TIDMACSO
RNS Number : 5245F
Accesso Technology Group PLC
22 March 2022
22 March 2022
accesso (R) Technology Group plc
("accesso" or the "Group")
PRELIMINARY RESULTS FOR THE YEARED 31 DECEMBER 2021
Record revenue and profit as technology demand surges in our
industry
accesso Technology Group plc (AIM: ACSO), the premier technology
solutions provider to leisure, entertainment and cultural markets,
today announces preliminary results for the year ended 31 December
2021 ('2021').
Commenting on the results, Steve Brown, Chief Executive Officer
of accesso, said:
"Accesso's performance during 2021 was simply outstanding. We
delivered record revenue and record profit during another
challenging year in our end markets as they continued to recover at
varying levels through the year.
Our confidence in our future growth trajectory has never been
stronger as we recognise the significant uptick in demand for
technology across all leisure sectors. Digital solutions are now an
operational necessity as consumers expect a mobile-first experience
in every aspect of their lives. Operators are also increasingly
looking to gain efficiency, reduce labour expenses and optimise
revenue via digital transformation. With our strong and
well-established range of mobile-centric solutions across
ticketing, virtual queueing, guest experience and personalisation,
we believe we are the best platform available for any venue
operator as evidenced by our remarkable success in 2021 and the
shape of our new business pipeline for the year ahead.
In the near term, we'll invest squarely behind this increased
level of demand to secure the long-term, repeatable revenue during
the crucial adoption phase. We will also see a welcome return to
more normal operations and full staffing levels which will support
the growing demand for our solutions and allow for continued
innovation."
2021 Financial highlights
2021 2020 Vs 2020 2019 (4) Vs 2019
$000 $000 $000
------------------------- -------------- --------- -------- -------------- ----------
Revenue 124,794 56,094 122.5% 117,182 6.5%
-------------- --------- -------- -------------- ----------
Cash EBITDA (1) 28,138 (11,450) 345.7% 7,141 294.0%
-------------- --------- -------- -------------- ----------
Statutory profit/(loss)
before tax 12,110 (32,862) 136.9% (57,581) 121.0%
-------------- --------- -------- -------------- ----------
Net cash (2) 64,050 29,656 116.0% 354 17,993.2%
-------------- --------- -------- -------------- ----------
Adjusted basic
EPS (cents) (3) 61.10 (60.64) 200.8% 30.78 98.5%
-------------- --------- -------- -------------- ----------
Basic earnings
per share (cents) 53.39 (84.78) 163.0% (184.26) 129.0%
-------------- --------- -------- -------------- ----------
Footnotes:
(1) Cash EBITDA: operating profit before the deduction of amortisation,
depreciation, acquisition costs, deferred and contingent consideration
linked to continued employment, and costs related to share-based
payments less capitalised development costs paid in cash as
per the consolidated cash flow statement (see reconciliation
in financial review).
(2) Net cash is calculated as cash and cash equivalents less borrowings
(see reconciliation in financial review).
(3) Adjusted basic earnings per share is calculated after adjusting
operating profit for impairment of intangible assets, amortisation
on acquired intangibles, deferred and contingent consideration
linked to continued employment, acquisition and aborted sale
expenses and share-based payments, net of tax at the effective
rate for the period on the taxable adjusted items (see note
9).
(4) 2019 is included as a comparative period due to the exceptional
impact of COVID-19 on the 2020 results, representing a period
without disruption from COVID-19.
-- Revenue of $124.8m represents a Group record and was up 6.5%
compared to our pre-pandemic 2019 level despite COVID-19 related
interruption in certain markets during the year. This included
closures in certain geographies and parks not yet returned to
full capacity. Live entertainment encountered significant disruption
and is now demonstrating a recovery in the first few months of
2022. Our result was significantly ahead of our initial 2021
guidance.
-- Cash EBITDA (1) was a record $28.1m for the year, 294.0% greater
than the $7.1m in 2019. This was driven by 6.5% revenue growth
at a higher gross margin due to changes in the product mix; improved
productivity from the structural realignments implemented during
2020; and a challenging recruitment environment which impacted
our ability to hire at our desired pace and resulted in depressed
staff costs even as our revenue rapidly recovered. We are now
fully staffed, however new positions will be opened as we continue
to invest in our product and also support securing the long-term,
repeatable revenue opportunities given this increased demand
for our solutions.
-- Statutory profit before tax of $12.1m was enabled by the Group's
strong cash EBITDA performance. The measure further benefits
from acquisition related amortisation, development cost amortisation
and impairments reducing by $5.0m relative to 2020 and the reversal
of intangible impairments of $1.7m from 2019. Whilst not at the
same level, we anticipate further amortisation savings in the
near term in the absence of any acquisition activity.
-- Net Cash (2) was $64.1m at the year-end, up $34.4m on 2020,
reflecting a very strong year of cash generation. Cash EBITDA
of $28.1m was the key driver, along with our continued focus
on strong working capital management. We move into 2022 with
significant surplus cash on hand to invest in growth, no debt
and access to undrawn debt facilities.
-- Adjusted Basic EPS (3) of 61.10 cents per share represents the
best in the Group's history and is driven by our record profitability.
Our EPS measures have benefited from a credit of $12.6m of prior
year US tax losses and tax credits, unrecognised in 2020, being
recognised in 2021 due to the Group's profit in the period and
its ability to forecast consistent profitability.
2021 Operational & Strategic Highlights
-- Capitalising on substantial demand: We are capturing surging
demand in our markets. In total we signed 50 new venues and 64
eCommerce deals in 2021. Customers are also extending our agreements,
with 21 of our accesso Passport(R) customers renewing their contracts
in 2021.
-- Increased utilisation of our solutions: The Group delivered
record volumes during the year with accesso Passport processing
96.1 million tickets and reservations, a 69.4% increase in volume
relative to 2019. Our accesso LoQueue(R) solution delivered a
73.5% increase in guest conversion relative to 2019, with 5.9%
of park guests purchasing an accesso LoQueue product compared
to 3.4% in 2019, despite a 27.7% reduction in park attendances
levels relative to 2019 on a like-for-like basis.
-- Innovation driving further success: Record virtual queuing performance
with significant adoption at Six Flags Entertainment Corporation
("Six Flags") of our Qsmart solution with a further nine deployments
at their venues. We won 21 combination customers with our complementary
solutions in 2021, well ahead of any other prior year in the
Group's history. The cross-sell between accesso Passport and
accesso Siriusware(SM) was particularly strong in 2021. New services
like The Experience Engine(TM) (TE2) Food & Beverage capabilities
are also gaining traction. Pre-sales for accesso Passport end-to-end
solution began in 2021.
-- Industry focus driving increased success: We have seen strong
demand in ski areas, with 78% of our accesso Passport renewals
in 2021 coming from our ski customers. Reduced restrictions on
outdoor activities saw some of our North American ski customers
open for the full season in 2021, boosting our results with some
of their best trading years.
-- Strategic enterprise-wide contract renewals completed in December
2021: Extended partnerships with Merlin Attractions Operations
Ltd. ("Merlin"), and Six Flags, demonstrate that accesso has
adapted effectively and continues to provide valuable support
to our client base.
2022 Outlook & Guidance
-- Strong start to 2022: Our trading volumes for January and February
are encouraging with accesso Passport ticket volume for North
American double that of 2019 as we begin to benefit from a significant
number of customers onboarded during the past 2 years and increasing
customer appetite for a leading-edge eCommerce solution. The
removal of COVID-19 restrictions in many parts of the world has
had a positive impact, particularly on our live entertainment
business, and we expect our product mix and gross margin to be
more consistent with pre-COVID levels in 2022. Whilst we remain
cognisant of the relatively early stage in the year, the impact
of tiered pricing at higher volumes and revised terms related
to enterprise renewals, we are cautiously optimistic about another
year of good progress.
-- Expected increases to cost base: The number of open positions
at the beginning of 2022 is significantly less than the same
period last year. As previously communicated, this, combined
with the overall industry pressure on wages, is expected to result
in an increase in our cost base as we return to normal staffing
levels.
-- Continued build of cash reserves: We expect another cash generative
year, building on top of a year-end cash balance in excess of
$60m.
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 1300
UK time today. Analysts and institutional investors are also able
to request a copy of the presentation and audio webcast conference
details by contacting accesso@fticonsulting.com. A copy of the
presentation made to analysts will be available for download from
the Group's website, shortly after the conclusion of the
meeting.
accesso Technology Group plc
Steve Brown, Chief Executive Officer
Fern MacDonald, Chief Financial Officer +44 (0)118 934 7400
Numis Securities Limited (Nominated Adviser
and Sole Broker)
Simon Willis, Hugo Rubinstein +44 (0)20 7260 1000
FTI Consulting, LLP
Matt Dixon, Adam Davidson +44 (0)20 3727 1000
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 1,000 clients in 29
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. 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.
COVID-19 has highlighted the benefits our technology is able to
bring to venues from facilitating social distancing using our
robust and sophisticated virtual queuing solutions; reservation
systems delivered through our agile eCommerce platform to enable
capacity management, taking queues away from front gates; and
attraction eateries utilising our contactless food and beverage
offerings.
Many of our team members come from backgrounds working within
the attractions and cultural industry. 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. Our staff understand the day-to-day operations of
managing complex venues and the challenges this creates, and
together we strive to provide our clients and their guests with
technology that empowers them to do more and enjoy more. 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 Twitter , LinkedIn and Facebook
.
***
Chief Executive's statement
I am thrilled with accesso's performance in 2021. We worked hard
to stay resilient through the pandemic's most severe impacts on our
industry and we have emerged stronger than ever. I continue to be
inspired by the optimism, creativity and dedication of our team,
which has outperformed my expectations through the year. To the
entire accesso organisation, I offer my deep thanks for a job well
done.
Reflecting on our performance, I am proud of the difficult
decisions we made early in the pandemic to reshape and redirect our
operation to prepare accesso for a more successful future. This
process wasn't always easy for the team, but it was necessary, and
we are now seeing the results. We made a concerted effort to
refocus our business to operate with higher value output while
focusing more directly on the needs of our end markets.
Furthermore, with early signs of increasing demand, we allocated
resources to handle the rising utilisation of our solutions by
existing customers and to capture the sales pipeline demand from
new ones.
We are now operating a more purpose-driven operational platform
with less duplication, more accountability and with resources
deployed more effectively for growth. For example, we have a
unified group of engineers working solely on eCommerce across the
Group, and we have operational teams dedicated to driving growth in
increasingly important segments of our market like the ski
industry. Overall, we are more efficient, more targeted, and more
productive. The adjustments we've made are paying off, and the
evidence is clear in our financial results.
In terms of pandemic recovery, the theme park, water park and
ski sectors began a fairly robust rebound across the year, with
attendance levels toward year end approaching 2019 levels. However,
the significant Live Entertainment segment of our business remained
challenged for much of the year. Activity from theatres, fairs and
festivals in the US and Canada reached 2019 levels mid-year,
however in our key UK market the recovery pace was slower and was
significantly affected by the Omicron variant in December. Despite
the mixed pace of recovery across the segments we service, we
delivered revenue growth of 6.5% on our 2019 level. Propelled by
significantly higher technology utilisation in the theme park
sector and the benefit from a significant number of new customers
as well as compelling growth within ski sectors, we exceeded
pre-pandemic revenues even with significantly impacted volumes from
our live entertainment focused solutions.
The significantly higher utilisation of our solutions by both
venue operators and their visitors is a clear indication that the
relationship with technology in our end markets has undergone a
fundamental change. Bearing in mind, a significant portion of our
revenue is transaction based and we are confident this new level of
engagement with our technologies is here to stay. Many guests who
before purchased tickets at the front entry or food at the
restaurant counter are now mobile users. Guests that previously
utilised our virtual queuing solution via a wearable device are now
doing so via their smartphone. Operators have seen our technology
transform the quality of their experience, deliver greatly enhanced
revenues, and lower their operating costs. They are never going
back.
With the market coming towards us and our business ready to
grasp the opportunity, now is the time to push forward to maintain
our leadership position in the marketplace and go for growth. We
need to continue scaling accesso to capture the full opportunity we
see ahead of us, and that means continuing to invest in
results-focused product innovation, sales teams, our support
operation and our broader team behind all of them. As we do this
and lean into this newfound level of demand, we expect revenue
growth to continue. We'll also remain a more profitable business
than we were before the pandemic as our development efforts are
closely correlated to targeted, measurable results.
My confidence in the outlook for accesso is reinforced by the
start we have made to 2022. We begin the year having renewed and
expanded important customer relationships with Merlin and Six
Flags, and with a robust sales pipeline. Overall, we have entered
the new year with our team aligned behind our plan and a high
demand for our solutions across the marketplace. With a strong cash
balance and zero debt, accesso has never been better positioned for
the future. We're relishing the task of delivering another strong
year of results in 2022.
2021 in review
Innovation driving technology adoption
Our end-markets saw a strong recovery through 2021 as most
large-scale visitor attractions, including theme parks, museums,
and ski resorts moved towards pre-pandemic attendance slightly
earlier than we had anticipated. Many of these used accesso
solutions to facilitate their re-openings by leveraging accesso's
reservations functionality to manage capacities and requiring all
visitors to pre-purchase tickets online; our transaction-based
model benefited from this increased utilisation. Whether through
virtual queueing, online ticketing, contactless payments, or other
in-venue purchasing, accesso has enabled operators to digitise
their interactions with guests more than ever before. Although
portions of this activity are not expected to repeat as operations
continue to normalise, the overall step-function increase in online
buying and mobile-first approach from operators is here to
stay.
During 2021 we saw our Virtual Queueing offerings gain
increasing traction in the marketplace. Key operators continued to
increase their queuing footprint with us, with Six Flags deploying
our Qsmart mobile service to nine parks, allowing visitors to
purchase and utilise the service from their own device versus
obtaining a wearable band at the park. Our virtual queuing
strategic priority is to migrate all customers to our Qsmart mobile
capabilities and limit use of the accesso Prism wearable device to
situations like waterparks where they are more necessary. Allowing
the visitor to subscribe to the service via their own smartphone at
any point of their visit, from anywhere in the venue is a game
changer in terms of sales penetration and operational efficiency
via reduced labour.
