Accesso Technology group (LON:ACSO), formerly known as Lo-Q, has just issued a profit upgrade. Proactive Investors (PI) recently spoke to the man in charge, Tom Burnet, to highlight the factors behind the upgrade and the reasons for the name change.
PI: Before we get to the profits upgrade, just explain exactly what it is that Accesso does?
Tom: Accesso does a range of things in support of theme parks and attractions operators round the world. I think, probably, most UK investors know us best for our virtual queuing products. These range from proprietary devices called ‘Qbots’ through to Smartphone systems and wristband systems for use in water parks.
Also, of course, we have a range of other technology based services we provide to operators. We sell many, many, many millions of tickets every year, as a white label service provider to many of the large North American theme park groups. We have a payment gateway that processes literally hundreds of millions, billions indeed, of transactions for our customers.
We also provide mobile content apps. In fact, this year, we got through an important threshold. Last count, two and three quarter million of our apps have been downloaded by consumers.
PI: Okay, that is the full gamut of your business. What has been behind the upgrade that you announced?
Tom: Two things, I think. First of all, we have had a fantastic trading summer in North America. The sun has come out, and consumers have come out to play as a result. Frankly, we have sold more tickets, and we have had a great season with our Lo-Q queuing product set in the parks.
I think also, we have seen super weather in Europe. Everyone will remember quite how ghastly the weather was in Europe last summer. This summer, in June, the sun came out and it stayed out, bless it, and that drove good attendances.
So, I think I would say that all parts of our business have outperformed our expectation, which is fantastic.
PI: Has the US business that you acquired last December now been fully integrated in the group?
Tom: Yes, I would say that is complete now, in terms of integration of the people, of the product sets, and of just the general strategy, and mood, and feel, and key, changing our name, which we also announced, is part of that ongoing integration.
PI: Okay, more on the name change in a minute, but I just want to quickly refer to group revenue, which in the 52-week period just ended was up 29%, roughly in line with forecasts. Where does that figure go from here? Where would you like to see, or reasonably expect, it to go from here?
Tom: Great question. Do you know what? I think less about revenue than I do about profits and cash. Revenue is a blend of a number of things, which frankly are not consistent across the group, in terms of the gross profit that we receive from numbers of our products.
In terms of how I would like the revenue to go? Clearly, I would like it 30% every year. That would be fantastic. I can see routes to continuing to grow our revenue.
However, as I say, I will be focusing more on margin and on cash. Whilst we have reported that margins look like they are going to be something like 48% up, year on year, it would be lovely to continue that momentum, and I would be happy with a little bit less, if we can keep it going indefinitely.
PI: Back to the name. Why the name change?
Tom: I think Lo-Q very well defines a British queuing company, which is where we started life. However, if you are a North American, you do not stand in a queue, you stand in a line. Also, I think I have also rather felt that Lo seems like a slightly negative way to describe your business.
So, with the acquisition of accesso, we just felt accesso was a super, positive, forward looking kind of name. Within our market, within the operators that we work with, accesso have built up a really tremendous brand, which is well recognised and hugely respected.
It feels to me that it can be an umbrella for a bunch of product family names that we will start to create, as we go forward and expand the business.
PI: Well, let us take a look at going forward. What is next? What should investors watch out for?
Tom: Well, I think there is a range of organic and inorganic growth opportunities. I think the first thing that we are looking forward to doing is bringing our accesso Passport range of ticketing and ecommerce products to our customers in Europe. Certainly, those conversations have started. We will see when somebody bites, but we are looking forward to expanding our ticketing business outside North America. Secondly, we have got, again, good traction in our sales pipeline with our queuing products round the world.
I think, also, there will be inorganic growth in our future. As I have been very open about over the last couple of years, we continue to talk to companies that we think might have a good fit with us.
We are very, very fussy about the companies that we are interested in developing conversations with. We are looking for strong management, and companies that make money, and that have a great strategic fit. So that narrows the envelope of people we can talk to, but there are several out there that I think look fantastic, and with whom conversations continue.