TIDMACC
RNS Number : 5509T
Access Intelligence PLC
21 July 2020
ACCESS INTELLIGENCE PLC
("Access Intelligence", the "Company" or the "Group")
INTERIM RESULTS
Access Intelligence (AIM: ACC), the technology innovator
delivering Software-as-a-Service ("SaaS") solutions for the PR,
communications and marketing industries, announces its unaudited
half year results for the six months ended 31 May 2020.
Highlights:
-- The Group's first half revenue increased by approximately 52%
to GBP9.4 million (H1 2019: GBP6.2 million).
-- Excluding Pulsar, which was acquired in H2 2019, revenue
increased by 10% to GBP6.8 million.
-- Annual Contract Value ("ACV") base increased by GBP1.06
million (12% annualised) to GBP19.1 million (H1 2019: growth of
GBP0.5m to GBP12.9 million).
-- The Group delivered an Adjusted EBITDA* loss in the period of
GBP147,000 (H1 2019: profit of GBP379,000) which includes the
effects of IFRS 16 from 1 December 2019 (which resulted in an
increase in Adjusted EBITDA* of GBP393,000 for the period).
-- Excluding the loss contributed during the period by Pulsar, Adjusted EBITDA was GBP573,000.
-- At 31 May 2019, cash balance was GBP2.65 million (H1 2019:
GBP1.76 million and FY 2019: GBP2.0m).
-- The Group's robust response to COVID-19 disruption prevented
a possible impact on client service, product development or the
Company's sales and marketing capabilities.
-- COVID-19 response measures included GBP1.1m of cost savings
of which GBP1.0m will be realised in H2 2020.
-- Acquisition of Pulsar combined with investment in technology
has strengthened the product portfolio opening up new global
markets and sector opportunities that will secure growth into H2
and beyond.
Christopher Satterthwaite, non-executive Chairman,
commented:
"Against a backdrop of global economic disruption prompted by
COVID-19, the resilience shown by the Group in delivering revenue
growth of 52% to GBP9.4m with ACV increasing by 12% to GBP19.1m has
been demonstrated. The strength of the Group operating model, its
technological capability and exceptional customer service are
making it the 'go to' software group for the PR, communications and
marketing industries. While the second half of the year will
present challenges with continuing uncertainty on the timing of new
sales, the expanded product portfolio including Pulsar provides
resilience and the board remain confident in the long term growth
opportunities available to the Group as we continue to seek new
sector and territorial opportunities."
* Adjusted EBITDA is earnings before interest, tax, depreciation
and amortisation and adjusted for share based payments, share of
losses of an associate and non-recurring expenses primarily
relating to the acquisition and integration of Pulsar in the
current period and ResponseSource in the prior period.
For further information:
Access Intelligence plc 020 3426 4024
Joanna Arnold (CEO) / Mark Fautley (CFO)
finnCap Limited (Nominated Adviser and Broker) 020 7220 0500
Corporate Finance:
Marc Milmo / Kate Bannatyne / Matthew Radley
Corporate Broking:
Alice Lane / Sunila de Silva
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ("MAR"). With the publication of this announcement,
this information is now considered to be in the public domain.
Chairman's statement
I am pleased to announce our unaudited interim results for the
six months ended 31 May 2020.
In the first half of 2020, the Group increased revenue by 52% to
GBP9.4million while delivering double digit ACV growth in its
existing Vuelio and ResponseSource brands, and 18% ACV growth in
newly acquired Pulsar.
As an audience intelligence and social listening platform and
acquired in October 2019, Pulsar has expanded the Group's
portfolio, opening up new product, territorial and sector
opportunities and providing resilience against market volatility.
While the acquisition has reduced the Group's gross margin and
Adjusted EBITDA in the short term due to planned investment in
sales and marketing to scale the business and leverage its fixed
data costs, this investment has enabled Pulsar to deliver 18%
annualised growth during the period.
The acquisition continues to contribute to the overall growth
potential of the Group which combines technologies that provide
real-time, actionable insights from consumer trends, media
commentary, political and stakeholder engagement to improve
reputation management and marketing effectiveness.
The progress delivered by the Group during the period is a
testament to the underlying resilience of the Group given the
impact the COVID-19 crisis has had on the global economy which has
been seen in the slowing of the Group's sales cycles and an
increase in client financial vulnerability.
