Interim Results

12 December 2024

4GLOBAL plc

("4GLOBAL" or "the Company")

Interim Results

Increase in gross profit driven by early success in North America and transition to higher margin products

4GLOBAL, a provider of data and technology for sports, fitness and wellness organisations to optimise operational and investment decisions, announces its interim results for the six months ended 30 September 2024.

Financial Results:

Strategic Highlights:

Current Trading & Outlook:

Eloy Mazon, 4GLOBAL CEO, said:

"The key achievement in H1 was the strong start we made in shifting our focus to North America, the region where we see the most profitable long-term opportunities. The potential for growth in the US is substantial, offering a compelling combination of high data maturity and low penetration of solutions like ours. Working closely with our partners there, we are building commercial momentum while increasing awareness of 4GLOBAL, laying the groundwork for further expansion in this key market.

"More broadly, we continue to build on the progress made in prior years, delivering on our strategic objectives to achieve scalable growth, operational efficiency, and resilience in a dynamic market. The demand across our target markets for actionable data and insights to make better business decisions is growing at pace. With a powerful offering, outstanding references and a clear strategy, we are well positioned to capitalise and look to the future with confidence."

1Adj. EBITDA is Adjusted EBITDA, defined as statutory profit from operations before interest, taxation, depreciation, share based payment expense, foreign exchange losses and exceptional items.

2ARRR is annual recurring and repeatable revenue. Recurring revenue is revenue generated from subscriptions, licenses or multi-year recurring fee agreements (typically Insight Solutions and Insight Platforms) and is calculated on all license agreements. Repeatable revenue is revenue generated from multiple opportunities from a client which create a predictable, consistent revenue stream year on year (typically Insight Lab). For the purposes of qualifying as repeatable revenue the client must have a minimum history of three years of generating revenue.

3Market expectations refer to analyst forecasts for FY 25 of £7.6m in revenue, £1.9m in adjusted EBITDA and £1m in cash at year-end.

Investor Presentation

Eloy Mazon, Chief Executive Officer, and Stuart Wooller, Group Finance Director, will host a live investor presentation and Q&A today at 11am via the Investor Meet Company platform.

The remote session is open to all existing and potential shareholders. Questions can be submitted at any time during the presentation.

Investors can sign up for free and add to meet 4GLOBAL via:

https://www.investormeetcompany.com/4global-plc/register-investor

Contacts

About 4GLOBAL

4GLOBAL empowers sports, fitness and wellness organisations to make faster, smarter decisions about their operations, customers and investments through data and actionable insights.

It operates the largest sport participation and facility database in the world, with more than 4 billion data points.

Sourcing data from health & fitness operators, community programmes and other structured activities through its DataHub while drawing on information from GPS location updates and wearable devices, 4GLOBAL's unique combination of data assets provides a holistic view of physical activity patterns. 

4GLOBAL is at the forefront of predictive modelling and advanced analytics, with the insights it generates empowering customers to drive efficiencies, improve customer relationships and make more informed strategic decisions.

Its customers span both the public and private sectors, including central and local governments, cities, sporting bodies, trade associations, health & fitness operators and sports clubs.

Key markets include North America, the Middle East and Europe. Its headquarters are in London with offices in Miami and Istanbul.

4GLOBAL was founded in 2002 and listed on AIM in 2021 under the ticker 4GBL.

CEO's Review

The Company has made a solid start to the year, delivering against our strategic objectives and building on the strong foundations laid to underpin our long-term growth ambitions. We are beginning to see the rewards of our transition to focus on North America, and have made good progress in improving the quality of our revenues and strengthening our financial position.

Improved margins, stable cash and strong H2 revenue weighting expected

Performance remains heavily weighted to the second half of the year due to budget seasonality in our end markets. Total revenue for H1 at £1.7m was broadly flat YoY (H1 2024: £1.8m), with the traction in the US offset by managed declining revenues in the Middle East.

Gross profit increased by 9% to £1.2m (HY2024: £1.0m), supported by an improved gross profit margin of 73% (H1 2024: 60%). This reflects our strategic shift away from a reliance on external resources and early successes in transitioning customers to more profitable Insight Solution and Insight Platform products.

This, in turn, has supported a 15% improvement in Adjusted EBITDA performance, with the Company delivering an Adjusted EBITDA loss of £0.5m (H1 2024: loss of £0.6m) and cash remaining flat at £0.3m (H1 2024: £0.3m). We continue to manage our cash effectively and I am proud of our sustained ability to invest across the business to drive growth while maintaining a net cash position. Net cash is expected to increase during H2.

Building on solid foundations

With each period, the business continues to demonstrate increasing maturity, commercial focus, and determination. We as a Board are particularly pleased with the progress made in transitioning our focus to North America while at the same time future-proofing our proposition and refining our operational practices. These initiatives are supported by a strengthened commitment to cultivating a culture of excellence and accountability throughout the organisation. I would like to thank our team members for embracing the vision and for their unwavering commitment to overcoming challenges and driving the business forwards.

North America: Unlocking a potentially transformational growth opportunity

The highlight of the period was undoubtedly growing traction in the North American market, which we firmly believe represents the greatest opportunity for 4GLOBAL.