We saw six new queuing implementations in 2021, alongside 3
million rides enabled in our two 100% virtual queuing properties.
Another venue, Parc Asterix in France, has taken on Qsmart as a
premium service after having adopted 100% virtual queuing on a
temporary basis through the pandemic. Palace Entertainment upgraded
to our accesso Prism wearable solution in two waterparks. Zoombezi
Bay, a large waterpark in Ohio, also upgraded to accesso Prism.
Our accesso Passport ecommerce solution saw volumes up 69.4% in
the year relative to 2019, with 96.1 million tickets and
reservations sold online against 35.1 million in 2020 and 56.7
million in 2019. Crucially, 66.0% of the volume was sold via
mobile. With capacity restrictions still in place for many venues,
reservations became an essential component of capacity management
for guests with Season Passes or Memberships, resulting in 20.4
million reservations in 2021 compared to just 3.6 million in 2020.
We do expect the number of reservations in our system to fall back
somewhat as mandated capacity limitations recede, however the rapid
growth in reservations is an important proof-point for the
adaptability and flexibility of our platform when it comes to the
rapid deployment of innovation to support new customer paradigms.
We have also observed some customers maintaining reservation
requirements well beyond the regulatory capacity limitation period
to continue the improved efficiency and operational success they
realised during the restrictive period.
After a difficult 2020 related to the near-total shutdown of
London's West End theatre market, this year we saw a gradual
recovery in volumes for Ingresso, most notably towards the end of
H2. This positive trajectory was interrupted by the emergence of
the Omicron variant in December which resulted in significant
refund activity. In the background as we awaited the recovery
period for Ingresso, efforts continued to expand distribution
opportunities and prepare to capture the uptick in demand as the
theatre business returns. Beyond theatre, we have worked hard to
integrate Ingresso more broadly into our portfolio to diversify its
inventory offering. In the year, Ingresso signed up 15 new
distributors and 54 new suppliers, bringing the totals to 88 and
436 respectively. We are also realising significant adoption of our
Ingresso distribution platform by accesso Passport customers,
resulting in nearly 1.4 million tickets sold in 2021.
Another major part of our innovation story has been our new TE2
Food and Beverage capability, which has continued to gain traction
with our customers as well as notable interest across our end
markets. Shifting Food and Beverage order-taking to a self-service
model has become a key priority as operators look to capture
maximum in-venue spending and operate with less labour. Operators
have reported double digit percentage increases in guest check size
when ordering via their mobile device versus placing the order with
an attendant. With the majority of major Food and Beverage systems
built for operation by an attendant, mobile capabilities, and
particularly those with the unique features needed by venue
operators like theme parks and ski resorts, are limited. Due to
accesso's long-standing expertise in high-volume online ordering
and revenue optimisation, we are well-positioned in this newly
emerging space.
Capitalising on substantial demand
Importantly, alongside a recovery in normal trading, we have
seen higher-than-anticipated demand in our sales pipeline driven by
an acceleration in the shift to mobile commerce resulting from the
broader realignment of consumer behaviour through the pandemic. The
action we have been taking to capture this increased demand has
enabled us to secure 50 new venues and 64 eCommerce deals in 2021.
But winning customers is only part of the story. We have also
proven ourselves supportive, trustworthy and innovative partners to
our existing base and our relentless focus on customer success has
seen us renew 21 of our accesso Passport customers in 2021
including our global agreement with Merlin as well as the
continuation of our agreement with Six Flags where they opted not
to exercise their early termination rights.
Success with joint solution deployments
Over the past year we continued our strategy to deliver
innovative solutions that encourage cross-selling across our
product set. We are already seeing customer demand for this
improvement coming through, with 20 of our 21 combination clients
in the year adding accesso Passport to accesso Siriusware. These 21
combination wins take on real significance when set against the 39
total combination wins for the business prior to last year. This is
a clear area of focus for the business and one with significant
traction.
With the increasing number of customers utilising accesso
Passport eCommerce alongside accesso Siriusware, we prioritised and
invested in improvements in the connectivity between these two
systems. With a new, more robust API Gateway, we dramatically
increased data throughput between the systems which is
significantly improving operational performance and reliability. We
also developed a product catalogue synchronisation process allowing
product/ticket setup data from accesso Siriusware to be passed to
the accesso Passport without manually re-keying the information for
each item.
Looking ahead, we are now in the process of integrating
CyberSource into the accesso Siriusware point-of-sale system, with
release scheduled for Spring 2022. This added functionality will
allow combination clients to access consolidated credit card
processing and management in one platform.
Industry focus driving increased success
A significant portion of the integration between our products is
happening in our ski Industry customer base, where we have a
substantial strategic focus. Our performance in this area was
strong during 2021, benefiting from the fact that outdoor
activities remained, relatively speaking, open to the public in the
last year. Of the 75.7 million tickets sold through our accesso
Passport eCommerce platform during 2021, 3.0 million were derived
from our ski customers, up from 1.1 million in 2020.
The ski market delivered 78% of the Group's accesso Passport
customer renewals during the year, and around 30% of our ski
clients utilise accesso Passport and accesso Siriusware together.
Many of our ski clients also upgraded to accesso Siriusware 5.0
during 2021, with a good pipeline for continued upgrades building
into 2022.
Technology, operational and security infrastructure
We continue to invest in technology improvements across our
product set to ensure our customers have the highest-quality
offerings to meet their needs. We are evolving our accesso Passport
platform, making significant progress on the 2022 project to bring
updated web standards to our user interface and refresh all the
platform's other user elements. We have also completed an initial
version of a templating tool called Passport Configurator, a
web-based tool for the rapid deployment of the accesso Passport
eCommerce application and a multitude of related services. This
will reduce the involvement of our engineering staff in new client
provisioning and empower customers to take more ownership of their
accesso Passport deployments. A new automation framework for the
efficient testing and quality assurance of our applications has
been implemented and we completed our annual IT security audit
successfully. Finally, we fully completed the migration of accesso
Passport to Amazon Web Services across all regions.
Operationally we have further consolidated internal systems used
for workflow management and source code storage and now leverage
the same solutions across the Group which enables greatly improved
communication and efficiency, whilst reducing the number of systems
to maintain and secure.
Although we do not outline the specifics of security
improvements we have made across the year, we have continued to
make significant investment to ensure our systems are protected and
secure. Measures including multi-factor authentication and those
related to remote working have been key priorities.
Our people
Through 2021 we rebuilt our workforce and re-established our
growth culture. We recruited and onboarded 177 new hires (excluding
seasonal staff) in the year and completed an engagement survey with
96% participation. Our overall score was a strong 4 out of 5, with
our COVID pandemic response score reaching an even stronger 4.4 out
of 5.
Our focus on improving employee engagement is helping us to
retain talent and reduce turnover in the highly competitive market.
With our engagement survey results in hand, we have addressed ideas
and concerns raised by the team across a variety of areas including
health benefits, compensation and working environment.
Our efforts to boost the diversity and inclusion within our
accesso team also continued strongly, with unconscious bias
training rolling out globally and the kick-off of a partnership
with the US National Diversity Council to assist in developing our
Diversity, Equity and Inclusion plan and goals for the future. We
remain an organisation totally committed to helping our people
flourish and look forward to building on our credentials in this
area in the years to come.
As pandemic restrictions are pared back, we are eager to help
our people to maintain the elements of the new ways of working that
enable and motivate them. As a result, mid-year we shifted to a
Global Remote Working policy allowing the option for our team to
select to work fully from home or split their time between a local
office and home. Whilst we continue to operate at remote status for
the majority of our team, we expect to reopen offices in the first
half of 2022 and welcome more staff back into our offices. We also
placed significant focus on the new cultural dynamics faced as a
result of remote working and initiated a range of remote based
employee activities. As part of this initiative, we welcomed
numerous guests across the year to virtually share their
experiences and insights as part of our accesso Speaker Series
including experts on creativity, diversity & inclusion and
radical product thinking. At the start of 2021, we set a Group goal
to realize turnover of less than 20%; we reached this goal with a
turnover rate of 18% on the year.
Outlook and guidance
accesso has made a strong start to the 2022 financial year, with
trading volumes in January and February providing an encouraging
basis for this year's performance. In North America, our accesso
Passport ticket volumes were double what we saw in the first two
months 2019. This robust performance continues to be supported by
the removal of COVID-19 restrictions across the world as well as
the benefit from a significant number of customers onboarded during
the past 2 years and increasing customer appetite for a
leading-edge eCommerce solution. Markets segments which have been
slower to recover, like Live Entertainment, are now ramping up, and
we expect our product mix to be more consistent with pre-COVID
levels in 2022. Whilst we remain cognisant of the relatively early
stage in the year, the impact of tiered pricing at higher volumes
and revised terms related to enterprise renewals, we are cautiously
optimistic about another record revenue year.
As we work to capture high levels of demand we are scaling our
workforce back to normal levels. At the outset of 2022 we have
filled most of the positions we had outstanding in 2021, and as
previously communicated, the overall upward industry pressure on
wages is expected to result in an increase in our cost base as we
return to normal staffing levels.
With continued growth in revenue, we expect to deliver another
cash generative year, building on top of a year-end cash balance in
excess of $60m.
Steve Brown
Chief Executive Officer
21 March 2022
Financial review
Commenting on the results, Fern MacDonald, Chief Financial
Officer of accesso, said:
"We are extremely proud of our final results with 2021
representing a landmark year for accesso as we delivered record
performance across all our key metrics. We move into 2022 with a
strong balance sheet, a motivated team and a hugely exciting market
opportunity. The technology-based solutions for ticketing, virtual
queuing and food & beverage provided by accesso are now firmly
the expectation of consumers across our key markets."
Financial overview
During 2021 the Group delivered a record financial performance
in all key metrics as COVID-19 restrictions eased in our markets.
Both revenue and cash EBITDA performance were well ahead of our
initial expectations.
Our customer venues began to reopen at full scale during the
early parts of 2021. As a result, we benefited from high consumer
demand and a continued shift to purchasing in advance and online
through our platforms. The deep customer relationships built
throughout the pandemic enabled us to hit the ground running during
2021 and capture the significant uptick in demand for our
products.
The cost actions and structural realignment undertaken during
2020 enabled the Group to be more operationally effective whilst
driving higher levels of profitability and cash generation. During
2021 the Group had a number of open positions but made excellent
progress in the year towards filling these positions in a difficult
market. Headcount did not scale as quickly as our revenue activity
due to a highly competitive job market and our selective approach
to hiring. This benefited cash EBITDA for the year and staff costs
will increase in 2022 as we see the full year impact of those hires
as well as continuing the investment in our workforce to drive
growth.
We have largely assessed the performance of 2021 against 2019
due to the impact of the pandemic on 2020. Whilst we provide 2020
comparators in the tables presented below, we draw more meaningful
and valuable analysis against 2019.
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
to be more 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. These adjustments include aborted
acquisition or aborted sale related expenses, amortisation related
to acquired intangibles, deferred and contingent consideration
linked to continued employment, share-based payments and
impairments.
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 costs, deferred and contingent consideration linked
to continued employment, and costs related to share-based payments
and paid capitalised internal development costs;
-- Adjusted basic earnings per share is calculated after adjusting
operating profit for impairment of intangible assets, amortisation
on acquired intangibles, deferred and contingent consideration
linked to continued employment, acquisition and aborted sale
expenses 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;
-- Underlying administrative expenses which is 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, deferred
and contingent payments, and costs related to share-based payments.
This measure is to identify and trend the underlying administrative
cost before these items; and
-- Repeatable revenue consists of transactional revenue from Virtual
Queuing, Ticketing and eCommerce and is defined as revenue earned
as either a fixed amount per sale of an item, such as a ticket
sold by a customer or as a percentage of revenue generated by
a venue operator. Normally this revenue is repeatable where a
multi-year agreement exists and purchasing patterns by venue
guests do not significantly change. Other repeatable revenue
is defined as revenue, excluding transactional revenue, that
is expected to be earned through each year of a customer's agreement,
without the need for additional sales activity, such as maintenance
and support revenue. Non-repeatable revenue is revenue that occurs
one-time (e.g., up-front licence fees) or is not repeatable based
upon the current agreement (e.g., billable professional services
hours) and is unlikely to be repeatable without additional successful
sales execution by accesso. Other revenue consists of hardware
sales and other revenue that may or may not be repeatable with
limited sales activity if customer behaviour remains consistent.
The Group considers cash EBITDA, which disregards any benefit to
the income statement of capitalised development expenditure, as the
principal operating metric.
Key Financial Metrics
Revenue
Group revenue of $124.8m (2020: $56.1m; 2019 $117.2m) represents
a record for the Company and 6.5% growth on 2019 despite COVID-19
related interruption in certain markets during the year. Throughout
2021 we have seen customers increasingly engaged with utilising our
technologies to address challenges such as capacity restrictions,
physical queues and difficulties in securing staff. 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 expectation of consumers across our key markets. 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:
2021 2020 2019 Vs 2019
$000 $000 $000 %
Ticketing 65,877 36,603 58,237 13.1
Distribution 10,053 1,363 21,097 (52.3)
-------- ------- -------------- --------
Ticketing and distribution 75,930 37,966 79,334 (4.3)
-------- ------- -------------- --------
Queuing 32,888 8,348 25,208 30.5
Other guest experience 15,976 9,780 12,640 26.4
-------- ------- -------------- --------
Guest experience 48,864 18,128 37,848 29.1
-------- ------- -------------- --------
Total revenue 124,794 56,094 117,182 6.5
======== ======= ============== ========
Ticketing and Distribution revenue was 4.3% down on 2019,
despite a 13.1% increase in ticketing, due to revenue reductions
experienced in the lower margin distribution business. The
distribution business continues to be largely dependent on the UK
theatre sector and was significantly impacted by mandated
restrictions and disruption throughout the first 6 months of the
year and in December 2021. As a result, revenues were down 52.3% on
2019. Ticketing delivered an excellent performance due to the
Group's accesso Passport eCommerce solution, a high margin
transactional revenue stream which delivered 41.5% revenue growth
on 2019.
