Ticketing technology provider accesso Technology (LON: ACSO) remains up for sale and remains in talks with more than one potential purchaser. There could be news by the end of September.
AIM-quoted accesso has grown via acquisition and it needs to bring all those acquisitions on to one platform in order to make the most of the deals. That is being done, but the performance is being held back while the customers wait for the updated offer.
The first customers are being put on the new platform, but there appears some way to go until it is properly rolled-out. This won’t be completed until 2021.
It was not a surprise that there was a decline in the performance in the first half. Revenues slipped from $54.4m to $50.7m, which was slightly worse than expected. The previous year had one-off revenues of $6.2m. Even so, for a company that is still on a pretty high rating this outcome is poor.
Repeatable revenues, including transactional income, are nearly are nearly four-fifths of the first half total. New parks and leisure facilities are being added to the customer base.
An interim loss was reported and even after adjustments the pre-tax profit declined from just over $10m to $3.3m. Management makes much of the lower than expected integration costs reducing the decline.
Full year revenues for accesso are expected to be between $118m and $121m.which represents little growth on the previous year. For the following two years, low-to-mid-single digit percentage growth is anticipated, but after that double digit growth is anticipated with repeatable revenues contributing 90% of the total.
Development spending is expected to be lower than previously forecast at $33m and the same level of spending is expected next year. More than $20m of that is likely to be capitalised by accesso. The group will be hard pressed to generate the cash to fully cover that spending.
Net debt was $15.2m at the end of June 2019. The bank facility reduces to $30m at the end of March 2020.
This year’s pre-tax profit will be well down on the $24.4m made in 2018. The share price slumped 105p to 805p on the day of the results. That is less than one-third of the share price less than one year ago.
Even after this fall accesso is valued at more than £220m. The decline in sterling can’t stop the prospective multiple being well above 20. Any bidder offering significantly more than the current share price would be taking a lot on trust. It would have to be confident that the integration will be a success and sharply improve performance.
Management talks about a $3.4bn market that is available to accesso and it has been a successful company. The rating got out of hand and it could not sustain it.
Showing that the combined platform for the products is a success is important for the business. That could mean that bids may not be deemed to be high enough to reflect the promise and accesso could remain independent.
There should be further clarity on the position by the end of the month.