The Group reacted quickly to mitigate the impact, firstly by
protecting the safety of employees by enabling secure remote
working that ensured lockdown had no impact on client service,
product development or sales and marketing. At the same time, the
Group completed a comprehensive review of costs to identify and
implement measures, including taking advantage of government
support such as the job retention scheme, that are expected to
realise over GBP1.1m of savings in the current financial year, with
GBP1.0m of this benefit in the second half. These precautionary
measures taken are expected to minimise the potential negative
impact of COVID-19 on the Group's performance in the current
financial year, especially given the uncertainty that remains for
the second half of the financial year. Of these savings, it is
anticipated that GBP0.1m will flow through into the next financial
year where further opportunities for cost reduction continue to be
evaluated.
Alongside the robust underlying performance amongst the Group's
existing client base, the period also saw new business success
across the Group with clients added including global brands
spanning the public, private and charity sectors. New client wins
included Aegon, Allen & Overy, Astra-Zeneca, Chanel, the
Co-operative Group, Lotus, Ministry of Justice, Nintendo, OFGEM and
the WWF. In the USA, Pulsar won new clients including Dow Jones,
the International Monetary Fund, Levi Strauss and Twitter. The wins
reflect the strength of the improved and expanded product
portfolio.
Looking ahead, the Directors remain confident about the
longer-term growth opportunity as the Group continues to actively
pursue new business opportunities and capitalise on opportunities
to improve retention, realise cost synergies and enhance margin.
Particularly, the functionality and data set that Pulsar adds to
the Group will unlock value and accelerate growth by expanding the
potential of the underlying technology and its benefit to PR,
communications and marketing industries.
However, the confidence in outlook for the Group has to be set
against the impact of COVID-19 on the market. In particular this
has had inevitable effect on the rate of new business wins as
potential new customers put certain projects on hold and delayed
investing in new technology products. This slow down in new
business wins has meant that, despite further ACV growth of GBP0.3
million in June 2020, the Group's new sales were approximately 19%
behind the Board's expectations at 30 June 2020. This uncertainty
means that whilst the resilience and strength that the business
demonstrated in the first half has been very satisfactory, with the
Board encouraged by the recurring nature of the Group's revenue (H1
2020: 94%), the Group's ability to generate new business in line
with our original 2020 expectations remains unclear.
Given the nature of the Company's SaaS based recurring revenue
model, the Group's ability to deliver against its pipeline of sales
opportunities will prove key as we look forward to the next
financial year, as the Group's run rate revenue at the year-end
will be an important indicator to the outlook. Notwithstanding the
current environment, I remain confident in the long-term growth
opportunities available to the Group as we continue to seek to open
new sector and territorial opportunities.
Results for the half year
A key financial metric monitored by the Board is the growth in
the ACV base year-on-year. This reflects the annual value of new
business won, together with upsell into the Company's existing
customer base as it delivers against its land and expand strategy,
less any customer losses. It is an important metric for the Group
as it is a leading indicator of future revenue.
During the period, the Group's ACV base grew by GBP1.06 million
(12% annualised) to GBP19.1 million (H1 2019: growth of GBP0.45m to
GBP12.9 million). Vuelio and ResponseSource ACV grew by 10%
annualised in the period whilst Pulsar ACV grew by 18%
annualised.
Revenue for the period grew by 52% to GBP9.4 million (H1 2019:
GBP6.2 million). The year-on-year increase was primarily driven by
the Pulsar acquisition, plus the growth in ACV delivered by Vuelio
and ResponseSource during the second half of the 2019 financial
year and the first half of 2020. GBP6.8 million of revenue in the
period related to Vuelio and ResponseSource (10% growth) and GBP2.6
million related to Pulsar. Recurring revenue comprised 94% of total
revenue (H1 2019: 98%).
Gross profit from continuing operations increased by 42%
year-on-year to GBP6.65 million (H1 2019: GBP4.68 million) with the
Group delivering a gross margin of 71% (H1 2019: 76%). Gross margin
was diluted compared to the prior period due to higher fixed data
costs in Pulsar. Excluding the impact of Pulsar, gross margin
increased to 77% for the period.
Adjusted earnings before interest, tax, depreciation and
amortisation ("EBITDA") were a loss of GBP147,000 compared to a
profit GBP379,000 in H1 2019. Adjusted EBITDA for the period
comprises an Adjusted EBITDA profit of GBP573,000 delivered by the
Group excluding Pulsar, offset by Pulsar's Adjusted EBITDA loss of
GBP720,000. The impact of the Group's adoption of IFRS 16 from 1
December 2019 has resulted in an improvement in Adjusted EBITDA for
the period of GBP393,000 (H1 2019: GBPNil).
