Accesso Technology Group Plc (LON:ACSO) is the topic of conversation when Hardman & Co’s Analyst Richard Jeans caught up with DirectorsTalk for an exclusive interview.
Q1: Richard, could you just remind us what Accesso Technology Group actually does?
A1: Accesso is the leading technology provider to the global leisure and attractions industry, serving more than 1200 venues worldwide. Its purpose is to partner with leisure attraction operators worldwide to deploy solutions that enhance guest experience and optimise revenue. The group’s offerings include ticketing, virtual queuing and guest experience management systems for theme parks, museums, ski resorts and live entertainment venues.
Q2: Now you’ve recently published a report. What were the highlights from your 40-page note?
A2: Results for 2024 were broadly in line with the expectations that were given back in January. The group signed 30 new venue contracts in 2024, up from 28 in 2023, and the pipeline remains strong. However, management is cautious on the near-term outlook due to insurgencies over the impact of trade wars on consumer sentiment.
Nevertheless, the company still expects a cash EBITDA margin in line with or slightly ahead of consensus. The stock trades at modest multiples, around 13 times 2027 earnings, and is supported by net cash and improving cash generation. Recent acquisitions bolster its product suite and its market reach, and in our view, they are well positioned for growth in its $2.3 billion addressable market.
Q3: So, how has the company been performing?
A3: Last year, revenues increased by 5.3%, that’s excluding the discontinued components and adjusted operating profit rose by 13%, driven by cost control and new venue wins. Revenue quality continued to improve, its transactional revenue increased by 2.5% and the total repeatable revenue is on a rising trend, which is 85.5% of the total group revenue, up from 84.2% in 2023 and 83.5% in 2022. Customer concentration continued to decline, with the group’s top two customers representing just over 34% in 2024 and down from just over 37% in 2023.
The 2025 outlook reflects a cautious stance amid the ongoing macroeconomic challenges and new uncertainties tied to the US trade policy and tariffs. That makes visitor attendance harder to predict, despite strong overall demand for technology solutions. Nevertheless, we note that in previous downturns, some of the group’s customers have shown resilience, where there is a high level of attendees when attendees live locally or regionally and often hold season passes.
So, we note that three quarters of revenue are transactional in nature and therefore sensitive to visitor attendance figures.
Q4: How is the strategy evolving?
A4: Following recent acquisitions that have broadened the group’s international footprint, the focus now is on strengthening the group’s global commercial operation, realigning resources, and go-to-market strategy to more comprehensively address the expanded range of solutions within its global market reach. This includes expanding the group’s international sales force, which currently there are only three international salespeople, two in Europe and one in Asia-Pacific.
Q5: Has the group announced another acquisition?
A5: In early May, the group announced its fifth acquisition since the pandemic in One Risk, which provides cloud-based online liability waiver and incident risk management data technology for the leisure and recreation industries. A liability waiver is a legal document which one party agrees not to hold another party legally responsible for potential risks or damages that may occur during an activity or event or use of the service. This is therefore an important service to be able to offer for group’s customers.
The One Risk liability waiver application is called One Waiver. It is the market-leading solution for the ski resorts across North America and while the initial focus is on the North American ski resort market, it has the potential to be extended into other verticals or geographies in the future.
Q6: How have your forecasts changed?
A6: We cut our revenue forecast very slightly by 4% in 2025 and 6% in 2026. However, we also cut core administration expenses. Consequently, our cash EBITDA forecast increased slightly in 2025 but fell by 4% in 2026. Earnings per share figures rose in both years with the help of share buybacks. However, 2026 EPS flattened in Sterling terms due to the strengthening of the pound against the US dollar.
Q7: Are there any notable risks that we should be aware of?
A7: Accesso Technology Group’s top four customers generate just under half of group revenues. However, this concentration has been declining, and the group is constantly expanding its customer base. The annual report shows that the top two customers generated 34.4% of revenue in 2024, that was down from 37.1% in 2023. The group also has high exposure to the US, which was 58% of 2024 revenues, down from 64% in 2023. The North American exposure has been declining as the group continues to expand internationally.
Q8: Finally, what are your thoughts on the company in terms of an investment case?
A8: Accesso is a unique investment operation in an ever-declining UK software universe. Its peers continue to be snapped up by industry buyers and private equity. The stock price is rebased following the 2018 sell-off and the pandemic and now trades at substantially more value-oriented levels. It’s supported by cash generation, improved cash generation. The company sizes its addressable market at around $2.3 billion, giving it a market share below 6% and therefore there is plenty of scope for growth.