During 2021 the Group went live with 64 new eCommerce ticketing
clients compared to 37 during 2020. We continue to identify a shift
in consumer and attraction behaviour towards pushing 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.
Guest Experience delivered revenue growth of 29.1% on 2019. Our
accesso LoQueue solution's transactional-based queuing products saw
a period of significant demand despite park attendance being 27.7%
down on comparable parks in 2019 due to COVID-19 related disruption
to opening schedules and capacity restrictions at certain points
during the year. Park guests purchasing an accesso LoQueue product
at venues increased to 5.9% compared with 3.4% in 2019. Consumer
appetite for virtual queuing has increased significantly and this
has been further enabled by our Qsmart web-based virtual queuing
app helping to drive customer penetration and basket size. During
2021 we implemented our Qsmart technology across a further 10 theme
park venues with 84.2% of the parks we serve now using our
web-based virtual queuing app. During 2021 we saw record
transactional queuing volumes, several successful pilots for
virtual queuing solutions, significant enhancement to existing
customers' virtual queuing offerings and implementations at non
theme park attractions. This demonstrates that both our customers
and end consumers are embracing accesso technology. The Experience
Engine business delivered a solid performance, with revenues up
25.6% on 2019 due to continued confidence in the bespoke
professional services offerings, with large customers in the ski,
theme park and cruise ship markets using our services.
Revenue on a geographic and segmental basis was as follows:
2021 2020 2019
Primary Ticketing Ticketing Ticketing
geographic and Guest and Guest and Guest
markets Distribution Experience Group Distribution Experience Group Distribution Experience Group
$000 $000 $000 $000 $000 $000 $000 $000 $000
UK 14,939 2,179 17,118 4,380 848 5,228 25,500 2,047 27,547
Other Europe 1,443 1,808 3,251 1,177 649 1,826 1,859 2,185 4,044
Australia/South
Pacific/Asia 3,219 1,318 4,537 1,663 750 2,413 2,942 768 3,710
USA and Canada 55,344 43,338 98,682 30,014 15,739 45,753 45,987 32,668 78,655
Central and
South America 985 221 1,206 732 142 874 3,046 180 3,226
------------- ----------- -------- ------------- ----------- ------- ------------- ----------- --------
75,930 48,864 124,794 37,966 18,128 56,094 79,334 37,848 117,182
============= =========== ======== ============= =========== ======= ============= =========== ========
Our USA and Canadian based customers delivered a 25.5% increase
in revenues on 2019 with excellent performance across multiple
market verticals, despite attractions in the state of California
being shuttered through April 2021. The exception to this strong
performance was live entertainment which continues to recover
toward pre pandemic revenue levels.
Selling our eCommerce accesso Passport solution into the USA and
Canadian ski market continues to be one of the Group's medium-term
strategic priorities. In 2021, 16 customers adopted eCommerce in
this market to excellent mutual benefit, helping to drive
incremental revenues to our Ticketing and Distribution segment. At
31 December 2021 approximately one third of our ski customers also
use accesso Passport.
Despite a difficult start to 2021, our live entertainment
customers in the USA have shown encouraging volumes from June 2021
onwards, finishing the year 24.5% behind 2019. This was largely due
to disrupted trading during the first half of the year. We also
went live with 28 accesso ShoWare(SM) new customers during 2021
(29: 2020).
In the UK, outdoor attractions reopened from April 2021 and
demonstrated encouraging transactional volumes for the year. Live
entertainment remained closed for the majority of the first half of
2021, opening with partial capacities from May 2021 and then at
full capacities from July 2021, delivering encouraging volumes
through November. The key month of December for UK based live
entertainment was impacted by Omicron disruption with many shows
being cancelled at short notice, these conditions resulted in a
significant revenue reduction of $11.0m compared to 2019 in our
Ingresso business. Other European countries mandated countrywide
closures during April and May 2021 while Central and South America
experienced a number of restrictions throughout the year that
significantly hampered their ability to trade, resulting in both
these regions underperforming relative to 2019.
Australia, Asia and the South Pacific was able to deliver
revenues of $4.5m, up from $3.7m in 2019. The Australian region saw
excellent performance from accesso LoQueue, accesso Passport and
TE2, despite Australia being in a state-wide lockdown from July to
October 2021. Whilst the impact was minimised due to this period
coinciding with the region's off-peak season, it significantly
impacted volumes during that 4-month period.
Revenue quality
2021 2020 2019
$000 $000 % $000 %
Virtual queuing 32,888 7,407 344.0 24,687 33.2
Ticketing and eCommerce 58,537 23,157 152.8 60,909 (3.9)
Reservation revenue 4,073 726 461.0 - 100
-------- --------- ----------------------
Transactional revenue 95,498 31,290 205.2 85,596 11.6
Maintenance and support 7,281 7,711 (5.6) 8,742 (16.7)
Platform fees 2,592 2,263 14.5 1,149 125.6
-------- --------- ----------------------
Total repeatable 105,371 41,264 155.4 95,487 10.4
-------- --------- ----------------------
Licence revenue 2,162 2,322 (6.9) 3,496 (38.2)
Professional services 13,469 9,954 35.3 14,787 (8.9)
-------- --------- ----------------------
Non-repeatable revenue 15,631 12,276 27.3 18,283 (14.5)
-------- --------- ----------------------
Hardware 2,704 1,493 81.1 2,499 8.2
Other 1,088 1,061 2.5 913 19.2
-------- --------- ----------------------
Other revenue 3,792 2,554 48.5 3,412 11.1
-------- --------- ----------------------
Total revenue 124,794 56,094 122.5 117,182 6.5
======== ========= ======================
Total repeatable
as % of total 84.4% 73.6% 81.5%
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 revenue has grown as a
percentage of overall revenue to 84.4% (2020: 73.6%, 2019: 81.5%).
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 delivered an
exceptional performance during 2021 to $95.5m, up 11.6% on a normal
period of trading represented by 2019. This was despite some
disruption across our geographies at various points of the year as
well as the continued impact of the pandemic on the live
entertainment industry globally.
Demand for ticketing eCommerce and virtual queuing products has
been extremely high during the year despite regionalised
restrictions, owing to an increased appetite for technology-based
solutions. We have also benefited from latent demand and a shift in
consumer behaviour to purchasing online. This has been welcomed by
our attraction operators as it enables them to manage and monitor
capacities, remove physical queues, reduce labour costs at payment
terminals, maximise basket size and gain deeper consumer insights.
During the year we have derived transactional revenue of $4.1m from
online reservation fees which we do not expect to recur at the same
level in future periods.
Professional services revenue performed ahead of our budget and
2020, a credit to our exceptional team which continued to deliver
excellent bespoke solutions to the ski, cruise and attractions
markets. Levels are 8.9% below the 2019 year which included some
significant custom development projects. Our platform revenues
continue to benefit from this bespoke development work whereby
professional service customers have taken up repeatable platform
fees for hosting food and beverage mobile apps. Platform revenues
grew to $2.6m, above 2019 and 2020. We have seen increased demand
for contactless technology such as our mobile food and beverage
apps which both reduce physical contact points and help our
attraction operators to remove labour costs.
The period also benefited from $2.7m of hardware sales following
a $1.4m sale of Prism 2 wristbands which helped us deliver accesso
LoQueue transactional revenue. Hardware sales also included
equipment related to the addition of 24 new implementations for
attractions utilising our accesso Siriusware point of sale
systems.
Gross margin
Management has reviewed how costs are allocated between
administrative expenses and cost of sales. In order to give a
clearer and more meaningful picture of activity within the
business, server costs linked to the delivery of revenue,
previously shown within administrative costs have been reclassified
to cost of sales in 2021.
The Group's reported gross profit margin of 77.2% is an
improvement on 73.8%% and 72.1% achieved in 2020 and 2019 when
adjusted for $1.6m and $1.2m of server costs to aid comparability
respectively. This 5.1% gross margin increase is largely a result
of the change in sales mix compared with 2019. Our lower margin
distribution business represented just 2.5% of our gross profit
compared to 5.1% in 2019 while higher margin streams such as
virtual queuing, ticketing and eCommerce, maintenance and support
and platform fees are proportionately greater. The accesso LoQueue
solution generated an improved margin of 71.6%, compared to 63.6%
in 2019, this was partly due to some labour shortages at points in
the year but more importantly a number of our larger theme park
customers adopting our virtual queuing web app, instead of our
hardware wrist device, which can be delivered at improved gross
margins.
Administrative expenses
Underlying administrative expenditure increased by 23.3% to
$69.7m on 2020 due to a combination of factors; the most
significant being the Group's headcount increasing from 458 to 513
(excluding seasonal staff). The Group recruited heavily during the
year to capture the available revenue opportunities in a highly
competitive job market where salaries have also increased
significantly in the technology sector. During 2020, the Group
implemented temporary cost reduction plans with staff working
four-day weeks, following the onset of the pandemic in April 2020,
with staff returning to full work schedules by the end of 2020.
Furthermore, we have experienced a very gradual return in the
second half of the year of typical activities such as trade shows
and business travel, albeit still at very low levels across the
whole year.
Reported administrative expenses increased 13.0% to $82.9m in
2021 but remained 6.1% lower than 2019, excluding the $53.6m
impairment of intangibles. Share-based payment costs increased on
2020 to $2.5m, reflective of key management incentive arrangements
being granted in both 2020 and 2021 and an all-other staff
share-based payment award granted in July 2021.
During the year the Group also took action to rationalise its
property leases and did not renew property leases when they expired
in San Diego, London, Sydney, Belfast, Sao Paulo and Annapolis,
resulting in a $268k reduction in property lease payments in 2021
relative to 2020. On an annual basis we expect this to save the
Group $0.5m in property lease payments.
No government assistance has been received during 2021 or
beyond.
2021 2020 2019
$000 $000 $000
Administrative expenses as reported 82,872 73,339 141,906
Capitalised development expenditure
(1) 720 2,969 21,064
Deferred equity-settled acquisition
consideration - (150) (1,416)
Amortisation related to acquired intangibles (2,371) (2,573) (11,286)
Share-based payments (2,490) (1,398) (1,845)
Amortisation and depreciation (2) (12,183) (14,664) (16,014)
Property lease payments not in administrative
expense (1) 1,408 1,622 1,451
Reversal of impairment /(impairment
of) intangibles 1,707 (2,627) (53,617)
Professional services cost (3) - - (6,723)
--------- --------- ---------
Underlying administrative expenditure 69,663 56,518 73,520
(1) See consolidated cash flow statement.
(2) This excludes acquired intangibles but includes depreciation
on right of use assets.
(3) The 2019 underlying administrative expense has been adjusted
for professional service costs incurred in the delivery
of professional services to be comparable with 2021 and
2020.
Cash EBITDA
The Group delivered record cash EBITDA for the year of $28.1m, a
$21.0m increase from $7.1m recorded in 2019. This increase is a
result of 6.5% revenue growth at higher gross margins relative to
2019, improved productivity and efficiencies and headcount recovery
lagging behind revenue recovery. The latter was made more
challenging by an extremely competitive job market in our key
regions. We have made excellent progress securing key positions
throughout 2021 and finished the year with approximately 30 open
positions.
The table below sets out a reconciliation between statutory
operating profit/(loss) and cash EBITDA:
2021 2020 2019
$000 $000 $000
Operating profit/(loss) 13,521 (30,354) (56,278)
Add: Aborted sale/acquisition expenses - 461 305
Add: Deferred equity-settled acquisition
consideration - 150 1,416
Add: Amortisation related to acquired
intangibles 2,371 2,573 11,286
Add: Share-based payments 2,490 1,398 1,845
(Deduct)/Add: (Reversal of impairment)/impairment
of intangible assets (1,707) 2,627 53,617
Add: Amortisation and depreciation (excluding
acquired intangibles) 12,183 14,664 16,014
Capitalised internal development costs
paid in cash (720) (2,969) (21,064)
---------- --------- ----------
Cash EBITDA 28,138 (11,450) 7,141
========== ========= ==========
The Group recorded an operating profit of $13.5m in 2021 (2019
operating loss: $56.3m); and adjusted basic earnings per share
increased to 61.10 cents (2020: Loss per share of 60.64 cents;
2019: earnings per share of 30.78 cents).
Development expenditure
2021 2020 2019
$000 $000 $000
Total development expenditure 34,666 21,157 33,545
% of total revenue 27.8% 37.7% 28.6%
------- ------- -------
Our engineering and product teams were reorganised at the end of
2020 into two teams serving all our products, spanning the
operating segments of the business. This reorganisation is enabling
us to cross-pollinate best practice, drive innovation, and take our
product integration to the next level. Therefore, we no longer
present development expenditure by segment as the information is no
longer relevant. 2021 has been a tremendous period of innovation
for accesso, with frontline and technical teams working at pace to
deliver solutions to enable our customers to manage capacities,
capture the uptick in demand for technology-based solutions to
ticketing, eCommerce, distribution, queuing and mobile food and
beverage purchasing. Our total development expenditure for 2021
increased to $34.7m, 39.0% higher than 2020 due to the impact of
4-day working weeks and furloughs in 2020 in response to the
pandemic. The 3.3% increase relative to 2019, a more typical
period, is reflective of the business driving towards full staff
levels as revenues recover combined with the significant wage
pressure over the past 2 years.
The Group capitalises elements of development expenditure where
it is appropriate and in accordance with IAS 38 Intangible Assets.
Capitalised development expenditure of $0.7m (2020: $3.0m),
representing 2.1% (2020: 14.0%) of total development expenditure.