Adjusted EBITDA excludes certain non-recurring items totalling
GBP730,000 for the period (H1 2019: GBP662,000), in addition to the
Group's share of loss of an associate of GBP74,000 (H1 2019:
GBP92,000) and a share-based payments charge of GBP46,000 (H1 2019:
GBP21,000).
Non-recurring items in the period included transition and
migration costs in respect of acquisitions of GBP730,000 (H1 2019:
GBP662,000). It is not anticipated that the transition and
migration costs in respect of acquisitions will continue into the
financial year ended 30 November 2021. Reported EBITDA loss from
continuing operations was GBP997,000 (H1 2019: loss of
GBP396,000).
The Group increased its investment in the Vuelio and Pulsar
platforms with identifiable new product development activity being
capitalised. The Group capitalised development costs of GBP958,000
for the period (H1 2019: GBP1,048,000), with a further GBP782,000
(H1 2019: GBP408,000) of product, research and development costs
being expensed through profit and loss.
The Group's operating loss from continuing operations was
GBP2,683,000 (H1 2019: loss GBP1,383,000). The Group incurred
GBP1,686,000 of depreciation and amortisation charges (H1 2019:
GBP987,000).
The basic loss per share was 3.91p (H1 2019: loss 2.36p).
The Group held cash at the end of the period of GBP2,647,000 (H1
2019: GBP1,762,000).
Christopher Satterthwaite
Non-executive Chairman
Access Intelligence Plc
Consolidated Statement of Comprehensive Income
for the six months ended 31 May 2020
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31-May-20 31-May-19 30-Nov-19
Continuing operations GBP'000 GBP'000 GBP'000
Revenue 9,379 6,159 13,429
Cost of sales (2,733) (1,478) (3,395)
--------------- --------------- -----------
Gross profit 6,646 4,681 10,034
Recurring administrative expenses (6,793) (4,302) (9,229)
--------------- --------------- -----------
Adjusted EBITDA (147) 379 805
Non-recurring administrative expenses (730) (662) (1,777)
Share of loss of associate (74) (92) (201)
Share-based payments (46) (21) (63)
--------------- --------------- -----------
EBITDA (997) (396) (1,236)
Depreciation of tangible fixed assets (430) (47) (169)
Amortisation of intangible assets
- internally generated (525) (428) (840)
Amortisation of intangible assets
- acquisition related (731) (512) (854)
--------------- --------------- -----------
Operating loss (2,683) (1,383) (3,099)
Gain arising on acquisition - - 298
Financial income 2 - 2
Financial expense (187) (58) (95)
--------------- --------------- -----------
Loss before tax (2,868) (1,441) (2,894)
Taxation credit 48 - 734
--------------- --------------- -----------
Loss for the period (2,820) (1,441) (2,160)
Other comprehensive income - - -
--------------- --------------- -----------
Total comprehensive loss for the
period attributable to the owners
of parent company (2,820) (1,441) (2,160)
--------------- --------------- -----------
Earnings per share:
Basic loss per share (3.91)p (2.36)p (3.44)p
Diluted loss per share (3.91)p (2.36)p (3.44)p
Access Intelligence Plc
Consolidated Statement of Financial Position
at 31 May 2020
Unaudited Unaudited Audited
As at As at As at
31-May-20 31-May-19 30-Nov-19
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 15,880 14,188 16,143
Investments in associates 43 226 117
Property, plant and equipment 860 170 884
Right of use asset 2,405 - -
Deferred tax asset 21 37 21
----------- ----------- ---------
Total non-current assets 19,209 14,621 17,165
----------- ----------- ---------
Current assets
Trade and other receivables 6,429 4,344 7,737
Current tax receivables 617 362 995
Cash and cash equivalents 2,647 1,762 2,001
Total current assets 9,693 6,468 10,733
----------- ----------- ---------
TOTAL ASSETS 28,902 21,089 27,898
----------- ----------- ---------
Current liabilities
Trade and other payables 4,941 2,037 3,807
Accruals 836 1,162 1,206
Provisions - 171 -
Deferred revenue 8,105 6,749 7,935
Lease liabilities 277 - -
Interest bearing loans and
borrowings 12 139 23
Total current liabilities 14,171 10,258 12,971
----------- ----------- ---------
Non-current liabilities
Provisions 213 - 213
Lease liabilities 2,626 - -
Interest bearing loans and
borrowings - 840 -
Deferred tax liabilities 595 609 643
----------- ----------- ---------
Total non-current liabilities 3,434 1,449 856
----------- ----------- ---------
