Queuing and ticketing software firm accesso Technology Group PLC (LON:ACSO) has already established a foothold in its key markets, which include theme parks, cultural establishments, and live entertainment venues.
However, city broker Peel Hunt is indicating the as yet untapped potential of an additional market, the UK’s festival sector.
Potential revenue and EBITDA uplift from festival-goers
In a note to clients, the broker said that with around 4mln people attending festivals in the UK each year, and with each one spending an average of £126 during the event, the UK in-festival market has a value of around £500mln.
The analysts added that some of the company’s products, such as its smart wristband Prism, could provide the company with an opportunity to disrupt the market segment “in a good way”.
“The cliché about festivals is mud, tents, drunkards and heavy partying, hence the accesso Prism device would be ideal – no need for a mobile phone and it is very robust” the broker said, adding that if the company could persuade 10% of the circa 4mln festival goers to spend £25 on the device it could potentially generate £8mln in revenue.
Analysts also said that “Capturing a portion of the 4mln UK festivalgoers would be a decent revenue and EBITDA uplift for accesso", and that despite the shares looking expensive compared to its peers, the group’s forecast 2017/20 compound annual growth rate (CAGR) of 34.5%, compared to its competitors on 14.1%, meant they were happy with their ‘Buy’ rating on the stock with a target price of 3,100p.
Strong start to 2018
The company has already seen a strong start to 2018 with several new agreements and a move into US markets that has seen its share price rise over 30% since January.
The AIM-listed ticketing and queuing software provider said the signing of a “significant” contract with Henry Ford Health System in March 2018 marked a bold new step and reflected the ability to radically improve the digital guest journey irrespective of end-market or industry vertical.
The firm also announced a five-year extension to its existing agreement with the Cedar Fair Entertainment Company, one of the world’s largest regional amusement resort operators, to provide the Accesso Passport ecommerce solution across all of its properties.
accesso also says it is continuing to grow beyond its traditional markets, with the expansion of its Ingresso system into the US, which it says has significant potential and would allow new and existing accesso clients to connect to an ever-expanding network of distribution channels.
The firms’ ShoWare arm also signed an agreement with the 2018 Special Olympics USA Games for ticketing at its opening ceremony in July, as well as forming a partnership with Marriott International's Gaylord Hotels to provide its fully integrated ticketing platform to the hotel chains’ events.
At last close on 17 August, accesso shares were trading at 2,660p, a 14% discount to the broker’s target price, giving it a market cap of around £720mln.