This decrease in the proportion of development expenditure being
capitalised is not a reflection of lesser importance of the work
being undertaken, it has been 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 period has increased to $64.1m from
31 December 2020.
2021 2020
$000 $000
------- ---------
Borrowings (including capitalised finance
costs) - (26,699)
Less: Cash in hand & at bank 64,050 56,355
Net cash 64,050 29,656
------- ---------
This strong net cash position has benefited from net cash inflow
operating activities of $39.1m (2020 Net outflow of $14.5m)
delivered by a period of exceptional revenue performance in our
high margin accesso Passport and accesso LoQueue business and
diligent working capital management.
The Group's 31 December 2020 year-end drawn borrowing facility
of $26.7m was settled on 19 March 2021 following a successful
refinancing of its lending facilities with Investec Bank plc at a
total cost of $0.7m in fees. The Group has a 3-year, GBP18m
Coronavirus Large Business Interruption Scheme Loan revolving
credit facility at a 3.75% margin with a commitment fee of 1.5%,
expiring in March 2024. Quarterly covenant tests are in place on
minimum revenue and minimum liquidity for 2 years to December 2022.
From March 2023 additional covenants are added for leverage and
interest cover. No drawings have been made on this facility and all
covenants have been met.
The Group's increase in trade and other payables cash flow of
$16.2m is a result of the business activities resuming to more
typical trading levels pre-pandemic with trade and other payables
increasing to $29.2m, in line with that as at 31 December 2019,
reversing the $14.4m outflow in 2020. As at 31 December 2020 many
elements of our business were severely impacted by government
mandated restrictions, most of which were removed by December
2021.
Dividend
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 strategic product development or,
where the opportunities arise, value accretive acquisitions.
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 which resulted
in no impairment charges being recorded.
Reversal of impairment of TE2 intangible assets
As of 31 December 2021, the recoverable value of TE2 was
significantly improved following a period of strong trading,
improved cost control and efficiency of the cash generating unit. A
review was conducted of the $29.2m of intangible assets impaired in
2019, updated to 31 December 2021 based on their original useful
economic lives (periods of 2-5 years). Each category of asset was
assessed as at 31 December 2021 to determine if they remain in
existence and are generating economic returns. As a result of this
reassessment, $1.0m of development costs, $0.3m of acquired
customer relationships and $0.5m of acquired intellectual property
was reversed with a credit of $1.7m to administrative expense.
Taxation
The tax credit of $9.9m represents an effective tax rate on the
$12.1m of statutory profit before tax (2020: Loss of $32.9m) of
81.8% (2019: 9.2%).
The key reconciling items to actual tax rates is $12.6m of
previously unrecognised deferred tax asset on US losses and US tax
credits being available for recognition in the year due to the
ability to forecast profitability to utilise these losses and tax
credits. This includes $2.4m of pre-acquisition losses of Blazer
and Flips Flops Inc which were previously unrecognised during 2021,
after concluding that these losses transfer and are available to
utilise. There is a further $0.2m of other items that reconcile the
tax credit back to the Group's principal US tax rate where the
majority of the Group's earnings are derived. $47.0m of gross US
losses and tax credits are now recognised following a year of high
profitability and the demonstration that these tax savings can be
utilised, $3.6m of gross US tax credits, $0.9m net, remain
unrecognised as a result of uncertain tax provisions.
Going concern
The financial statements have been prepared on a going concern
basis which the Directors consider to be appropriate for the
following reasons.
The Directors have prepared cash flow forecasts for the going
concern period, which indicate that, taking account of severe but
plausible downsides, the Group will have sufficient funds to meet
the liabilities of the Group as they fall due for that period. The
Group's severe but plausible downside scenario models revenue of
$97.7m for 2022 and a marginal increase thereafter and reduces
underlying administrative spend to $66.0m and a marginal increase
thereafter for the same corresponding periods to reflect cost
cutting measures that would be implemented. During the 2020
pandemic year the Group was able to reduce its underlying
administrative expense to $56.5m (see page 21). The severe but
plausible downside scenario indicates that the Group's cash balance
reaches a low point of $51.4m and does not utilise any of its
GBP18m loan facility.
At 31 December 2021 the Group has cash of $64.1m and an
available undrawn loan facility of GBP18m. Covenants on the undrawn
facility were passed during 2021 and are forecast to be passed
through the going concern period.
Consequently, the Directors are confident that the Group and
Company will have sufficient funds to continue to meet its
liabilities as they fall due for the assessment period being at
least 12 months from the date of signing and therefore have
prepared the financial statements on a going concern basis.
On behalf of the Board:
Fern MacDonald
Chief Financial Officer
21 March 2022
Consolidated statement of comprehensive income
for the financial year ended 31 December 2021
2021 2020
Notes $000 $000
--------------------------------------------- ------ --------- ---------
Revenue 124,794 56,094
Cost of sales (28,401) (13,109)
--------- ---------
Gross profit 96,393 42,985
Administrative expenses (82,872) (73,339)
--------- ---------
Operating profit/(loss) before reversal
of impairment of intangible assets 11,814 (27,727)
Reversal of impairment of intangible assets 1,707 -
Impairment of intangible assets - (2,627)
--------------------------------------------- ------ --------- ---------
Operating profit/(loss) 13,521 (30,354)
--------- ---------
Finance expense (1,450) (2,518)
Finance income 39 10
--------- ---------
Profit/(loss) before tax 12,110 (32,862)
--------- ---------
Income tax benefit 8 9,908 3,008
--------- ---------
Profit/(loss) for the period 22,018 (29,854)
========= =========
Other comprehensive (loss)/income
Items that will be reclassified to income
statement
Exchange differences on translating foreign
operations (219) 4,910
Income tax credit on items recorded in
other comprehensive income 188 1,129
--------- ---------
(31) 6,039
Total comprehensive income/(loss) 21,987 (23,815)
========= =========
All profit and comprehensive income is
attributable to the owners of the parent
Earnings/(losses) per share expressed in
cents per share:
Basic 9 53.39 (84.78)
Diluted 9 51.45 (84.78)
All activities of the Company are classified as continuing
Consolidated statement of financial position
as at 31 December 2021
31 December 31 December
Registered Number: 03959429 2021 2020
Notes $000 $000
---------------------------------- ------ ------------ ------------
Assets
Non-current assets
Intangible assets 10 120,088 129,503
Property, plant and equipment 2,236 2,439
Right of use assets 3,053 4,166
Contract assets 375 1,109
Deferred tax assets 8 16,260 7,701
------------ ------------
142,012 144,918
------------ ------------
Current assets
Inventories 286 1,927
Contract assets 3,614 3,404
Trade and other receivables 18,805 15,968
Income tax receivable 1,097 1,858
Cash and cash equivalents 64,050 56,355
------------ ------------
87,852 79,512
------------ ------------
Liabilities
Current liabilities
Trade and other payables 29,219 17,328
Derivative financial liabilities - 758
Lease liabilities 1,003 1,163
Contract liabilities 8,063 7,525
Income tax payable 503 667
------------ ------------
38,788 27,441
------------ ------------
Net current assets 49,064 52,071
------------ ------------
Non-current liabilities
Deferred tax liabilities 8 4,236 7,580
Contract liabilities 914 1,303
Lease liabilities 2,733 3,790
Borrowings - 26,699
------------ ------------
7,883 39,372
------------ ------------
Total liabilities 46,671 66,813
------------ ------------
Net assets 183,193 157,617
============ ============
Shareholders' equity
Called up share capital 11 596 595
Share premium 153,504 153,327
Retained earnings 9,753 (15,864)
Merger relief reserve 19,641 19,641
Translation reserve (301) (82)
------------ ------------
Total shareholders' equity 183,193 157,617
============ ============
Consolidated statement of cash flow
for the financial year ended 31 December 2021
2021 2020
Notes $000 $000
Cash flows from operations
Profit/(loss) for the period 22,018 (29,854)
Adjustments for:
Depreciation (excluding leased assets) 1,827 1,758
Depreciation on leased assets 1,035 1,461
Amortisation on acquired intangibles 10 2,373 2,573
Amortisation on development costs and other
intangibles 10 9,319 11,446
Impairment of intangibles - 2,627
Reversal of impairment of intangible assets 10 (1,707) -
Loss on disposal of property, plant and
equipment 2 22
Share-based payment 2,490 1,398
Deferred consideration charge - 150
Finance expense 1,450 2,518
Finance income (39) (10)
Foreign exchange gain 312 1,308
Income tax benefit 8 (9,908) (3,008)
RDEC tax credits (81) (384)
29,091 (7,995)
Decrease/(increase) in inventories 861 (923)
(Increase)/decrease in trade and other
receivables (3,592) 6,658
(Decrease)/increase in contract assets/contract
liabilities (3,316) 4,847
Increase/(decrease) in trade and other
payables 16,241 (14,444)
Cash generated from/(used in) operations 39,285 (11,857)
Tax paid (171) (2,657)
--------- ---------
Net cash inflow/(outflow) from operating
activities 39,114 (14,514)
--------- ---------
Cash flows from investing activities
Deferred consideration settlement (13) (477)
Capitalised internal development costs (720) (2,969)
Purchase of property, plant and equipment (960) (437)
Proceeds from sale of intangible assets 23 -
Interest received 28 6
--------- ---------
Net cash used in investing activities (1,642) (3,877)
--------- ---------
Cash flows from financing activities
Share issue 178 48,215
Share issue costs - (2,123)
Sale of shares held in trust - 198
Interest paid (514) (633)
Payments on property lease liabilities (1,408) (1,622)
Cash paid to refinance (813) -
Proceeds from borrowings - 10,116
Repayments of borrowings (27,033) -
Net forward FX contract settlement used
to hedge share issue proceeds (409)
Net cash (utilised in)/generated from financing
activities (29,999) 54,151
--------- ---------
Increase in cash and cash equivalents 7,473 35,760
Cash and cash equivalents at beginning
of year 56,355 16,205
Exchange gain on cash and cash equivalents 222 4,390
--------- ---------
Cash and cash equivalents at end of year 64,050 56,355
========= =========
Consolidated statement of changes in equity
for the financial year ended 31 December 2021
Merger Own shares
Share Share Retained relief held Translation
capital premium earnings reserve in trust reserve Total
$000 $000 $000 $000 $000 $000 $000
--------- --------- ---------- --------- ----------- ------------ ---------
Balance at
1 January 2021 595 153,327 (15,864) 19,641 - (82) 157,617
--------- --------- ---------- --------- ----------- ------------ ---------
Comprehensive income for the
year
Profit for
period - - 22,018 - - - 22,018
Other comprehensive
income
Exchange differences
on translating
foreign operations - - - - - (219) (219)
Income tax
credit on items
recorded in
other comprehensive
income - - 188 - - - 188
--------- --------- ---------- --------- ----------- ------------ -----------
Total comprehensive
income for
the year - - 22,206 - - (219) 21,987
--------- --------- ---------- --------- ----------- ------------ ---------
Issue of share
capital 1 177 - - - - 178
Share-based
payments - 2,490 - - - 2,490
Share option
tax charge
- deferred - - 921 - - - 921
Total contributions
by and distributions
by owners 1 177 3,411 - - - 3,589
Balance at
31 December
2021 596 153,504 9,753 19,641 - (301) 183,193
========= ========= ========== ========= =========== ============ =========
Balance at
1 January 2020 427 107,403 11,331 19,641 (665) (4,918) 133,219
Comprehensive income for the
year
(Loss) for
period - - (29,854) - - - (29,854)
Other comprehensive
income
Exchange differences
on translating
foreign operations - - - - - 4,910 4,910
Income tax
credit on items
recorded in
other comprehensive
income 1,129 1,129
--------- --------- ---------- --------- ----------- ------------ ---------
Total comprehensive
income for
the year - - (28,725) - - 4,910 (23,815)
--------- --------- ---------- --------- ----------- ------------ ---------
Contributions by and distributions
to owners
Issue of share
capital 168 48,047 - - - - 48,215
Share issue
costs - (2,123) - - - - (2,123)
Share-based
payments - - 1,398 - - (74) 1,324
Equity-settled
deferred consideration - - 150 - - - 150
Share option
tax charge
- deferred - - 50 - - - 50
Reduction of
shares held
in trust (68) 665 597
Total contributions
by and distributions
by owners 168 45,924 1,530 - 665 (74) 48,213
Balance at
31 December
2020 595 153,327 (15,864) 19,641 - (82) 157,617
========= ========= ========== ========= =========== ============ =========
Notes to the consolidated financial statements
for the financial year ended 31 December 2021
1. Reporting entity
accesso Technology Group plc is a public limited company
incorporated in the United Kingdom, whose shares are publicly
traded on the AIM market. The Company is domiciled in the United
Kingdom and its registered address is Unit 5, The Pavilions,
Ruscombe Park, Twyford, Berkshire RG10 9NN. This consolidated
financial information comprise the Company and its subsidiaries
(together referred to as the "Group").
The Group's principal activities are the development and
application of ticketing, mobile and eCommerce technologies,
licensing and operation of virtual queuing solutions and providing
a personalised experience to customers within the attractions and
leisure industry. The eCommerce technologies are generally licensed
to operators of venues, enabling the online sale of tickets, guest
management, and point-of-sale ("POS") transactions. The virtual
queuing solutions and personalised experience platforms are
installed by the Group at a venue, and managed and operated by the
Group directly or licensed to the operator for their operation.
2. Basis of accounting
The preliminary results for the year ended 31 December 2021
and the results for the year ended 31 December 2020 are prepared
under International Financial Reporting Standards and applicable
law. The accounting policies adopted in this preliminary announcement
are consistent with the Annual Report for the year ended 31
December 2021.
The financial information set out above does not constitute
the Company's statutory accounts for the years ended 31 December
2021 or 2020 but is derived from those accounts. Statutory
accounts for 2020 have been delivered to the registrar of companies,
and those for 2021 will be delivered in due course. The auditor
has reported on those accounts; their reports were (i) unqualified,
(ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying
their report and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006.
While the financial information included in this announcement
has been prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS),
this announcement does not itself contain sufficient information
to comply with IFRS.
The Group's consolidated financial statements have been prepared
in accordance with IFRS. They were authorised for issue by
the Company's board of directors on 21 March 2022.
Details of the Group's accounting policies are included in
notes 3 and 4.