TOTAL LIABILITIES 17,605 11,707 13,827
----------- ----------- ---------
NET ASSETS 11,297 9,382 14,071
----------- ----------- ---------
Equity
Share capital 3,961 3,204 3,961
Treasury shares (148) (148) (148)
Share premium 17,242 13,135 17,242
Capital redemption reserve 191 191 191
Share option valuation reserve 457 369 411
Other reserve 502 - 502
Retained earnings (10,908) (7,369) (8,088)
----------- ----------- ---------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY SHAREHOLDERS 11,297 9,382 14,071
----------- ----------- ---------
Access Intelligence Plc
Consolidated Statement of Changes in Equity
for the six months ended 31 May 2020
Share
Share Treasury Share Capital option Other Retained Total
capital Shares premium redemption valuation reserve earnings
account reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 December
2018 3,189 (148) 13,075 191 348 - (5,928) 10,727
Total comprehensive
income for the
period - - - - - - (1,441) (1,441)
Exercise of
share options 15 - 60 - - - - 75
Share-based
payments - - - - 21 - - 21
At 31 May 2019 3,204 (148) 13,135 191 369 - (7,369) 9,382
-------- --------- -------- ----------- ---------- -------- ---------- --------
Total comprehensive
income for the
period - - - - - - (719) (719)
Issue of share
capital 757 - 4,107 - - - - 4,864
Share-based
payments - - - - 42 - - 42
Arising on acquisition - - - - - 502 - 502
At 30 November
2019 3,961 (148) 17,242 191 411 502 (8,088) 14,071
-------- --------- -------- ----------- ---------- -------- ---------- --------
Total comprehensive
income for the
period - - - - - - (2,820) (2,820)
Share-based
payments - - - - 46 - - 46
At 31 May 2020 3,961 (148) 17,242 191 457 502 (10,908) 11,297
-------- --------- -------- ----------- ---------- -------- ---------- --------
Access Intelligence Plc
Consolidated Statement of Cash Flow
for the six months ended 31 May 2020
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31-May-20 31-May-19 30-Nov-19
GBP'000 GBP'000 GBP'000
Loss for the year attributable
to shareholders (2,820) (1,441) (2,160)
Adjustments for:
Taxation (48) - (734)
Depreciation and amortisation 1,686 987 1,863
Share option charge 46 21 63
Share of loss of associate 74 92 201
Financial income (2) (2)
Financial expense 187 58 95
Gain arising on acquisition - - (298)
Operating cash outflow before
working capital changes (877) (283) (972)
Decrease/(increase) in trade and
other receivables 1,408 (698) (1,790)
Increase/(decrease) in trade and
other payables 1,171 (1,362) (864)
----------- ----------- ---------
Net cash inflow/(outflow) from
operations 1,702 (2,343) (3,626)
Tax received 378 - -
----------- ----------- ---------
Net cash inflow/(outflow) from
operating activities 2,080 (2,343) (3,626)
----------- ----------- ---------
Investing
Interest received 2 - -
Acquisition of PPE (118) (49) (856)
Acquisition of software licences (34) (48) (56)
Cost of software development (958) (1,048) (2,337)
Acquisition of Pulsar - - (43)
Loan to associate (100) - -
----------- ----------- ---------
Net cash outflow from investing
activities (1,208) (1,145) (3,292)
----------- ----------- ---------
Financing
Interest paid (187) (125) (124)
Repayment of loans (11) - (918)
Lease liabilities paid (28) - -
Issue of shares - - 4,521
Exercise of share options - 75 140
Net cash outflow from financing
activities (226) (50) 3,619
----------- ----------- ---------
Net increase/(decrease) in cash 646 (3,538) (3,299)
Opening cash and cash equivalents 2,001 5,300 5,300
----------- ----------- ---------
Closing cash and cash equivalents 2,647 1,762 2,001
----------- ----------- ---------
Notes
1. Unaudited notes
Basis of preparation and accounting policies
The financial information for the six months to 31 May 2020 is
unaudited and was approved by the Board of Directors on 20 July
2020.
The interim financial statements do not include all of the
information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements for the year ended 30 November 2019.
The interim financial information for the six months ended 31
May 2020, including comparative financial information has been
prepared on the basis of the accounting policies set out in the
last annual report and accounts, with the exception of IFRS 16
Leases, and in accordance with International Financial Reporting
Standards ("IFRS"). The Group has initially adopted IFRS 16 Leases
from 1 December 2019.
