Access Intelligence Regulatory News (ACC)

ACCESS INTELLIGENCE PLC

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

Access Intelligence Plc, (AIM: ACC) the technology innovator delivering Software-as-a-Service ("SaaS") solutions for the global marketing and communications industries, is pleased to announce its unaudited half year results for the six months ended 31 May 2023.

Highlights:

As outlined in its trading update of 22 June 2023, the Group has continued to make progress against its strategic objectives, most importantly delivering its first six-month period of Annual Recurring Revenue ("ARR") growth in the APAC region since the acquisition of Isentia, alongside continued ARR growth in the EMEA & NA market:

· The Group's ARR increased by £1.4 million1 in the period, demonstrating a significant increase in momentum in ARR growth across the Group when compared to ARR growth of £0.5 million1 in H1 2022. Each individual region contributed to the ARR growth during the first half.

· Total revenue for the period was £31.3 million (H1 2022: £32.7 million) with 95% of revenue being recurring (H1 2022: 93%).

· The Group delivered Adjusted EBITDA2 in the period of £2.0 million (H1 2022: £0.3 million), a year-on-year increase of £1.7 million.

· As a result of the actions taken over the last two years to optimise the business for profitable growth and free cash flow generation, the Board anticipates the delivery of higher adjusted EBITDA and cash generation in the second half in line with full year expectations.

Christopher Satterthwaite, non-executive Chairman, commented:

"As outlined in June, Access Intelligence has delivered a significant increase in ARR growth1 during the first half of the year. This growth has been observed in all global regions serviced, and for the first time since the acquisition of Isentia, there has been ARR growth in the APAC region.

The full release of the Group's next generation platform into the APAC market during the next few months provides a considerable opportunity for accelerated growth. Both existing and potential customers in the region will be able to benefit from Access Intelligence's market-leading technology, positioning the Group well for further expansion. In the EMEA and North America region, growth has been sustained with a focus on providing a wider range of the Group's products to both new and existing customers at higher average order values.

The Board continues to focus on improving profitability and cash generation. Several cost optimisation initiatives have already been implemented and there will be continued emphasis on delivering a lean operating model as the Group continues to grow.

Overall, the Board is pleased with the progress being made and remains confident in the outlook for the Group in the second half of the year and beyond."

1. On a constant currency basis

2. Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation and adjusted for share based payments, share of losses of an associate and non-recurring expenses primarily relating to acquisition, integration and restructuring costs in respect of Isentia.

For further information:

Access Intelligence plc 020 3426 4024

Joanna Arnold (CEO) / Mark Fautley (CFO)

finnCap Limited (Nominated Adviser and Broker) 020 7220 0500

Corporate Finance:

Marc Milmo / Fergus Sullivan

Corporate Broking:

Alice Lane / Sunila de Silva

Chairman's statement

I am pleased to announce our unaudited interim results for the six months ended 31 May 2023.

In an increasingly noisy world, being relevant and distinctive has gone beyond a nice to have, it's become a survival strategy. For marketers and communicators, the only way to stay relevant is by knowing their audience.

But what we used to call audiences has fundamentally changed: the internet and the end of mass media and linear media consumption has fragmented audiences, going from mass fan bases to a multiplicity of niches, and from cultural moments to cultural movements. This poses a significant challenge for marcomms professionals.

Access Intelligence harnesses the digitalisation of audiences to make audience intelligence more accessible to organisations of all kinds and all sizes. By powering the world's leading audience intelligence platform that harnesses rich data sets, artificial intelligence and human minds, the Group's customers can tap into the most nuanced and actionable insights on their customers, markets, and society.

Continued growth in EMEA & North America

The Group's business in the EMEA and North America markets has demonstrated sustained growth, delivering an increase in ARR of £1.1 million in the period and with total regional ARR reaching £30.5 million at 31 May 2023. The business continues to build a good pipeline in the region, including a number of significant strategic opportunities. Whilst these more strategic opportunities have a longer sales cycle than the majority of the Group's pipeline, they represent some of the most interesting use cases for Access Intelligence's technology and insights offerings. They also reflect the longer-term market opportunity for Access Intelligence to increase average order values by signing up a greater proportion of new business sales from larger, more technical contracts using a wider range of the Group's product offering.

New client wins in EMEA and North America include: Basis Technologies, the British Fashion Council, Carnival, the Delegation of the European Union to the United Kingdom, Dentsu, the English Football League, Havas, HM Land Registry, The Insolvency Service, Iris Worldwide, Matalan, Mayborn Group, McCann, The National Lottery Heritage Fund, The National Trust, the Office of the Children's Commissioner, Ofgem, Penguin Random House, Punch Taverns, Sayara International, Student Loans Company, and Tate & Lyle.

First ARR growth delivered in APAC

In APAC there has been positive momentum with the region delivering ARR growth of £0.3 million1 in the period, with total regional ARR of £29.3m at 31 May 2023. By comparison, ARR had declined by £0.7 million1 in the first half of FY2022.

The first six months of the current financial year are the first period of ARR growth delivered in APAC since the acquisition of Isentia in September 2021 and reflect the stabilisation of the business in the region as it has been integrated into the wider Group. There has been strong engagement with customers and there remains a considerable opportunity to continue to combine Isentia's established media monitoring and insights services in the region alongside Access Intelligence's audience intelligence offering. This return to growth in the region has been delivered ahead of the release of the Group's fully integrated next generation platform into the market in the next few months.

The Group has won a number of new clients (including client win backs) in the region during the first half, including: CBRE, the Department of Employment & Workplace Relations, the Department of Fire and Emergency Services, the Department of Health and Aged Care, FIFA, Mecca Brands, Merlin Entertainments, Mercedes, New Zealand Rugby, Senate of the Philippines, Tesla, Uluru Dialogues and University of Canberra.

Optimisation of the Group's operations

A key focus throughout 2023 and beyond is to ensure that the Group has a stable, profitable and cash generative core business as the platform from which to grow in all serviced global regions. Management continuously seeks to optimise the Group's operational structure, supported by the delivery of substantial synergies as part of the integration of Isentia into the Group alongside other cost reduction initiatives. Recurring administrative expenditure has reduced by approximately 11% year on year from £24.1 million in H1 2022 to £21.4 million in H1 2023, with non-recurring costs incurred during the first half to achieve this reduction.

In addition to focussing on improved profitability, the Group's invoicing profile is changing in certain regions leading to an enhancement in its working capital management. Contract liabilities have increased by £2.8 million year on year as a greater proportion of customer contracts are invoiced annually in advance with the associated benefit to cash flow. This is expected to continue in the second half alongside further growth in profitability.

Results for the half year

The primary key performance indicator monitored by the Board is the growth in ARR year-on-year. This reflects the annual value of new business won, together with upsell into the Company's existing customer base as it delivers against its land and expand strategy, less churn. It is an important metric for the Group as it is a leading indicator of future revenue.

During the period, the Group's ARR grew by £1.4 million1 (H1 2022: £0.5 million1). ARR at 31 May 2023 was £59.8 million, comprising £30.5 million in EMEA and North America and £29.3 million in APAC.

Revenue for the period was £31.3 million (H1 2022: £32.7 million), with recurring revenue comprising 95% of total revenue for the period (H1 2022: 93%).

EMEA & North America revenue increased by £1.0 million year on year to £13.6 million (H1 2022: £12.6 million) as a result of ongoing ARR growth in the region. Recurring revenue comprised 98% of total EMEA & North America revenue in the period (H1 2022: 95%).

APAC revenue declined by £2.4m year on year to £17.7 million (H1 2022: £20.1 million) due to the combined effect of the reduction in ARR in FY22 being reflected in revenue in the period and a reduction in non-recurring campaign revenue. Recurring revenue comprised 92% of total APAC revenue in the period (H1 2022: 90%) with non-recurring revenue being lower in FY23 due to customers running fewer one-off campaigns given wider macro-economic conditions.

The Group delivered a gross margin of 75% in the period (H1 2022: 75%) despite the lower year on year revenue due to synergies achieved on infrastructure and data feeds, alongside reduced variable costs of sale.

Adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA") were £2.0 million (H1 2022: £0.3 million). Adjusted EBITDA excludes certain non-recurring expenses totalling £3.8 million for the period (H1 2022: £1.4 million), in addition to the Group's share of loss of an associate of £0.1 million (H1 2022: £0.1 million) and a share-based payments charge of £0.5 million (H1 2022: £0.6 million).

Non-recurring items in the period included restructuring and migration costs in respect of the Isentia acquisition of £3.6 million (H1 2022: £0.9 million) and legal costs in respect of Australian copyright of £0.2 million (H1 2022: £0.4 million). Reported EBITDA loss was £2.5 million (H1 2022: loss of £1.7 million).

