Accesso Technology Group PLC (AIM:ACSO, OTC:LOQPF) chief executive Steve Brown spoke to Proactive's Stephen Gunnion after the provider of queuing technology in the leisure, entertainment and cultural sectors issued an upbeat 2023 trading update.
Accesso told investors revenues grew by 6% last year to US$148.5 million with cash EBITDA in line with expectations at a margin of not less than 15%.
Brown said the company delivered on its promises, meeting profit expectations and achieving significant milestones, including the completion of three strategic acquisitions.
Stephen Gunnion (SG): It looks like 2023 was another year of positive results for accesso.
Steve Brown (SB): It was a fantastic year, and I'm pleased with our results. We shared our preliminary results in September, and we had very high expectations for the second half of the year.
We're really pleased that we delivered on that, meeting our overall expectations and our profit numbers. In addition, we've had some really big wins throughout the year, and even starting off strong in 2024.
I think for 2023, we checked the box; we delivered exactly as we promised. And we're off and running now in 2024.
SG: You say in the press release that you met your financial targets, even after investing in new products.
SB: That's right. In addition, we completed three acquisitions in 2023, which, of course, had some level of expense associated with them, just getting those done and integrating the teams.
But we've also invested significantly in our existing products, notably accesso Freedom, which is our food and retail platform. We were finishing up development on that product, which we launched in November. So, we had quite a big investment across the year, something around $4 million in 2023, towards finishing that product. It is now on sale to the market; we've signed three customers, and we have a relatively robust sales pipeline ahead of us for that product as well.
So, in addition to delivering on our numbers, we invested significantly across our product set and completed three acquisitions. I couldn't be happier to be reporting the results for 2023.
SG: You noted big contract wins, notably accesso Horizon, with a multi-year project in Saudi Arabia.
SB: Yes, we acquired a company called VGS in the summer of 2023, and that product has now been rebranded as accesso Horizon.
We're really pleased to announce on Monday that we have a major win with a new customer in Saudi Arabia. I can't share the details yet, but that will be forthcoming. However, it's a relatively large win for us for accesso Horizon, and importantly, sets the flag down for us in the Middle East in quite a big way.
We already have an office in Dubai with a full team supporting some of the other VGS customers. But this one in Saudi Arabia really is a game-changer for us in terms of that region.
In our presence, there's a tremendous amount of development happening on the entertainment side in Saudi Arabia. So winning this customer was really important for us.
SG: Are you planning any further expansion beyond the Middle East?
SB: We’re always looking to expand, and our focus on everything outside of the US is really important to us. We have a solid presence in the US, very well penetrated with huge customers. We have Merlin, of course, which gives us a footprint across many countries around the world, serving 140 venues from Ireland to countries all over the place.
But we're really focused on the APAC region, across Europe, across the Middle East. We now have offices in Dubai and Singapore, with a full team on the ground in Australia. So for us, it's really about global growth as we go forward, looking for those opportunities like the one in Saudi Arabia, where there's great scale and really great opportunity for us in other regions.
SG: You provided a little bit of guidance for 2024. You expect revenue growth of around 9%, a cash EBITDA down margin of at least 17%. Obviously, another strong year expected then?
SB: Absolutely. We're very focused on our margin, which has been a priority for us. Not only are we looking at our operational efficiency, but we're also examining our revenue streams, especially those that were less productive, or even just pass-through revenue, where we handle things on customers' behalf but don't really make any money from that revenue.
We've been working very diligently over the last couple of years to identify these and devise strategies to shift those operational needs, either back to the customer or change the operating model around how we handle those types of opportunities.
So, it's really about improving the quality of our revenue. Not all revenue is created equal; some revenue is much higher profit than others. In our case, we had some revenue coming through that actually had zero profit.
So, we're aiming to fine-tune that and enhance our operational efficiency and our bottom line margin. You've seen some of this in 2023. I think you'll see more of it in 2024 and beyond. But that is a big priority as we aim to achieve a 20% plus cash EBITDA margin in the midterm.”