Accesso Technology Share Discussion Threads

[rivaldo] 21/2/2018 09:01

Good news last night - Six Flags beat forecasts for their Q4 results, and they say they're "very well-positioned to deliver another record year in 2018":



Here are the full results:



There's a conference call transcript here, which has very positive implications for ACSO as it:

(1) specifically mentions Flash Pass as one of the growth drivers for in-park revenues
(2) highlights the "large-scale" fast growth opportunity for acquisition of and growth in water parks in their portfolio:

"We can have multiple water parks in each of our markets and there are dozens of potential opportunities and it is highly accretive to earnings."

(3) focuses on near-term growth opportunities in China, Dubai, Vietnam, Mexico etc etc

[spud] 19/2/2018 16:38

Strange1 - Bitter_and_Twisted.....?

spud

[dan_the_epic] 19/2/2018 13:37

Indeed it is lol. But as I'm not a shareholder I couldn't possibly consider that!

What's the revenues here once you take out park support revenues?

[strange1] 19/2/2018 13:17

Just catching up on this. Percy Pig, that is one hell of a story. Were you involved with the business at some point? Do you still hold and do you believe it a good stock at the current price?

[strange1] 19/2/2018 13:01

D the E. FCF yield is getting worse by the day! Try doing some total shareholder return calculations and see if that gives you a better answer

[strange1] 19/2/2018 12:53

Anybody sense a few axes being grinded here?

[dan_the_epic] 19/2/2018 10:37

Good reply and nice to hear I'm not miles off the rails ;0)

[itchycrack] 19/2/2018 10:19

And don't forget Accesso have one of the best management teams around.
They promise, and they deliver. Period.

[carcosa] 19/2/2018 10:15

Dan_the_Epic. I have been invested for just a couple of years now. What you say is absolutely correct. However, as you probably are more than aware markets have been valuing companies based upon high revenue growth accomplishments and future potential. 'Real' profits are (until value investing comes back into fashion) somewhat unimportant - heresy I hear you say!

The thing about ACSo is that they have truly been expanding at a fast rate. Unlike other companies such as Boohoo or Fevertree is that competition is limited (if it exists!), ACSO can address a worldwide market, can enter into relatively new fields of business. Therefore potential revenue growth over the next few years is as assured as it can ever be. Last year in particular was a year of heavy R&D to position the company for 2019 and beyond. Further acquisitions can be expected. All of this has the recipe of being a total disaster; how many companies have we seen sink under the weight of intangibles accruing and then being written off...

For now, the market, including myself, see the disaster scenario as being some way off. My belief is that this will be a million pound mkt cap company in 2-4 years; subject to general market risks. But profits....mmmm not yet as it is still in a major growth phase.

[dan_the_epic] 19/2/2018 09:56

Helpful to have some contrary viewpoint percey. I've never ever found a share where all is smelling like roses :0)

Problem I have with that profit metrics rivaldo is that 2 thirds of r and d is capitalised which is very high.

Anyone read the Berenberg note?

[rivaldo] 19/2/2018 09:45

Berenberg note that their initial 2700p target has upside to 3800p, given ACSO's firepower for M&A plus the potential for margin increases:

Http: //www.proactiveinvestors.co.uk/companies/news/191642/berenberg-sees-20-upside-potential-for-accesso-technology-as-it-starts-coverage-with-a-buy-191642.html

"Berenberg sees 20% upside potential for accesso Technology as it starts coverage with a ‘buy’
13:04 14 Feb 2018

Berenberg's analysts pointed out that accesso's end-to-end technology stack combined with its global footprint positions the group well in a market that is fragmented by product, geography and vertical

German bank Berenberg has initiated coverage on accesso Technology Group PLC (LON:ACSO) with a ‘buy’ rating and a price target of 2,700p, offering over 20% upside potential to the shares which are currently trading at 2,230p each.

In a note to clients, Berenberg’s analysts noted that accesso is the leading provider of virtual queuing, ticketing and point-of-sale (POS) solutions for the global leisure industry.

They pointed out that this end-to-end technology stack combined with the AIM-listed group's global footprint positions the group well in a market that is fragmented by product, geography and vertical.

The analysts said: “We believe this will allow accesso to take market share in its core theme park market, but also expand in the broader leisure industry where it has less penetration. We believe these factors will continue to drive double-digit organic revenue growth over the coming years.”

They added: “Coupled with the capacity to consolidate its fragmented industry and a scalable business model, we believe accesso can grow to multiples of its current size on a multi-year view.”

The Berenberg analysts noted that since 2012, accesso has delivered a compound average growth rate (CAGR) of 12% in organic revenue.

They believe that level of growth is sustainable as accesso’s breadth of solutions and depth of intellectual property will, in their view, allow it to: 1) continue to take share in the large US theme park market, 2) capitalise on the increasing investment in the Asian theme park market and 3) continue expanding its addressable market by entering new high-value verticals, such as live events, festivals, sport and cultural activities.

The analysts said: “Given these opportunities, and with the leisure market as a whole increasingly adopting digital supply chain and ecommerce solutions, we believe accesso will continue to deliver at least double-digit organic growth over the coming years.

As such, they forecast a 13% organic revenue CAGR for 2018-2020.

Material margin growth expected

The analysts also said they believe accesso’s software as a service (SaaS)-based revenue share model will drive material margin growth over the coming years.

They added: “This model requires accesso to bear the upfront implementation costs, reducing contract margins at the outset, but with ongoing costs largely fixed and with growing contract revenues, we would expect margins to naturally increase over time.”

The Berenberg analysts said while their base case already models EBIT margins to expand to 16%-18% in 2018-2020, they believe EBIT margins of 17%-21% in 2018-2020 and 30%-plus by 2025, are achievable.

They added that this upside scenario would increase their 2018-2020 EBIT estimates for accesso by 4%-15%, and add +700 basis points to their base-case discounted cashflow-based price target.

M&A also offers material upside

The analysts also pointed out that M&A offers material upside for the group, with accesso having spent around US$170mln on five acquisitions since 2012.

They added that with more than US$120mln of balance sheet firepower estimated over 2018-2020, they believe that accesso will likely use M&A to accelerate growth in new verticals and geographies. They said their analysis indicates that M&A could deliver 30%-plus earnings upgrades for accesso over 2018-2020 and add up to 1,100 points to their base-case DCF price target."

[helpaargh] 19/2/2018 09:45

Breakout

Finals 21st March

[perceypig] 19/2/2018 09:41

Dan_the_epic

For a company that doesn't generate much cash, as you say they, their top brass seem to be very generously compensated - big bonuses, salary and I'm sure a very generous share and expense account
It would be interesting to know how many of the 471k shares find their way to the workers compared to how many end up in the new CEO's pocket.
Just a thought ........

pp

[dan_the_epic] 19/2/2018 09:28

Smart and fair point though value is very subjective

Entertainment one brings back bad memories hence why I'm so interested in the cash flow

[aimingupward2] 19/2/2018 09:17

I very much doubt if a new, experienced, high flyer, CEO would be joining an overvalued company due for a share price fall.

[dan_the_epic] 19/2/2018 09:14

In my mind this stock is either cheap for the potential and a buy or very expensive and a short. Not sure there is a middle ground here so trying to work out which is which

[itchycrack] 19/2/2018 09:06

Dan_the_Epic - if you don't want to invest here then don't - it's really that simple.
Trying to change the minds of the long termers here is a total waste of time.

The mere fact you raise this issue leads me to believe you either don't really understand market dynamics or you're just bored. Either way if I were you I'd just stick my money in the bank to be safe :-)

Meanwhile......looks like we're heading for another ATH! :-)

[dan_the_epic] 19/2/2018 09:00

But that's the question really - do they have to run at that current rate to maintain their position? Say they can slash it and run at 10% of sales in the long run. Cash flow yield then looks like 1.5% ish. Most software companies are at 3.5 to 5% for growth of high single digits

[greyingsurfer] 19/2/2018 08:52

Stripping back capex when a company is having to spend a lot to stand still is probably worth doing. However, to start complaining about a rapidly growing company that is doing so on the back of that reinvestment seems pretty perverse.

[dan_the_epic] 19/2/2018 08:14

But that's not true. It's expected to generate free cash of 7 billion dollars this year

How can you say there's nothing more to say? The cash generation here is atrocious and every small company I've seen with bad cash flow eventually gets found out when financial statements are published like ETO, TCM etc. Why are you telling me that this time it will be different?

Strip back stock options and CAPEX and the market cap here looks mental, a multiple more mental than Amazon

[itchycrack] 19/2/2018 07:59

Amazon has been around for over 20+ years, and barely makes any money, yet have you seen the trajectory of the share price over the past 20+ years? Nothing more to say.

[dan_the_epic] 19/2/2018 07:56

Rivaldo thoughts on FCF mate? I'm stuck at this stumbling block

[rivaldo] 19/2/2018 07:27

Wonderful news flow whilst I was away on hols....

(1) Berenberg initiated with a Buy and 2700p target. Berenberg are a sizeable and highly respected German investment bank

(2) Cedar Fair have renewed for another 5 years across ALL of their properties, i.e a big vote of confidence in ACSO. The City love this guaranteed, recurring income, and is one big reason why they love ACSO

(3) The President and CEO of IAAPA will succeed Steve Brown as CEO. This has to be the most impressive and heavyweight appointment ACSO could possibly have announced! And it's evidently amicable as Steve is continuing to advise for a further year.

The comment from the new appointee was most intriguing imo:

"Paul Noland commented:

"I'm thrilled to be joining Accesso at such an exciting time in its development. The Accesso team has built a fantastic business and I look forward to bringing my experience to bear in driving it forward.

My background across the industry gives me a full sense of the opportunity Accesso has before it, and with the combination of outstanding technology and fantastic people already in place, I'm full of excitement about the future."

Which suggests that there is much excitement still to come here. TB's aim of shaking up the entire ticketing and entertainment sector looks like it has some way to run yet.

[dan_the_epic] 19/2/2018 07:21

I'd be concerned that this should already be chucking off cash as it's the market leader. If it can't do it now what makes you think it can down the road?

The clear concern is that valuation support is a fraction of the current price here if they have a bad quarter as the adjusted EPS is way way way lower if you expense the R&D.

What's the attraction of buying this? The tech can be good but if it doesn't actually make much money back into the bank for shareholders.... I can easily go out and buy a stock with 4 or 5 per cent free cash yield. This struggles to make 1 point 5 per cent on my calculations