The Group has continued to increase investment in its software platforms with identifiable new product development activity being capitalised. The Group capitalised development costs of £4.2 million for the period (H1 2022: £3.5 million), with a further £1.1 million (H1 2022: £1.4 million) of product, research and development costs being expensed through profit and loss.

The Group's operating loss was £6.0 million (H1 2022: loss £7.4 million). The Group incurred £3.5 million of depreciation and amortisation charges (H1 2022: £5.7 million).

The basic loss per share was 6.29p (H1 2022: loss 1.50p).

The Group held cash at the end of the period of £2.7 million (H1 2022: £9.3 million). It does not currently have a loan facility in place but will continue to evaluate options for this during the second half.

Outlook

During the first half of 2023, Access Intelligence has focused its activities in two key areas: continued advancement of its market leading products including the release of the Group's next generation platform into the APAC region; and refinement of the Group's operating model to improve EBITDA margins and free cash flow conversion.

The ongoing investment in products and operations will provide customers across all regions with a fully integrated offering that goes beyond media monitoring and social listening to deliver deep audience intelligence.

This enhanced offering supports the continued scaling of the business through improved sales and renewals and is expected to result in increased average order values as a greater number of customers take a wider suite of the Group's products and services. This trend has been clear over recent years with Access Intelligence's largest customer in 2018 generating revenue of £60k, whereas the Group now has over 150 customers with annual contract values exceeding £50k and a significant number with annual contract values exceeding £100k.

The ARR growth delivered by the Group during the first half is expected to contribute to higher revenue in the second half, whilst the Group's pipeline also continues to grow with a number of strategic opportunities expected to close during Q3.

Access Intelligence's ongoing efforts to optimise its operating model have already resulted in a significant reduction in year on year recurring administrative expenses and costs of sale. These efforts will continue as the Group's technology is made available to all customers globally in a fully integrated platform.

Overall, the Board is pleased with the progress being made and remains confident in the outlook for the Group in the second half of the year and beyond.

Christopher Satterthwaite

Non-executive Chairman

Access Intelligence Plc

Consolidated Statement of Comprehensive Income

for the six months ended 31 May 2023

Access Intelligence Plc

Consolidated Statement of Financial Position

at 31 May 2023

Access Intelligence Plc

Consolidated Statement of Changes in Equity

for the six months ended 31 May 2023

Access Intelligence Plc

Consolidated Statement of Cash Flow

for the six months ended 31 May 2023

Notes

1. Unaudited notes

Basis of preparation and accounting policies

The financial information for the six months to 31 May 2022 is unaudited and was approved by the Board of Directors on Monday 3rd July 2023.

The interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended 30 November 2022.

The interim financial information for the six months ended 31 May 2023, including comparative financial information has been prepared on the basis of the accounting policies set out in the last annual report and accounts.

The preparation of the interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may subsequently differ from those estimates.

In preparing the interim financial statements, the significant judgements made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same, in all material respects, as those applied to the consolidated financial statements for the year ended 30 November 2022.

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

Going concern assumption

The Group meets its day to day working capital requirements through its cash balance but also maintains relationships with a number of financial institutions and believes that, should it be required, it would be able to put in place an appropriate working capital facility. It did not have a bank loan or overdraft at 31 May 2023 and had a net cash balance of £2,670,000.

Consequently, after making enquires, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis of accounting in preparing the interim financial statements.

Information extracted from the Group's 2022 Annual Report

The financial figures for the year ended 30 November 2022, as set out in this report, do not constitute statutory accounts but are derived from the statutory accounts for that financial year.

The statutory accounts for the year ended 30 November 2022 were prepared under IFRS and have been delivered to the Registrar of Companies. The auditors reported on those accounts. Their report was unqualified, did not draw attention to any matters by way of emphasis and did not include a statement under Section 498(2) or 498(3) of the Companies Act 2006.

2. Revenue

The Group's revenue is primarily derived from the rendering of services. The Group's revenue was generated from the following territories:

3. Earnings per share

The calculation of earnings per share is based upon the loss after tax for the respective period. The weighted average number of ordinary shares used in the calculation of basic earnings per share is based upon the number of ordinary shares in issue in each respective period.

The impact of share options granted under the company's share option scheme are anti-dilutive due to the Group being in a loss-making position, so the weighted average number of ordinary shares used in the calculation of diluted earnings per share is the same as for basic earnings per share.

This has been computed as follows:

4. Availability of interim results

The interim results will not be sent to shareholders but will be available at the Company's registered office at The Johnson Building, 79 Hatton Garden, London, EC1N 8AW and on the Company's website: www.accessintelligence.com.