30 new venue contracts and pipeline remains strong

FY24 results, released last month, were in line with its January trading update. Revenues grew by 5.3%, when excluding discontinued components, while cash EBITDA eased by 3.4% to $22.8m to reflect a margin of 15.0%. Management is cautious on the near-term outlook due to uncertainties over the impact of trade wars on consumer sentiment. We have cut our revenue forecasts by 4% in FY25 and 6% in FY26 to reflect this uncertainty. However, costs also fall and FY26 adjusted EPS moves higher in USD terms. In spite of the opportunities, the shares trade on a modest 12x our FY27E earnings, supported by a strong balance sheet.

• Strategy: accesso’s purpose is to partner with venue operators worldwide to deploy technology solutions that enhance guest experiences and optimise venue revenue. accesso is the clear leader; no competitor has the breadth of solutions, customer base or geographical reach that accesso can offer.
• FY24 results: Group revenue grew by 1.9%, or 0.5% at constant currencies, to $152.3m, and adjusted operating profit rose by 13.1%, to $21.1m, reflecting cost discipline. accesso won 30 new venue contracts in 2024 and its pipeline remains strong. The group finished the year with $25.9m in adjusted net cash.
• Valuation: The stock trades on 14x our forecast earnings in FY25, falling to 13x in FY26 and to 12x in FY27. In addition, accesso has a strong net cash position and healthy cash generation with a free cashflow yield of ca.6.6% in FY25E. Further, the quality of revenues is improving, with 85.5% repeatable.
• Risks: The pandemic highlighted risks associated with the global leisure industry. However, the downturn was less than feared and drove accelerated digital transformation. Customer concentration is declining as the customer base expands: four flagship customers now generate less than half of revenues.
• Investment summary: accesso is a unique investment proposition in an ever-declining UK software universe as peers continue to be snapped up by industry buyers and private equity. The stock rebased following the 2018 sell-off and pandemic and now trades at substantially more value-oriented levels, supported by improved cash generation. accesso sizes its total addressable market at $2.3bn, giving it a ca.5.6% market share and with plenty of scope for growth.