated, the first half of the year has seen Access Intelligence deliver a significant increase in ARR growth¹, coming from all global regions and with the first period of ARR growth in APAC since the acquisition of Isentia.

With the Group's next generation platform being released into the APAC market during Q3 2023, there is a considerable opportunity for the Group to accelerate growth as both existing and potential customers in the region are able to benefit from Access Intelligence's market leading technology. In EMEA and North America, growth has continued with a focus on signing up new customers to take a wider range of the Group's product offering at higher average order values.

The Board remains focussed on the delivery of improved profitability and cash generation with a number of cost optimisation initiatives delivered to date and with further focus on this during the remainder of the financial year.

Overall, the Board remains confident in the outlook for the Group in the second half of the year and beyond."

^1.  On a constant currency basis

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

 

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