3. Changes to significant accounting policies
Other new standards and improvements
Other than as described below, the accounting policies,
presentation and methods of calculation adopted are consistent with
those of the Annual Report and Accounts for the year ended 31
December 2020, apart from standards, amendments to or
interpretations of published standards adopted during the
period.
The following standards, interpretations and amendments to
existing standards are now effective and have been adopted by the
Group. The impacts of applying these policies are not considered
material:
- Amendments to References to the Conceptual Framework
in IFRS Standards - Amendments to IFRS 2, IFRS 3, IFRS
6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC
12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32 to update
those pronouncements with regard to the revised the
Conceptual Framework.
- Amendments to IFRS 3 "Business Combinations", clarifies
the definition of a business in acquisitions.
- Amendments to IAS 1 and IAS 8: guidance on the definition
of material.
- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 16 and IFRS
4: Interest rate benchmark reforms. Phase 1 covers hedge
accounting impacts and discontinuance exemptions.
- Annual Improvements cycle 2018-2020 includes relevant
amendments clarifying capitalisation of transaction
fees/inclusion of specific fees in modification/extinguishment
test within IFRS 9 Financial Instruments.
- Amendments to IFRS 3 "Business combinations", IAS 16
"Property, plant and equipment" and IAS 37 "Provisions,
Contingent assets and Contingent liabilities".
New standards and interpretations not yet adopted
A number of new standards, amendments to standards, and
interpretations are either not effective for 2022 or not relevant
to the Group, and therefore have not been applied in preparing
these accounts.
4. Significant accounting policies
The principal accounting policies adopted in the preparation of
the financial information are set out below. The policies have been
consistently applied to all the periods presented.
Basis of consolidation
The consolidated financial statements incorporate the results of
accesso Technology Group plc and all of its subsidiary undertakings
as at 31 December 2021 using the acquisition method. Subsidiaries
are all entities over which the Group has the ability to affect the
returns of the entity and has the rights to variable returns from
its involvement with the entity. The results of subsidiary
undertakings are included from the date of acquisition.
The acquisition of subsidiaries is accounted for using the
acquisition method. The cost of the acquisition is measured at the
aggregate of the fair value, at the date of exchange, of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree. Any
costs directly attributable to the business combination are written
off to the Group income statement in the period incurred. The
acquiree's identifiable assets, liabilities, and contingent
liabilities that meet the conditions under IFRS 3 are recognised at
their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and
initially measured at cost, being the excess of the cost of the
business combination over the Group's interest in the net fair
value of the identifiable assets, liabilities, and contingent
liabilities recognised.
Investments, including the shares in subsidiary companies held
as fixed assets, are stated at cost less any provision for
impairment in value. Where necessary, adjustments are made to the
financial statements of subsidiaries to bring the accounting
policies used in line with those used by the Group.
Lo-Q (Trustees) Limited, a subsidiary company that holds an
employee benefit trust on behalf of accesso Technology Group plc,
is under control of the Board of directors and hence has been
consolidated into the Group results.
All intra-Group transactions, balances, income and expenses are
eliminated on consolidation.
Going concern
The financial information has been prepared on a going concern
basis which the Directors consider to be appropriate for the
following reasons.
The Directors have prepared cash flow forecasts for the going
concern period, which indicate that, taking account of severe but
plausible downsides, the Group will have sufficient funds to meet
the liabilities of the Group as they fall due for that period. The
Group's severe but plausible downside scenario models revenue of
$97.7m for 2022 and a marginal increase thereafter and reduces
underlying administrative spend to $66.0m and marginal increase
thereafter for the same corresponding periods to reflect cost
cutting measures that would be implemented. During the 2020
pandemic year the Group was able to reduce its underlying
administrative expense to $56.5m. The severe but plausible downside
scenario indicates that the Group's cash balance reaches a low
point of $51.4m and does not utilise any of its GBP18m loan
facility.
At 31 December 2021 the Group has cash of $64.1m and an
available undrawn loan facility of GBP18m. Covenants on the undrawn
facility were passed during 2021 and are forecast to be passed
through the going concern period.
Consequently, the Directors are confident that the Group and
Company will have sufficient funds to continue to meet its
liabilities as they fall due for the assessment period being at
least 12 months from the date of signing and therefore have
prepared the financial information on a going concern basis.
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated into the respective
functional currencies of Group companies at the rates ruling when
the transactions occur.
Monetary assets and liabilities denominated in foreign currency
are translated into the functional currency at the exchange rate
at the reporting date. Non-monetary assets and liabilities that
are measured at fair value in a foreign currency are translated
into the functional currency at the exchange rate when the fair
value was determined. Non-monetary items that are measured based
on historical cost in a foreign currency are translated at the exchange
rate at the date of the transaction.
Foreign operations
The assets and liabilities of foreign operations, including goodwill,
are translated into USD at the exchange rates at the reporting date.
The income and expenses of foreign operations are translated into
USD at the rates ruling when the transactions occur, or appropriate
averages.
Foreign currency differences on translating the opening net assets
at an opening rate and the results of operations at actual rates
are recognised in other comprehensive income and accumulated in
the translation reserve. Retranslation differences recognised in
other comprehensive income will be reclassified to profit or loss
in the event of a disposal of the business, or the Group no longer
has control or significant influence.
Revenue from contracts with customers
IFRS 15 provides a single, principles based five step model to be
applied to all sales contracts as outlined below. It is based on
the transfer of control of goods and services to customers and replaces
the separate models for goods and services.
1. Identify the contract(s) with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations
in the contract
5. Recognise revenue when or as the entity satisfies its performance
obligations.
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
measured reliably. The following table provides information about
the nature and timing of the satisfaction of performance obligations
in contracts with customers, including significant payment terms,
and the related revenue recognition policies.
Type of Nature of the performance
product/service/ obligations and significant
Segment payment terms Accounting policy
------------------ --------------------------------- ---------------------------------
a. Point-of-sale Each contract provides The transaction price is
(POS) licences the customer with the allocated
and support right to use the POS license using the residual approach,
revenue (installed on premise) where
- Ticketing for terms between one the support revenue is carved
and distribution and three years. The customer out of the total consideration
also receives support using an estimate that best
for typically a period reflects
of one year. This support its stand-alone selling price.
is not necessary for the Revenue from sale of POS
functionality of the licence licenses
and is therefore a distinct is recognised at a point in time
performance obligation when the customer has been
from the right to use provided
the POS licence. with the software. Point in time
With agreements longer recognition is appropriate
than one year, invoices because
are generated either quarterly the licence provides the
or annually; usually payable customer
within thirty days. with the right of use of the POS
Although payments are software as it exists and is
made over the term of fully
the agreement, the agreement functional from the date it is
is binding for the negotiated provided to the customer.
term. The total transaction Support revenue is recognised
price is payable over on a straight-line basis over
the term of the agreement the term of the contract, which
via the annual or quarterly in most cases is one year and
instalments. is renewable at the option of
the customer thereafter.
The revenue recognition of POS
licenses at a point in time
gives
rise to a contract asset at
inception.
The balance reduces as the
consideration
is billed annually/ quarterly
in accordance with the
agreement.
b. Software Each contract provides The transaction price is
licences the customer with the allocated
and the right to use the software using the residual approach,
related license (installed on where
maintenance premise) with annual support the annual support and
and support and maintenance. The support maintenance
revenue and maintenance is not revenue is carved out of the
- Ticketing required to operate the total
and distribution software and is considered consideration using an estimate
and Guest a distinct performance that best reflects is
Experience obligation from the right stand-alone
to use the software license. selling price.
The customer has an option Annual support and maintenance
to renew the license at revenue is recognised on a
no additional cost by straight-line
annually renewing support basis over the term of the
and maintenance at each contract,
anniversary. This is considered which in most cases is one year
a material right under and is renewable at the option
IFRS 15 and represents of the customer thereafter.
a separate performance Revenue from sale of annual
obligation. software
Invoices are raised at licenses is recognised at a
the beginning of each point
contract for the software in time when the customer has
license and annual support been provided with the software.
and maintenance. Subsequently, The revenue is recognised at a
invoices are raised at point in time because the
each anniversary of the licence
contract for annual support provides the customer with the
and maintenance (as software right of use of the software as
license is renewed at it exists and is fully
no additional cost). functional
from the date it is provided to
the customer.
Revenue from sale of multi-year
software license contracts is
spread as the customer has the
option to renew each year's
licence
at no additional cost by paying
the annual support and
maintenance
fee. A proportion of the license
payment is deferred and
recognised
at a future point in time when
the customer renews. The amount
that is deferred is dependent
on the term of the contract. For
example: on the inception of a
three-year contract, two thirds
of the licence fee consideration
would be deferred and released
equally on the first and second
anniversary when the customer
renews their maintenance and
support.
Perpetual licences are
recognised
in the same manner, with the
exception
being that the contract term is
estimated to be five years.
If the customer chooses not to
exercise the above option, any
residual deferred revenue would
be recognised as income in that
period.
The deferred revenue gives rise
to a contract liability at the
inception of the contract. The
balance reduces as revenue is
recognised at each contract
anniversary.
Nature of the performance
Type of obligations and significant
product/service payment terms Accounting policy
------------------ --------------------------------- ---------------------------------
c. Virtual Virtual queuing systems IFRS 15 focuses on control of
queuing are installed at a client's the goods or services.
system - location, and revenue is Management
Guest Experience recognised when a park guest have determined that the Group
uses the service. The Group's is acting as the agent in all
performance obligation is queuing contracts as it is the
either to provide a licence attractions who bring the guest
to and maintain a system to the parks, control hours of
in the park or operate the operation and have influence
system within the park and over many aspects of the service
is contracted with the we supply. accesso therefore
attraction only recognises its portion of
owner, not end consumer. the sale as revenue, rather than
the full amount of the guest
payment which is paid to the
attraction.
d. Ticketing Revenue is recognised at Ticketing and eCommerce revenue
and eCommerce the time the ticket is sold is recognised at the time the
revenue or the transaction takes ticket is sold through our
- Ticketing place. Invoices are issued platform
and distribution monthly and generally payable or the transaction takes place.
within thirty days. accesso recognises only its fee
for processing the transaction
as the agent rather than the
gross ticket value.
e. Professional Professional services revenue Bespoke professional services
services is typically providing work is recognised over time
- Ticketing customised where the Group has enforceable
and distribution software development and rights to revenue in the event
and Guest in general is agreed with of cancellation.
Experience the customer and billed The Group recognises revenue
at each month end. Certain over time using the input method
contracts span longer time (hours/total budgeted hours)
periods whereby the Group when this method best depicts
carries out customisation the Group's performance of
and delivers software releases transferring
to customers at predetermined control.
milestones. For certain customers the output
method is adopted where the
Group's
right to consideration
corresponds
directly with the completed
monthly
performance obligation, revenue
for these customers is
recognised
in line with the amount of
revenue
the Group is entitled to
invoice.
f. Hardware On certain contracts, customers This revenue is recognised at
sales - request that the Group procures the point the customer obtains
Ticketing hardware on their behalf control of the hardware which
and distribution which the Group has determined is considered to be the point
and Guest to be a distinct performance of delivery when legal title
Experience obligation. passes. accesso takes control
and risk of ownership on
hardware
procurement and recognises sales
and costs on a gross basis as
principal.
g. Platform Cloud-based experience Revenue is billed monthly and
fees management recognised over time as the
platform systems are used performance
by certain venues to provide obligations of hosting and
customer relationship supporting
management, the secure platforms are
guest personalisation, payment provided
and ordering services, push to the venues.
notifications, scheduling,
offers, location-based services,
consumer-facing screens
and many other services
to end users at attractions.
These secure platforms are
provided to venues together
with support under annual
contracts.
Contract assets and contract liabilities
Contract assets represent licence fees which have been
recognised at a point in time but where the consideration is
contractually payable over time, professional service revenue
whereby control has been passed to the customer and deferred
contract commissions incurred in obtaining a contract which are
recognised in line with the recognition of the revenue. Contract
assets for point in time licence fees and unbilled professional
service revenue represent financial assets and are considered for
impairment on an expected credit loss model, these assets have
historically had immaterial levels of bad debt and are with credit
worthy customers, and consequently the Group has not recognised any
impairment provision against them.
Contract liabilities represent discounted renewal options on
licence arrangements whereby a customer has the right to renew
their licence at a full discount subject to the payment of annual
support and or maintenance fees on each anniversary of the
contract. Contract liabilities are recognised as income when a
customer exercises their renewal right on each anniversary of the
contract and pays their annual maintenance and support. In the
situation of a customer terminating their contract all unexercised
deferred renewal rights would be recognised as income, representing
a lapse of the renewal right options. The licence fees related to
these contract liabilities are non-refundable.
Where these assets or liabilities mature in periods beyond 12
months of the balance sheet date they are recognised within
non-current assets or non-current liabilities as appropriate.
Interest expense recognition
Expense is recognised as interest accrues, using the effective
interest method, to the net carrying amount of the financial
liability.
Employee benefits
Share-based payment arrangements
The Group issues equity-settled share-based payments to full-time
employees. Equity-settled share-based payments are measured at the
fair value at the date of grant, with the expense recognised over
the vesting period, with a corresponding increase in equity. The
amount recognised as an expense is adjusted to reflect the Group's
estimate of shares that will eventually vest, such that the amount
recognised is based on the number of awards that meet the service
and non-market performance conditions at the vesting date.
The fair value of our share awards with time-based and employment
conditions are measured by use of a Black-Scholes model, and share
options issued under the Long-Term Incentive Plan (LTIP) are measured
using the Monte Carlo method, due to the market-based conditions
upon which vesting is dependent. The expected life used in the model
has been adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions, and behavioural
considerations.
The LTIP awards contain market-based vesting conditions where they
have been set. Market vesting conditions are factored into the fair
value of the options granted. As long as all other vesting conditions
are satisfied, a charge is made irrespective of whether the market
vesting conditions are satisfied. The cumulative expense is not
adjusted for failure to achieve a market vesting condition or where
a non-vesting condition is not satisfied.
