accesso provides technology solutions to the global leisure and attractions industry, servicing more than 1,200 venues across 34 countries. While the share price slumped from late 2018 and bottomed during the pandemic, the group is now on a new footing. Following a five-year break, the company has made four acquisitions to help drive fresh momentum. These acquisitions add functional breadth to the offering as well as increased geographical spread. The company has a unique business profile and a leading market position, supported by healthy cash generation and a strong balance sheet. Despite the recent rally, at 15x our FY26e earnings, the rating remains well below the heady days of 2014-18.
- 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 and no competitor has the breadth of solutions, customer base or geographical reach that accesso can offer.
- FY23 results: Revenue grew by 6.3%, at constant currencies, to $149.5m, and adjusted operating profit rose by 8.2%, to $18.6m. Net cash position slipped by $33.2m, to $31.5m, after a net outflow of $50.0m on acquisitions while operating cash generation was strong. accesso does not pay a dividend.
- Valuation: The stock trades on 20x our forecast earnings in FY24, falling to 17x in FY25 and 15x in FY26. In addition, accesso has a strong net cash position and healthy cash generation with a free cashflow yield of ca.5.4%. Further, the quality of revenues is improving, with 84% repeatable.
- Risks: The pandemic highlighted a risk associated with the global leisure industry. However, the downturn was less than feared and drove accelerated digital transformation. Customer concentration is declining as customer base expands and five 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 have been 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.5.9% market share and with plenty of scope for growth.
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