Revenue in North America grew by 161% in the half, which in itself is pleasing, however growth is still at a nascent stage. More importantly, it demonstrates strong penetration into two key sectors: sporting bodies and operators. The region's vast market size, combined with a strong public and private sector focus on increasing participation and optimising investment, makes our data-driven solutions highly relevant.

In September we announced a significant expansion of our agreement with U.S. Soccer. Having completed an initial Insight Labs project covering a single state earlier in the year, we subsequently agreed an Insight Solutions project to provide the organisation with the necessary insights to inform investment and legacy planning for grassroots development of the sport nationwide.

As well as being a key win in its own right, our progress with U.S. Soccer is an excellent reference in a country where there is a large number of fully funded sporting bodies whose primary investment criteria is to drive increased participation and where the mentality and therefore sales cycle is more reminiscent of the private sector. The model is highly replicable and our solutions are ideally placed to help these organisations optimise their investments to drive sustainable, long-term growth across any sport.

Strengthening our presence through expanding strategic partnerships

We were delighted to add strategic sale channel partnerships with Daxko LLC and Xplor post-period-end. Partnerships are a key aspect of our growth strategy within the North American operator market as they grant us access to many potential customers for little cost and minimal risk.

Our solutions tackle the key challenges faced by operators in the region, providing accurate, reliable, and accessible data to better understand customer behaviour and inform business decisions that drive retention, satisfaction, and lifetime value.

According to the USA Health and Fitness Association, the operator market is projected to grow 14% annually until 2030 and spend on technology is expected to double in the same timeframe. With a growing emphasis on data, a standout product offering and the support of our partners, we are ideally placed to benefit.

The more experience we gain in North America and the better we understand the different dynamics at play, the greater the potential we believe the region represents. As we build our presence and grow the reputation of our data and insight there, new opportunities are emerging across both our existing verticals and new applications.

Strategic shift to enhance revenue quality in the Middle East

The Middle East remains an important and lucrative market for us. In response to debtor recoverability issues in the region, we made the decision to operate with a stricter commercial mandate, only engaging in contracts with favourable payment terms. This has led to direct engagement with customers rather than operating mainly as a subcontractor, providing us with greater economic certainty and reduced risk.

Further payments relating to the significant debtor position in the Middle East were received during H1, however the payment plan is currently behind schedule. The FY24 provision for transaction risk remains in place and, based on ongoing discussions with the client, we anticipate additional receipts to bring the payment plan up to date by year-end. If payments fall short of expectations, an additional provision may be required in H2.

Middle East revenue decreased in the first half of the year by 61% because several opportunities did not meet our commercial risk threshold. This has ultimately improved the quality of revenue generated in the region, with all new contracts on favourable commercial terms and reduced customer concentration.

Continued growth in UK and Europe

We continue to make solid progress in our core UK and Europe market, with 6% revenue growth. This performance highlights our ability to drive growth across both new and existing customers in a dynamic and expanding market.

Elsewhere, post-period-end we announced a two-year extension of our framework contract with the Peruvian government to mid-2027. The value of this new agreement is significantly higher than the original signed in 2021, demonstrating the stickiness of customers once they have experienced firsthand 4GLOBAL's ability to leverage data to transform investment planning.

Driving innovation to grow recurring revenues and customer lifetime value

Recent advancements in embedding Artificial Intelligence and Machine Learning across our product suite are delivering good results for our customers while supporting our goal of increasing customer lifetime value. These innovations are a key part of our continuous efforts to future-proof the Company and deliver on our "Build for tomorrow" objective. With a strong pipeline of new product developments, we aim to further expand the capabilities of our solutions with a particular emphasis on driving growth in recurring and repeatable revenues.

Delivering growth across all strategic objectives

Our strategy is structured around four objectives designed to help investors track our progress. At the full year we attached KPIs to each of these objectives, which we will update on annually. These pillars are:

We are happy with the progress we have made against each pillar in the half, with all KPIs trending in the right direction at this stage. We look forward to updating on our performance against each at the full year.

Current trading & outlook

The second half has started well, with revenues, as expected, weighted toward this period due to the nature of the markets in which we operate and the timing of customer investment decisions. We are tracking well against full-year expectations at this stage, supported by a strong sales pipeline, though remain mindful of macroeconomic challenges and the potential for slower customer decision-making processes and longer sales cycles.

We have worked hard in the first half of the year to build on the progress made in prior periods to position the business for growth, particularly in North America, where increased awareness of our solutions is driving demand.

With a healthy pipeline across our target markets, a commitment to continuous innovation, and a proven strategy, we are confident in delivering sustainable growth in the second half and beyond.

We look forward to keeping shareholders informed of progress in the period ahead.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

The notes form part of these Condensed Consolidated Financial Statements.

Note 1  Adjusted (loss) / profit from operations is calculated as earnings before interest, taxation, depreciation, amortisation of intangible assets and right of use charge, share based payments, foreign exchange losses and exceptional items.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2024

The notes form part of these Condensed Consolidated Financial Statements.

The Condensed Consolidated Financial Statements were approved and authorised for issue by the Board of Directors on 11 December 2024.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

The notes form part of these Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

The notes form part of these Condensed Consolidated Financial Statements.