LTIP awards granted in 2020 included continued employment conditions
only due to the unprecedented market instability, before being modified
on 12 February 2021 by the Remuneration Committee to include a market-based
total shareholder return condition and cash EBITDA non-market-based
conditions. The fair value of these LTIP share awards were initially
valued by use of a Black-Scholes model due to them including only
continued employment conditions. On their modification they were
reassessed using a Monte Carlo method, due to the market-based conditions
upon which vesting is dependent, this resulted in a fair value below
that on which the awards were initially granted, as such the fair
value was not reduced in line with IFRS 2 Share-based payments and
they continue to be recognised at their original grant date fair
value.
Pension costs
Contributions to the Group's defined contribution pension schemes
are charged to the consolidated statement of comprehensive income
in the period in which they become due.
Property, plant and equipment
Items of property, plant and equipment are stated at cost of
acquisition or production cost less accumulated depreciation
and impairment losses.
Depreciation is charged to write off the cost of assets, less
residual value, over their estimated useful lives, using the
straight-line method, on the following bases:
Plant, machinery, and
office equipment 20 - 33.3%
Installed systems 25 - 33.3%, or life of contract
Furniture and fixtures 20%
Leasehold Improvements Shorter of useful life of the asset or
time remaining within the lease contract
Inventories
The Group's inventories consist of parts used in the manufacture
and maintenance of its virtual queuing product, along with peripheral
items that enable the product to function within a park.
Inventories are valued at the lower of cost and net realisable
value, after making due allowance for obsolete and slow-moving
items. Inventories are calculated on a first-in, first-out basis.
Park installations are valued on the basis of the cost of inventory
items and labour plus attributable overheads. Net realisable
value is based on estimated selling price less additional costs
to completion and disposal.
Deferred tax
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the Consolidated
and Company statements of financial position differs from its
tax base, except for differences arising on:
-- the initial recognition of goodwill;
-- the initial recognition of an asset or liability in a
transaction which is not a business combination and at
the time of the transaction affects neither accounting
or taxable profit; and
-- investments in subsidiaries and jointly controlled entities
where the Group is able to control the timing of the reversal
of the difference and it is probable that the difference
will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances
where it is probable that taxable profit will be available against
which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the
reporting date and are expected to apply when the deferred tax
liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets
and liabilities and the deferred tax assets and liabilities
relate to taxes levied by the same tax authority on either:
-- the same taxable Group company; or
-- different Group entities which intend either to settle
current tax assets and liabilities on a net basis, or
to realise the assets and settle the liabilities simultaneously,
in each future period in which significant amounts of
deferred tax assets or liabilities are expected to be
settled or recovered.
Current income tax
The tax expense or benefit for the period comprises current
and deferred tax. Tax is recognised in the income statement,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case,
the tax is also recognised in other comprehensive income or
directly in equity, respectively.
The current income tax charge is calculated on the basis of
the tax laws enacted or substantively enacted at the balance
sheet date in the countries where the Company and its subsidiaries
operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities. See note
8 for further discussion on provisions related to tax positions.
Goodwill and impairment of non-financial assets
Any excess of the cost of the business combination over the
Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities is recognised in the
Consolidated Statement of Financial Position as goodwill and is not
amortised.
After initial recognition, goodwill is stated at cost less any
accumulated impairment losses, with the carrying value being
reviewed for impairment at an operating segment level before
aggregation, at least annually and whenever events or changes in
circumstances indicate that the carrying value may be impaired.
Where the recoverable amount of the cash-generating unit is less
than its carrying amount including goodwill, an impairment loss is
recognised in the Consolidated Statement of Profit or Loss.
Any non-financial assets other than goodwill which have suffered
impairment are reviewed for possible reversal of the impairment at
each reporting date. Assets that are subject to amortisation and
depreciation are also reviewed for any possible impairment at each
reporting date.
Externally acquired intangible assets
Intangible assets are capitalised at cost and amortised to nil by
equal instalments over their estimated useful economic life.
Intangible assets are recognised on business combinations if they
are separable from the acquired entity. The amounts ascribed to
such intangibles are arrived at by using appropriate valuation techniques.
The significant intangibles recognised by the Group and their useful
economic lives are as follows:
* Trademarks over 10 years
* Patents over 20 years
* Customer relationships and supplier contracts over 1
to 15 years
* Acquired internally developed technology over 5 to 7
years
Internally generated intangible assets and research and development
Expenditure on internally developed products is capitalised if it
can be demonstrated that it is substantially enhancing an asset
and:
* It is technically feasible to develop the product for
it to be sold;
* Adequate resources are available to complete the
development;
* There is an intention to complete and sell the
product;
* The Group is able to sell the product;
* Sale of the product will generate future economic
benefits; and
* Expenditure on the project can be measured reliably.
In accordance with IAS 38 'Intangible Assets', expenditure incurred
on research and development is distinguished as either related to
a research phase or to a development phase. Development expenditure
not satisfying the above criteria and expenditure on the research
phase of internal projects is recognised in the Consolidated income
statement as incurred.
Development expenditure is capitalised and amortised within administrative
expenses on a straight-line basis over its useful economic life
between 3-5 years from the date the intangible asset goes into use.
The amortisation expense is included within administrative expenses
in the Consolidated income statement.
All advanced research phase expenditure is charged to the income
statement. For development expenditure, this is capitalised as an
internally generated intangible asset, only if it meets the criteria
noted above. The Group has contractual commitments for development
costs of $nil (2020: $nil).
Acquired intellectual property rights and patents
Intellectual property rights comprise assets acquired, being external
costs, relating to know-how, patents, and licences. These assets
have been capitalised at the fair value of the assets acquired and
are amortised within administrative expenses on a straight-line
basis over their estimated useful economic life of 5 to 7 years.
Fair value of contingent consideration
Contingent consideration payable in cash in connection with
acquisitions is measured at its fair value as of the reporting date
and classified as a financial liability with subsequent
re-measurement through profit and loss.
Equity-settled contingent consideration that results in either a
fixed number of equity instruments or no issue of equity where the
employment condition is not met is treated as equity-settled.
Equity settled contingent consideration is fair valued at the
acquisition date, it is not re-measured at each reporting date and
its subsequent settlement is accounted for within equity.
Where cash or equity consideration is contingent on the
continued employment of the sellers the fair value of the expense
is recognised as a remuneration expense in the statement of
comprehensive income over the deferral period, where the employment
condition does not apply and the consideration is in respect of a
business combination it is included within cost of investment.
Financial assets
The Group classifies all its financial assets into one of the
following categories, depending on the purpose for which the asset
was acquired. The Group's accounting policy for each category is as
follows:
-- Trade and loan receivables: Trade receivables are initially
recognised by the Group and carried at original invoice amount
less an allowance for any uncollectible or impaired amounts.
An estimate for doubtful debts is made when collection of
the full amount is no longer probable. Debts are written
off when they are identified as being uncollectible. Contract
assets and other receivables are recognised at fair value.
Loan receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an
active market. They arise principally through the provision
of goods and services to customers (trade receivables), but
also incorporate other types of contractual monetary asset.
Impairment of a financial asset is recognised if there is
objective evidence that the balance will not be recovered.
-- Cash and cash equivalents in the statement of financial
position comprise cash at bank, cash in hand and short-term
deposits with an original maturity of three months or less.
Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included
as a component of cash and cash equivalents for the purposes
of the consolidated statement of cash flow.
Financial liabilities
The Group treats its financial liabilities in accordance with
the following accounting policies:
-- Trade payables and other short-term monetary liabilities
are recognised at fair value and subsequently at amortised
cost.
-- Bank borrowings and leases are initially recognised at
fair value net of any transaction costs directly attributable
to the issue of the instrument. Such interest-bearing liabilities
are subsequently measured at amortised cost using the effective
interest rate method, which ensures that any interest expense
over the period to repayment is at a constant rate on the
balance of the liability carried in the statement of financial
position. "Interest expense" in this context includes initial
transaction costs and premiums payable on redemption, as
well as any interest payable while the liability is outstanding.
For loan modifications the Group assesses if the loan can
be prepaid without significant penalty and if so no gain
or loss is recognised in the income statement at the date
of the modification.
-- Derivative financial liability - forward foreign currency
contracts that are out-of-money derivatives using period
end exchange rates, relative to the forward point exchange
rate entered into by the Group on inception of the agreement,
are held as derivative financial liabilities. These level
one financial instruments are carried in the statement of
financial position at fair value with changes in fair value
recognised in the consolidated statement of comprehensive
income in the finance expense line. Variation margin paid
to the counter party on these forward contracts has been
offset against the derivative financial liability in the
Statement of Financial Position.
Employee benefit trust (EBT)
As the Company is deemed to have control of its EBT, it is treated
as a subsidiary and consolidated for the purposes of the consolidated
financial information. Within the Company balance sheet the
EBT is accounted as an investment held at cost less accumulated
impairment. The EBT's assets (other than investments in the
Company's shares), liabilities, income, and expenses are included
on a line-by-line basis in the consolidated financial statements.
The EBT's investment in the Company's shares is deducted from
equity in the consolidated statement of financial position as
if they were treasury shares.
Government grants
The Group received government support for payroll costs
throughout the year ended 31 December 2020 including the UK
Coronavirus Job Retention Scheme and equivalent schemes in
Australia and Germany. Grants that compensate the Group for
expenses incurred are recognised in profit or loss as other income
on a systematic basis in the periods in which the expenses are
recognised, unless the conditions for receiving the grant are met
after the related expenses have been recognised. In this case, the
grant is recognised when it becomes receivable. No government
support was received during the year ended 31 December 2021.
IFRS 16 Leases
The Group assesses whether a contract is or contains a lease.
Under IFRS 16, a contract is, or contains, a lease if the contract
conveys a right to control the use of an identified asset for a
period of time in exchange for consideration.
As a lessee
The Group leases commercial office space. The Group has elected
not to recognise right of use assets and lease liabilities for some
leases of low value. The Group recognises the lease payments
associated with these leases as an expense on a straight-line basis
over the lease term.
The Group recognises a right-of-use asset and lease liability at
the lease commencement date.
The right of use asset and lease liability are initially
measured at the present value of the lease payments that are not
paid at the commencement date, discounting using the Group's
incremental borrowing rate. Subsequently the right of use asset is
adjusted for impairment losses and adjusted for certain
remeasurements of the lease liability.
The lease liability is subsequently increased by the interest
cost on the lease liability and decreased by lease payments made.
It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, a change in the estimate
of the amount expected to be payable under a residual value
guarantee, or as appropriate, changes in the assessment of whether
a purchase or extension option is reasonably certain to be
exercised or a termination option is reasonably certain not to be
exercised.
The Group has applied judgement to determine the lease term for
some lease contracts that include renewal options. The assessment
of whether the Group is reasonably certain to exercise such options
impacts the lease term, which significantly affects the amount of
lease liabilities and right of use assets recognised.
5. Functional and presentation currency
The presentation currency of the Group is US dollars (USD) in
round thousands. Items included in the financial statements of each
of the Group's entities are measured in the functional currency of
each entity. The Group used the local currency as the functional
currency, including the parent Company, where the functional
currency is sterling. The Group's choice of presentation currency
reflects its significant dealings in that currency.
6. Critical judgments and key sources of estimation uncertainty
In preparing this consolidated financial information, the Group
makes judgements, estimates and assumptions concerning the future
that impact the application of policies and reported amounts
of assets, liabilities, income and expenses.
The resulting accounting estimates calculated using these judgements
and assumptions are based on historical experience and expectations
of future events and may not equal the actual results. Estimates
and underlying assumptions are reviewed on an ongoing basis,
and revisions to estimates are recognised prospectively.
The judgements and key sources of assumptions and estimation
uncertainty that have a significant effect on the amounts
recognised in the financial statements are discussed below.
Judgements
Information about judgements made in applying accounting
policies that have the most significant effects on the amounts
recognised in these consolidated financial information are
below:
Capitalised development costs
The Group capitalises development costs in line with IAS 38
Intangible Assets. Management applies judgement in determining
if the costs meet the criteria and are therefore eligible for
capitalisation at the outset of a project, $0.72m has been capitalised
on new projects during 2021 (2020: $2.97m). Significant judgements
include the determination that assets have been substantially
enhanced, the technical feasibility of the development, recoverability
of the costs incurred, and economic viability of the product
and potential market available considering its current and future
customers. See internally generated intangible assets and research
and development within note 4 for details on the Group's capitalisation
and amortisation policies, and Intangible Assets, note 10, for
the carrying value of capitalised development costs.
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that
have a significant risk of resulting in material adjustments in the
following year are:
Useful economic lives of capitalised development costs
The Group amortises its capitalised development costs over 3-5
years as this has been deemed by management to be the best
reflection of the lifecycle of their technology. If this useful
economic life estimate were to be 4 or 6 years the impact on the
current year amortisation would be $2,298k higher and $1,534k lower
respectively. Management will review this estimate each year to
ensure it is reflective of the technologies being developed.
Deferred tax asset on US losses and tax credits
The Group has recognised a deferred tax asset of $11.4m (which
comprises $8.4m of US losses ($1.7m of which expire in 2037) and
$3.0m of US tax credits (with 20-year expiry dates ranging from
2033 and 2040). The recognition of these assets is based on the
expected profitability of the US entities using the Group's 5-year
Board approved forecasts and risk adjusted profitability reducing
annually by 10% which indicates that the losses would be utilised
over a 5-year period and the US tax credits over 10 years. The
utilisation of the losses can only offset 80% of the tax liability
and US tax credits cannot be used on the first $25k of tax
liability up to a maximum of 25% of the remaining current tax
liability. The key inputs are not sensitive to plausible changes in
the assumptions, a further 10% risk adjustment was modelled across
the 15-year forecast period which results in the US losses being
recovered still in 5 years and the US credits in 11 years, within
any loss or tax credit expiry limits. The US losses were assessed
under the section 382 US tax legislation to validate they can be
utilised, this assessment will need to be conducted on an annual
basis to determine if any restriction is required.
