Accesso Technology Group Regulatory News (ACSO)

22 March 2022

accesso® Technology Group plc

("accesso" or the "Group")

PRELIMINARY RESULTS FOR THE YEAR ENDED 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

Footnotes:

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

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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.

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.

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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:

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:

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:

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 ShoWareSM 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

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.

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:

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

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.

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, £18m 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 £18m loan facility.

At 31 December 2021 the Group has cash of $64.1m and an available undrawn loan facility of £18m. 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 MacDonaldChief Financial Officer

21 March 2022

Consolidated statement of comprehensive income

for the financial year ended 31 December 2021

All activities of the Company are classified as continuing

Consolidated statement of financial position

as at 31 December 2021

Consolidated statement of cash flow

for the financial year ended 31 December 2021

Consolidated statement of changes in equity

for the financial year ended 31 December 2021

Notes to the consolidated financial statementsfor 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

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:

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 £18m loan facility.

At 31 December 2021 the Group has cash of $64.1m and an available undrawn loan facility of £18m. 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

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

Employee benefits

Share-based payment arrangements

Pension costs

Property, plant and equipment

Inventories

Deferred tax

Current income tax

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.

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:

Financial liabilities

The Group treats its financial liabilities in accordance with the following accounting policies:

Employee benefit trust (EBT)

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

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

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:

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:

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.

(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 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: