Accesso Technology - Covid-19 Business Update
(the "Group" or "Company")
Covid-19 Business Update
· Extensive cost mitigation actions taken in line with reduced revenue: monthly operating cost run rate reduced by
· Current liquidity supports operations into autumn, with
· Focus on standing ready to enable customers when they commence a gradual return to operations;
· Group in constructive discussion with existing credit provider re increasing liquidity headroom as well as giving full consideration to additional funding options.
"My priorities at this time are to ensure the health and safety of our accesso team; to reinforce our financial resilience and flexibility; to maintain the operational readiness of our business platform; and to ensure we keep focused on our long-term strategy for success. Having started the year strongly, we are now acting decisively to manage our cost-base while this situation endures. We have sufficient liquidity in place to manage a range of forward-looking scenarios, and we are considering further options to ensure the Company is fully prepared should the impacts extend beyond the range of our current expectations."
Covid-19 Impact Assessment
The Covid-19 pandemic has struck the Group's served markets severely, leading to disruption across all geographies including our key North American market. While this is a challenging situation for our customers, we believe the great majority will rebound strongly, being leaders in their respective markets with significant latent demand and strong long-term customer propositions.
Most of the theme parks, attractions, and other venues in our client portfolio are regional in nature, meaning their visitors live within a short distance of the venue. A visit does not require significant advance planning, air travel or hotel accommodation. This means demand for these venues is likely to rebound strongly even if visitors are required to stay close to home and will likely increase as individuals seek leisure activities with their friends and families following an extended period of isolation.
The impact of current events on our full year trading outlook remains heavily dependent on how soon attractions are able to reopen and the speed with which visitor volumes recover. We are in close dialogue with our customers around their plans and expect that many theme parks and other attractions will begin to reopen throughout the summer, most likely on a staggered basis and operating initially at reduced capacities. However, this is clearly not entirely within the control of venue operators and accordingly we are planning conservatively to ensure we can withstand less favourable scenarios.
Cost mitigation actions taken
The Group has taken swift and decisive action to reduce its operating cost base in cash terms since the start of the crisis. The staffing expense reductions detailed below, combined with reduced discretionary spending including travel, marketing, and tradeshows, and the permanent closure of our
While the Group both recognises and seeks to mitigate the personal toll of lowering staffing levels, its significant ability to flex operating costs relative to expected changes in revenue remains an important lever in its efforts to manage its business through this time. Total staffing costs, inclusive of taxes and benefits, represented approximately 76% of the Company's overall operating expenses in 2019.
As announced in our preliminary results of
· Lowering headcount by 23 full-time positions and 4 independent contractor roles;
· Permanently closing an additional 14 open roles;
As our clients began implementing closures and postponing scheduled season opens, the Group immediately commenced measures on 16 March to adjust operations alongside anticipated reduction in revenues including:
· Implementing a 20% pay reduction via a 4-day work week for most of our staff;
· A 20% reduction in remuneration for the Group's directors until further notice.
In recognition of the outlook worsening into the summer, we have now taken further cost action, including:
· Lowering headcount by a further 29 full-time positions and 26 independent contractor roles;
· Placing roughly half of our remaining staff on furlough;
These staffing changes are significant and represent a material reduction from the 568-headcount level at the end of 2019. Wherever possible we have utilised available government programmes in both the
As clients begin plans to resume operations, staffing levels will be recalled at appropriate levels.
Trading and liquidity position
accesso started the 2020 financial year trading ahead of the Board's expectations, with a promising sales pipeline and a renewed focus on long-term success. With the return of former CEO
As a result of the various closures and postponements, transactional revenues, which in 2019 comprised approximately 73% of our total revenue, fell to close to zero and professional services have reduced as our customers seek to conserve cash. Ongoing revenue consists primarily of support, maintenance and license fees as well as recurring platform fees and the remaining professional services work. As of this update, revenues for the month of April are expected to be down by 72% year-on-year.
As announced in the 2020 Preliminary Results, the Group's net cash position at the end of
While the Board continues to monitor liquidity carefully in the context of the fast-evolving circumstances, we consider that alongside our aggressive mitigating actions our existing facility gives us sufficient liquidity to support operations through summer and into the autumn period, assuming a nominal level of activity from mid-summer onward.
If the pandemic persists further, additional operational adjustments may be made to further reduce operating costs, and expanded financing may be needed. To that end we are currently in constructive discussions with our debt provider to ensure that any necessary covenant waivers are granted and potentially to increase our available liquidity, whether under the COVID Larger Business Loans Scheme or otherwise. We are diligently evaluating all other options to ensure the Company is fully prepared should the impacts extend beyond the range of our current expectations and further to ensure the Company is adequately positioned for the future beyond this crisis.
Today the Group announced the appointment of
For further information, please contact:
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+44 (0)118 934 7400
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+44 (0)20 7260 1000
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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 more than 30 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 educate 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.
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 understands 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
information visit www.accesso.com. Follow accesso on Twitter, LinkedIn and Facebook.
This information is provided by RNS, the news service of the
Quick facts: Accesso Technology Group PLC
Market Cap: £121.59 m
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