7. Business and geographical segments
Segmental analysis
The Group's operating segments under IFRS have been determined
with reference to the financial information presented to the Board
of directors. The Board of the Group is considered the Chief
Operating Decision Maker ("CODM") as defined within IFRS 8, as it
sets the strategic goals for the Group and monitors its operational
performance against this strategy.
The Group's Ticketing and Distribution operating segment
comprises the following products:
o accesso Passport ticketing suite using our hosted proprietary
technology offering to maximise up selling, cross selling
and selling greater volumes.
o accesso Siriusware software solutions providing modules
in ticketing & admissions, memberships, reservations,
resource scheduling, retail, food service, gift cards,
kiosks and eCommerce.
o The accesso ShoWare ticketing solution for box office,
online, kiosk, mobile, call centre and social media sales.
o Ingresso operate a consolidated distribution platform
which connects venues and distributors, opening up a larger
global channel for clients to sell their event, theatre
and attraction tickets.
The Group's virtual queuing solution (accesso LoQueue) and
experience management platform (The Experience Engine 'TE2') are
headed by segment managers who discuss the operating activities,
financial results, forecasts and plans of their respective segments
with the CODM. These two distinct operating segments share similar
economic characteristics, customers and markets; the products are
heavily bespoke, technology and software intensive in their
delivery and are directly targeted at improving a guest's
experience of an attraction or entertainment venue, whilst
providing cross-selling opportunities and increased revenues to the
venues. Management therefore conclude that they meet the
aggregation criteria.
The Group's Guest Experience operating segment comprises the
following aggregated segments:
o accesso LoQueue providing leading edge virtual queuing
solutions to take customers out of line, improve guest
experience and increase revenue for theme parks
o The Experience Engine ("TE2") experience management platform
which delivers personalised real time immersive customer
experiences at the right time elevating the guest's experience
and loyalty to the brand
The Group's assets and liabilities are reviewed on a group basis
and therefore segmental information is not provided for the
statements of financial position of the segments.
The CODM monitors the results of the operating segments prior to
charges for interest, depreciation, tax, amortisation and
non-recurring items but after the deduction of capitalised
development costs. The Group has a significant amount of central
unallocated costs which are not segment specific. These costs have
therefore been excluded from segment profitability and presented as
a separate line below segment profit.
The following is an analysis of the Group's revenue and results
from the continuing operations by reportable segment which
represents revenue generated from external customers.
2021 2020
$000 $000
-------- -------
Ticketing and Distribution 75,930 37,966
Guest Experience 48,864 18,128
Total revenue 124,794 56,094
-------- -------
Ticketing Guest Central
and Distribution Experience unallocated Group
costs
Year ended 31 December 2021 $000 $000 $000 $000
------------------ ------------ ------------- ---------
Cash EBITDA (*) 62,600 34,332 (68,794) 28,138
------------------ ------------ ------------- ---------
Capitalised development spend 720
Depreciation and amortisation
(excluding acquired intangibles) (12,183)
Amortisation related to acquired
intangibles (2,371)
Share-based payments (2,490)
Reversal of impairment of intangible
assets 1,707
Finance income 39
Finance expense (1,450)
Profit before tax 12,110
=========
Ticketing Guest Central
and Distribution Experience unallocated Group
costs
Year ended 31 December 2020 $000 $000 $000 $000
------------------ ------------ ------------- ---------
Cash EBITDA (1) (2) 33,371 10,042 (54,863) (11,450)
------------------ ------------ ------------- ---------
Capitalised development spend 2,969
Depreciation and amortisation
(excluding acquired intangibles) (14,664)
Aborted sale process costs (461)
Deferred and contingent payments (150)
Amortisation related to acquired
intangibles (2,573)
Impairment related to TE2 (2,627)
Share-based payments (1,398)
Finance income 10
Finance expense (2,518)
Loss before tax (32,862)
=========
(1) Cash EBITDA is calculated as operating profit before the
deduction of amortisation, impairment of intangible assets,
depreciation, acquisition costs, deferred and contingent payments,
and costs related to share-based payments but after capitalised
development costs.
(2) During 2020 the Group structurally realigned their key
functions of Operations, Engineering, Product, Human Resources,
Finance, Administration, Commercial Sales and Marketing to have
single teams spanning across the Group and supporting the operating
segments, from 1 January 2021 the Group no longer attribute their
related costs to the segments for management reporting purposes.
Consequently, our 31 December 2020 segment note has been restated
to reflect a consistent presentation with 31 December 2021.
The segments will be assessed as the Group develops and
continues to make acquisitions.
An analysis of the Group's external revenues and non-current
assets (excluding deferred tax and contract assets) by geographical
location are detailed below:
Revenue Non-current assets
----------------- ---------------------
2021 2020 2021 2020
$000 $000 $000 $000
-------- ------- ---------- ---------
UK 17,118 5,228 24,826 26,866
Other Europe 3,251 1,826 18 10
Australia/South Pacific/Asia 4,537 2,413 109 255
USA and Canada 98,682 45,753 100,319 108,714
Central and South America 1,206 874 105 263
-------- ------- ---------- ---------
124,794 56,094 125,377 136,108
-------- ------- ---------- ---------
Revenue generated in each of the geographical locations is
generally in the local currency of the venue or operator based in
that location.
Major customers
The Group has entered into agreements with theme parks, theme
park groups, and attractions to operate its technology in single or
multiple theme parks or attractions within the theme park
group.
There are two park and attraction operators with which the Group
has contractual relationships with combined segmental revenues in
excess of 10% of the total Group revenue. The first park operator
accounted for $10.1m (2020: $5.4m) of Ticketing and Distribution
revenue and for $25.2m (2020: $5.4m) of Guest Experience revenue.
The second park and attractions operator accounted for $11.0m
(2020: $5.0m) of Ticketing and Distribution revenue and for $3.8m
(2020: $0.9m) of Guest Experience revenue.
Another customer within the Guest Experience segment accounted
for $9.3m of Group revenue in 2021 (2020: $7.0m).
8. Tax
The table below provides an analysis of the tax charge for the
periods ended 31 December 2021 and 31 December 2020:
2021 2020
$000 $000
--------- --------
UK corporation tax
Current tax on income for the period 975 352
Adjustment in respect of prior periods (49) (1,031)
--------- --------
926 (679)
Overseas tax
Current tax on income for the period 165 (531)
Adjustment in respect of prior periods (9) 415
--------- --------
156 (116)
Total current taxation 1,082 (795)
--------- --------
Deferred taxation
Original and reversal of temporary difference
- for the current period (10,889) (2,218)
Impact on deferred tax rate changes 84 (255)
Original and reversal of temporary difference
- for the prior period (185) 260
--------- --------
(10,990) (2,213)
--------
Total taxation benefit (9,908) (3,008)
========= ========
The differences between the actual tax charge for the period and
the theoretical amount that would arise using the applicable
weighted average tax rate are as follows:
2021 2020
$000 $000
--------- ---------
Profit/(loss) on ordinary activities before
tax 12,110 (32,862)
Tax at United States tax rate of 24% (2020:
24%) 2,906 (7,887)
Effects of:
Expenses not deductible for tax purposes 142 (89)
Refunds received (11) -
Profit/(loss) subject to foreign taxes
at a lower marginal rate (179) (68)
Adjustment in respect of prior period
- income statement (243) (356)
US R&D credits/other US tax credits - (2,584)
Share options - 224
Impact of rate changes 36 (255)
Deferred tax on US losses (recognised)/not
recognised (12,619) 8,327
(Release)/recognition of uncertain tax
positions 363 (262)
Other (303) (58)
Total tax benefit (9,908) (3,008)
========= =========
Deferred taxation Asset Liability
$000 $000
-------- ----------
Group
At 31 December 2019 8,647 (10,778)
Credited to income (1,007) 3,219
Credited directly to equity 50 -
Foreign Currency translation 11 (21)
At 31 December 2020 7,701 (7,580)
(Charged)/credited to income 7,651 3,339
Credited directly to equity 921 -
Foreign currency translation (13) 5
At 31 December 2021 16,260 (4,236)
-------- ----------
The following table summarises the recognised deferred tax asset
and liability:
2021 2020
Group $000 $000
-------- --------
Recognised asset
Tax relief on unexercised employee share
options 2,042 539
Short-term timing differences 2,767 3,584
Net operating losses & tax credits 11,445 1,728
S163(j) US interest disallowance 6 1,850
-------- --------
Deferred tax asset 16,260 7,701
-------- --------
Recognised liability
Capital allowances in excess of depreciation (1,399) (4,675)
Uncertain tax positions - (509)
Short-term timing differences (935) (456)
Business combinations (1,902) (1,940)
-------- --------
Deferred tax liability (4,236) (7,580)
-------- --------
Group
Unrecognised asset
Net operating losses and available tax
credits - US - 10,752
Unrecognised deferred tax asset - 10,752
---- -------
The tax rate in the US rate remained at 21%, before state taxes.
Deferred tax assets and liabilities were measured at a rate 21%
(2020: 21%) plus state taxes in the US.
A reduction in the UK corporation tax rate from 19% to 17%
(effective 1 April 2020) was substantively enacted on 6 September
2016. The March 2020 Budget announced that a rate of 19% would
continue to apply with effect from 1 April 2020, and this change
was substantively enacted on 17 March 2020.
An increase in the UK corporation rate from 19% to 25%
(effective 1 April 2023) was substantively enacted on 24 May 2021.
This will increase the Company's future current tax charge
accordingly. The deferred tax assets and liabilities at 31 December
2021 have been calculated based on these rates, reflecting the
expected timing of reversal of the related temporary and timing
differences (2020: 19%).
There are no material unrecognised deferred tax assets.
The critical assumptions used in the assessment for the
recognition of the deferred tax asset on US losses and available
tax credits are discussed in note 6.
Taxation and transfer pricing
The Group is an international technology business and, as such,
transfer pricing arrangements are in place to cover funding
arrangements, management costs and the exploitation of IP between
Group companies. Transfer prices and the policies applied directly
affect the allocation of Group-wide taxable income across a number
of tax jurisdictions. While transfer pricing entries between legal
entities are on an arm's length basis, there is increasing scrutiny
from tax authorities on transfer pricing arrangements. This could
result in the creation of uncertain tax positions.
The Group provides for anticipated risks, based on reasonable
estimates, for tax risks in the respective countries in which it
operates. The amount of such provisions can be based on various
factors, such as experience with previous tax audits and differing
interpretations of tax regulations by the taxable entity and the
responsible authority. Uncertainties exist with respect to the
evolution of the Group following international acquisitions holding
significant IP assets, interpretation of complex tax regulations,
changes in tax laws, and the amount and timing of future taxable
income.
Given the wide range of international business relationships and
the long-term nature and complexity of existing contractual
agreements, differences arising between the actual results and the
assumptions made, or future changes to such assumptions, could
necessitate future adjustments to tax income and expense already
recorded.
Uncertainties in relation to tax liabilities are provided for
within income tax payable to the extent that it is considered
probable that the Group may be required to settle a tax liability
in the future. Settlement of tax provisions could potentially
result in future cash tax payments; however, these are not expected
to result in an increased tax charge as they have been fully
provided for in accordance with management's best estimates of the
most likely outcomes.
Ongoing tax assessments and related tax risks
The Group has undertaken a review of potential tax risks and
current tax assessments, and whilst it is not possible to predict
the outcome of any current or future tax enquiries, adequate
provisions are considered to have been included in the Group
accounts to cover any expected estimated future settlements.
In common with many international groups operating across
multiple jurisdictions, certain tax positions taken by the Group
are based on industry practice and external tax advice or are based
on assumptions and involve a degree of judgement. It is considered
possible that tax enquiries on such tax positions could give rise
to material changes in the Group's tax provisions.
The Group is consequently, from time to time, subject to tax
enquiries by local tax authorities and certain tax positions
related to intercompany transactions may be subject to challenge by
the relevant tax authority.
The Group has recognised provisions where it is not probable
that tax positions taken will be accepted, totalling $nil (2020:
$0.5 million) in relation to transfer pricing risks and $0.9m
(2020: $nil) in relation to availability of international R&D
claims.
The US losses recognised in the year were assessed under the
section 382 US tax legislation to validate they can be utilised,
this assessment will need to be conducted on an annual basis to
determine if any restriction is required.
9. Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated by dividing the net
profit attributable to ordinary shareholders, after adjustments for
instruments that dilute basic earnings per share, by the weighted
average of ordinary shares outstanding during the period (adjusted
for the effects of dilutive instruments).
Earnings for adjusted earnings per share, a non-GAAP measure,
are defined as profit before tax before the deduction of
amortisation related to acquisitions, impairment of intangible
assets, acquisition costs, deferred and contingent consideration
linked to continued employment, and costs related to share-based
payments, less tax at the effective rate on tax impacted items.
The table below reflects the income and share data used in the
total basic, diluted, and adjusted earnings per share
computations.
2021 2020
$000 $000
------- ---------
Profit/(loss) attributable to ordinary
shareholders ($000) 22,018 (29,854)
Basic EPS
Denominator
Weighted average number of shares used
in basic EPS (000s) 41,240 35,213
-------
Basic earnings/ (loss) per share (cents) 53.39 (84.78)
======= =========
Diluted EPS
Denominator
Weighted average number of shares used
in basic EPS (000s) 41,240 35,213
Effect of dilutive securities
Options (000s) 1,552 983
Weighted average number of shares used
in diluted EPS (000s) 42,792 36,196
---------
Diluted earnings/ (loss) per share (cents) 51.45 (84.78)
======= =========
The Group made a loss in the year ended 31 December 2020, and
therefore the options and equity settled deferred consideration are
anti-dilutive. As a result, basic and diluted earnings per share
are presented on the same basis for the year ended 31 December
2020.