The objective of IFRS 16 is to ensure a single lease accounting
model and for lessees to recognise assets and liabilities for all
leases with a term of more than 12 months, unless the underlining
asset is of low value. The Group has applied the modified
retrospective approach and measured the lease liability based on
the remaining lease payments, discounted using the incremental
borrowing rate as of the date of initial application. Right of use
assets have been measured at an amount equal to the lease
liability, adjusted by the amount of any prepaid or accrued lease
payments.
The Group has elected to apply the standard to contracts that
were previously identified as leases applying IAS 17 and IFRIC 4.
The Group has also elected to use the exceptions proposed by the
standard on lease contracts for which the lease term ends within 12
months as of the date of initial application, and lease contracts
for which the underlying assets are low value.
The Group applies the standard to a portfolio of leases with
similar characteristics, since it is reasonably
expected that the resulting effect is not materially different
from applying the standard on a lease-by lease basis.
On transition to IFRS 16 on 1 December 2019, the Group
recognised a GBP2,693,000 right-of-use asset, along with a
corresponding lease liability of GBP2,930,000. During the period
the Group recognised a credit of GBP393,000 to administrative
expenses, a depreciation charge of GBP289,000 and a financial
expense of GBP175,000 related to IFRS 16. As such, the application
of IFRS 16 has resulted in an increase in EBITDA of GBP393,000, a
reduction in operating loss of GBP104,000 and an increase in loss
before tax of GBP71,000.
In addition, the application of the standard has resulted in an
increase in cash flows from operating activities of GBP203,000 and
an increase in cash outflows from financing activities of
GBP203,000.
The preparation of the interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expense. Actual results
may subsequently differ from those estimates.
In preparing the interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and key sources of estimation uncertainty were the same,
in all material respects, as those applied to the consolidated
financial statements for the year ended 30 November 2019.
The Group has elected to present comprehensive income in one
statement.
Going concern assumption
The Group meets its day to day working capital requirements
through its cash balance. It does not have
a bank loan or overdraft, although did have an other loan of
GBP12,000 at the period end.
As a result of the market uncertainty due to the ongoing
COVID-19 situation, the possible impact on
available cash during the next 12 months' trading has been
modelled. The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the
Group should be able to operate within its existing cash
deposits.
Consequently, after making enquires, the Directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis of
accounting in preparing the interim financial statements.
Cost of sales
Cost of Sales comprises third party costs directly related to
the provision of services to customers. During
the prior year the Group changed the classification of certain
employee salary costs which in previous years had been disclosed
within Cost of Sales. As a result, GBP418,000 of staff costs that
had previously been disclosed within Cost of Sales in the Income
Statement for the six months ended 31 May 2019 have been
reclassified to Administrative expenses.
Information extracted from the Group's 2019 Annual Report
The financial figures for the year ended 30 November 2019, as
set out in this report, do not constitute statutory accounts but
are derived from the statutory accounts for that financial
year.
The statutory accounts for the year ended 30 November 2019 were
prepared under IFRS and have been delivered to the Registrar of
Companies. The auditors reported on those accounts. Their report
was unqualified, did not draw attention to any matters by way of
emphasis and did not include a statement under Section 498(2) or
498(3) of the Companies Act 2006.
2. Earnings per share
The calculation of earnings per share is based upon the loss
after tax for the respective period, for continuing operations
only. The weighted average number of ordinary shares used in the
calculation of basic earnings per share is based upon the number of
ordinary shares in issue in each respective period.
The impact of share options granted under the company's share
option are anti-dilutive due to the Group being in a loss-making
position, so the weighted average number of ordinary shares used in
the calculation of diluted earnings per share is the same as for
basic earnings per share.
This has been computed as follows:
6 months 6 months 6 months 6 months Year Year
ended ended ended ended ended ended
31-May-20 31-May-20 31-May-19 31-May-19 30-Nov-19 30-Nov-19
----------- ----------- ----------- ----------- ---------- ----------
Basic Diluted Basic Diluted Basic Diluted
----------- ----------- ----------- ----------- ---------- ----------
Loss after
tax (GBP'000) (2,820) (2,820) (1,441) (1,441) (2,160) (2,160)
----------- ----------- ----------- ----------- ---------- ----------
Number of
shares ('000)* 72,180 72,180 60,981 60,981 62,740 62,740
----------- ----------- ----------- ----------- ---------- ----------
Loss per
share (pence) (3.91) (3.91) (2.36) (2.36) (3.44) (3.44)
----------- ----------- ----------- ----------- ---------- ----------
3. Availability of interim results
The interim results will not be sent to shareholders but will be
available at the Company's registered office at The Johnson
Building, 79 Hatton Garden, London, EC1N 8AW and on the Company's
website: www.accessintelligence.com .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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