2021 2020
$000 $000
------- ---------
Adjusted EPS
Profit/(loss) attributable to ordinary
shareholders ($000) 22,018 (29,854)
Adjustments for the period related to:
Amortisation relating to acquired intangibles
from acquisitions 2,371 2,573
Impairment of intangible assets - 2,627
Reversal of impairment of intangible assets (1,707) -
Aborted sale process costs - 462
Deferred and contingent consideration linked
to employment - 150
Share-based compensation and social security
costs on unapproved options 2,490 1,398
------- ---------
25,172 (22,644)
Net tax related to the above adjustments
(2021: 0.8%, 2020: 19.7%): 26 1,291
Adjusted profit attributable to ordinary
shareholders ($000) 25,198 (21,353)
Adjusted basic EPS
Denominator
Weighted average number of shares used
in basic EPS (000s) 41,240 35,213
------------ -------------
Adjusted basic earnings/(loss) per share
(cents) 61.10 (60.64)
============ =============
Adjusted diluted EPS
Denominator
Weighted average number of shares used
in diluted EPS (000s) 42,792 36,196
------------ -------------
Adjusted diluted earnings/(loss) per share
(cents) 58.88 (60.64)
============ =============
37,583 LTIP awards were not included in the calculation of
diluted EPS because their exercise is contingent on the
satisfaction of certain criteria that had not been met as at 31
December 2021 (2020: 81,718).
10. Intangible assets
The cost and amortisation of the Group's intangible fixed assets
are detailed in the following table:
Acquired
Customer internally
relationships developed Patent
& supplier intellectual & IPR Development
Goodwill contracts Trademarks property costs costs Totals
$000 $000 $000 $000 $000 $000 $000
---------- -------------- ----------- ------------- ------- ------------ ---------
Cost
At 31 December
2019 116,790 18,314 1,841 53,021 762 77,850 268,578
Foreign
currency
translation 721 - - 16 21 481 1,239
Additions - - - - - 2,969 2,969
Disposals - - - - - (6,737) (6,737)
At 31 December
2020 117,511 18,314 1,841 53,037 783 74,563 266,049
Foreign
currency
translation (135) - - 9 (4) (53) (183)
Additions - - - - - 720 720
Disposals - (4,737) (1,372) (28,620) - (17,932) (52,661)
At 31 December
2021 117,376 13,577 469 24,426 779 57,298 213,925
---------- -------------- ----------- ------------- ------- ------------ ---------
Amortisation/Impairment
At 31 December
2019 17,403 13,276 1,821 49,408 632 43,582 126,122
Foreign
currency
translation - - - 34 18 463 515
Charged - 882 16 1,675 21 11,425 14,019
Impairment - - - 430 - 2,197 2,627
Charged - - - - - (6,737) (6,737)
Disposal
---------- -------------- ----------- ------------- ------- ------------ ---------
At 31 December
2020 17,403 14,158 1,837 51,547 671 50,930 136,546
Foreign
currency
translation - - - 9 (4) (41) (36)
Charged - 882 1 1,490 28 9,291 11,692
Reversal
of impairment (301) - (484) - (922) (1,707)
Disposal - (4,737) (1,372) (28,620) - (17,929) (52,658)
At 31 December
2021 17,403 10,002 466 23,942 695 41,329 93,837
---------- -------------- ----------- ------------- ------- ------------ ---------
Net book
value
At 31 December
2021 99,973 3,575 3 484 84 15,969 120,088
======== ------ ------ ---- ------- --------
At 31 December
2020 100,108 4,156 4 1,490 112 23,633 129,503
======== ========== ====== ==== ======= ========
Capitalised development costs are not treated as a realised loss
for the purpose of determining the Company's distributable profits
as the costs meet the conditions requiring them to be treated as an
asset in accordance with IAS 38.
Impairment testing of goodwill
The Group is required to test, on an annual basis, whether
goodwill has suffered any impairment or at where indicators of
impairment exist. The recoverable amount is determined based on
value-in-use calculations. The use of this method requires the
estimation of future cash flows and the determination of a discount
rate in order to calculate the present value of the cash flows. The
goodwill balances of the Group are monitored and tested at an
operating segment level, further details on their composition are
set out below.
The carrying amount of goodwill is allocated as follows:
2021 2020
$000 $000
------- --------
Ticketing and Distribution
(CGU1, 2 and 3) * 71,473 71,609
LoQueue (CGU5) ** 28,500 28,500
99,973 100,109
======= ========
* Comprises accesso, LLC, Siriusware, Inc, accesso Passport
trading within Accesso Australia PTY Limited being CGU1, VisionOne
Worldwide Limited & its subsidiaries and accesso ShoWare
trading within Accesso Australia PTY Limited being CGU2 and
Ingresso Group Limited & subsidiaries as CGU 3.
** Comprises the accesso LoQueue trading within accesso
Technology Group plc, Lo-Q, Inc., Lo-Q Service Canada Inc and
Accesso Australia PTY Limited as CGU 5.
The below table sets out the intangible asset impairments
recorded within the Guest Experience and Ticketing and Distribution
segments:
2021 2021 2021 2020 2020 2020
Guest Ticketing Total Guest Ticketing Total
Experience and Distribution Experience and Distribution
$000 $000 $000 $000 $000 $000
Intangible assets - - - - 1,360 1,360
Impairment of specific
development projects* - - - 468 799 1,267
Impairment charge
recorded within
administrative expense - - - 468 2,159 2,627
============ ================== ====== ============ ================== ======
* A review of all project development costs capitalised was performed at year end with no impairment charges recorded. In 2020 an impairment charge of $1.27m was recorded against projects which are no longer considered commercially and technically feasible.
The below table sets out the intangible asset impairment
reversals recorded within the Guest Experience and Ticketing and
Distribution segments:
2021 2021 2021 2020 2020 2020
Guest Ticketing Total Guest Ticketing Total
Experience and Distribution Experience and Distribution
$000 $000 $000 $000 $000 $000
Intangible assets (785) - (785) - - -
Impairment of specific
development projects (922) - (922) - - -
Impairment (credit)
recorded within
administrative expense (1,707) - (1,707) - - -
============ ================== ======== ============ ================== ======
The key assumptions used in the value in use calculations are as
follows, note that CGU 4's inputs have been used for the assessment
of intangible assets other than goodwill:
2021 2020
Pre-tax discount rate (%)
accesso, LLC & Siriusware, Inc. (CGU 1) 13.3% 14.0%
VisionOne Worldwide Limited and its subsidiaries
(CGU 2) 13.3% 14.0%
Ingresso Group Limited and subsidiaries
(CGU 3) 11.6% 11.9%
The Experience Engine (CGU 4) 13.3% 14.0%
LoQueue * (CGU 5) 13.3% 14.0%
Average annual EBITDA growth rate during
forecast period (average %)**
accesso, LLC & Siriusware, Inc. (CGU 1)*** 0.0% 111.1%
VisionOne Worldwide Limited and its subsidiaries
(CGU 2) 22.9% 520.8%
Ingresso Group (CGU 3) 51.6% 55.2%
The Experience Engine (CGU 4) 10.2% -44.4%
LoQueue * (CGU 5) 7.2% 232.6%
Terminal growth rate (%)
accesso, LLC & Siriusware, Inc. (CGU 1) 2.0% 2.0%
VisionOne Worldwide Limited and its subsidiaries
(CGU 2) 2.0% 2.0%
Ingresso Group (CGU 3) 2.0% 2.0%
The Experience Engine (CGU 4) 2.0% 2.0%
LoQueue * (CGU 5) 2.0% 2.0%
Period on which detailed forecasts based
(years)
accesso, LLC & Siriusware, Inc. (CGU 1) 5 5
VisionOne Worldwide Limited and its subsidiaries
(CGU 2) 5 5
Ingresso Group (CGU 3) 5 5
The Experience Engine (CGU 4) 5 5
LoQueue * (CGU 5) 5 5
* Comprises accesso LoQueue trading within accesso Technology
Group plc, Lo-Q, Inc., Lo-Q Service Canada Inc and Accesso
Australia PTY Limited.
**Average EBITDA growth rates for CGU 2 and CGU 3 are high due
to the expected 2022 growth from a poor period of trade in 2021
following the difficult trading conditions faced by the live
entertainment sector, both CGUs earn the majority of their
transactional income from live entertainment which experienced
significant COVID disruption during 2021, therefore both CGUs have
high growth rates in 2022 as they recover towards pre-pandemic
trading levels, followed by more typical growth rates from 2023 to
2026. The 2020 impairment test rates were high as a result of the
recovery from 2020 COVID impacted base levels to 2019 levels in
2022/2023 and a significant business reorganisation during
2020.
***The average EBITDA growth rate for CGU 1 is 0% due to the
exceptional result in 2021 and its impact on the average
calculation. In 2021, transactional revenue rebounded quickly once
COVID related restrictions on attractions were lifted. This sudden
increase in demand arose during a period where the Group did not
have a full cost base following the cost control actions taken
during 2020, resulting in a larger than anticipated EBITDA result.
The forecast period includes the full year impact of the Group
returning to an appropriate cost base and the EBITDA for the CGU
returning to a more typical level. The EBITDA growth rates across
the forecast period for CGU 1 are; 2022: -40%, 2023: +11%, 2024:
+28%, 2025: +1%, 2026: +1%.
Operating margins have been based on experience, where possible,
and future expectations in the light of anticipated economic and
market conditions. Growth rates beyond the formally budgeted period
are based on economic data pertaining to the region concerned.
The discount rates applied to all CGUs was a pre -- tax measure
estimated based on comparable listed company gearing and capital
structures, an equity risk premium and risk-free rate applicable to
the country, small stock premium relative to the market and size of
business and an appropriate cost of debt relative to market
conditions.
Reversal of impairment of The Experience Engine ('TE2')
intangible assets - Cash Generating Unit ('CGU') 4 as at 31
December 2021
As at 31 December 2021 the recoverable value of the TE2 CGU was
significantly improved following a period of strong trading,
improved cost control and efficiency of the CGU. A review was
conducted of the $29.2m of intangible assets impaired in 2019,
updated to 31 December 2021 based on their original useful economic
lives (periods of 2-5 years), to assess each category of asset to
determine if they remain in existence and are generating economic
returns. As a result of this reassessment of the conditions as at
31 December 2021, $0.9m of development costs, $0.3m of acquired
customer relationships and $0.5m of acquired intellectual property
was reversed with a credit of $1.7m to administrative expense. The
recoverable value of the CGU was determined on a value in use basis
using the assumptions and inputs noted above, the $1.707m reversal
is not sensitive to changes in these assumptions due to a
significant amount of headroom in excess of the revised book value
of the TE2 CGU. The recoverable value of the CGU was determined to
be $25.0m as at 31 December 2021.
Sensitivity analysis
If any of the following changes were made to the following key
assumptions the carrying value and recoverable amount would be
equal as at 31 December 2021. A considerable amount of judgement is
applied in setting discount rates, forecasts and terminal values,
all of which will be impacted by the current uncertainty in the
market and the speed at which our customers and the wider macro
markets recover from the impacts of COVID-19.
Ticketing and Distribution* accesso
LoQueue**
2021 2020 2021 2020
Pre-tax discount rate Increase Increase Increase Increase
by 4.6% by 1.1% by 14.3% by 7.5%
EBITDA Growth rate during Reduce by Reduce Reduce by Reduce
detailed forecast period 33.5% by 7.8% 62.2% by 40.0%
(average)
Terminal growth rate Reduce by Reduce Reduce by Reduce
7.5% to a by 1.1% 37.0% to by 8.6%
terminal terminal
rate of -5.5% rate of -35%
Excess over carrying value
($000) $42,843 $10,481 $79,147 $36,138
* Comprises accesso, LLC, Siriusware, Inc., VisionOne Worldwide
Limited & its subsidiaries and Ingresso Group Limited &
subsidiaries and accesso Passport/accesso ShoWare trading within
Accesso Australia PTY Limited (CGUs 1, 2 and 3).
** Comprises the LoQueue trading within accesso Technology Group
plc, Lo-Q, Inc., Lo-Q Service Canada Inc and Accesso Australia PTY
Limited (CGU 5).
We do not consider there are any plausible changes in
assumptions that would give rise to an impairment in Ticketing and
Distribution or accesso LoQueue over the next financial year.
Environmental risk in cash flows
It is expected that air travel will be reduced in response to
both COVID-19 in the near-term and then longer term in response to
climate change agendas, we have considered this risk in our cash
flow forecasting for impairment testing. The majority of the venues
we serve have typically localised customer bases rather than being
reliant on destination travel, consequently we consider the risk as
minimal on our forecasts.
Development costs not yet available for use
Development cost assets not yet available for use reside in the
CGUs as follows and are considered annually for impairment in line
with the goodwill attached to those CGUs. These capitalised costs
relate to development projects which have not been put into use as
at the year-end:
2021 2020
$000 $000
accesso, LLC & Siriusware, Inc. (CGU 1) - 49
accesso Technology Group plc (CGU 5) 386 -
11. Called up share capital
2021 2020
Ordinary shares of 1p each Number $000 Number $000
Opening balance 41,215,291 595 27,642,822 427
Issued in relation to exercised
share options 52,085 1 50,187 1
Issued in relation to deferred
acquisition consideration - - 40,538 1
Issued in relation to the
placing and open offer - - 13,481,744 166
Closing balance 41,267,376 596 41,215,291 595
On 9 June 2020 the Company's shareholders approved the placing,
direct subscription and open offer to issue 13,481,744 new
ordinary shares at GBP2.90p to raise gross proceeds of GBP39.1
million ($48.2 million).
During 2021, 52,085 shares (2020: 50,187 shares) , with a nominal
value $726 (2020: $630), were allotted following the exercise
of share options.
In addition, during 2020, 40,538 shares were issued in respect
of the deferred acquisition consideration to certain employees
of Blazer and Flip Flops Inc for a nominal value of $522.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote
per share at meetings of the Company.
Following the adoption of new Articles of Association on 12
April 2011 the Company no longer has an authorised share capital
limit.
All issued share capital is fully paid as at 31 December 2021.
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END
FR PPUBGWUPPPPG
(END) Dow Jones Newswires
March 22, 2022 03:00 ET (07:00 GMT)
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