Unaudited Preliminary Results

16 July 2024

4GLOBAL plc

("4GLOBAL" or "the Company")

Unaudited Preliminary Results

Strong organic growth and EBITDA above market expectations

4GLOBAL, a provider of data and technology for sports, fitness and wellness organisations to optimise operational and investment decisions, announces its unaudited preliminary results for the year ended 31 March 2024 ("FY24").

Financial Results (£'m)

Strategic Highlights

Current Trading & Outlook

Eloy Mazon, 4GLOBAL CEO, said:

"This has been a year of significant organic growth and several important strategic milestones. Our focus on expanding internationally and increasing the proportion of recurring revenue is now delivering tangible results, with new customer wins including PIF and US Soccer illustrative of the calibre of organisation we are attracting.

We have taken great strides as a business in the past few years and, with market-leading offerings and new products in the pipeline to address the wealth of available opportunities, I am excited about what the future holds for 4GLOBAL in FY25 and beyond."

1Adj. EBITDA is Adjusted EBITDA, defined as statutory profit from operations before interest, taxation, depreciation, share based payment expense 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.

Presentation to Investors

Management will host a live online presentation and Q&A via the Investor Meet Company platform this morning at 11am UK time. The presentation is open to all existing and potential shareholders. Investors can sign up for free and add to meet 4GLOBAL via: 

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

Annual Report and AGM

The Company expects to send printed annual reports to shareholders who have requested one and make a copy available on its website by 31 August 2024. A notification will be made at the time of publication. The AGM will be held at the offices of 4GLOBAL, 5th Floor, Building 7 Chiswick Park, 566 Chiswick High Road, Chiswick, London W4 5YG, on 30 September 2024 at 11am.

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.

www.4global.com

Chairman's Statement

Robust strategic and commercial progress

The team successfully delivered on its growth ambitions, driving a strong increase in revenue and beating expectations for adjusted EBITDA. This is a particularly impressive achievement given the broader economic environment remains fragile.

What excites me the most, however, is the composition of the growth. This year saw a positive step change in contribution from international projects. The opportunity outside the UK is vast, but gaining traction overseas can be slow and costly for technology companies. Through cultivating a network of carefully selected strategic partners, 4GLOBAL has successfully circumnavigated much of that risk, establishing footholds in key international markets that are now bearing fruit.

Our turnover figure for the year also included a higher proportion of recurring revenues from our Insight Solutions and Insight Platform products, which are now the main growth engines in the business.

Our offering is now organised across three distinct pillars: Insight Lab, Insight Solutions and Insight Platform. These are aligned to the data maturity lifecycle of organisations, with each progressively higher margin and recurring revenue orientated. The Strategy section of the Chief Executive's Statement goes into this development in more detail.

Transitioning from a service model to one built on repeatable/recurring business is a key strategic priority for the business and, while it's not something that happens overnight, this year's results demonstrate encouraging progress. The shift to these agreements means stronger, longer-term relationships with our customers and greater predictability of revenue.

Strengthening the core

The headway the Company is making in these strategic areas is no accident. Over the past 12 months, I have witnessed firsthand a leap forward in terms of the maturity, focus and drive of the business. Significant efforts have been undertaken to refine and future-proof our proposition and optimise our ways of working, underpinned by a growing emphasis on fostering a culture of excellence and accountability in the organisation. These foundational improvements may be less visible to investors but are critically important if we are to capitalise on the wealth of opportunities before us.

Enhancing senior leadership

In January 2024, we appointed 4GLOBAL non-executive director Alexandra Orlando as Vice President, North America. Alexandra has made an immediate, positive impact in her new role. The US is an important growth market for the Company, and I have no doubt she is the right person to lead us on that journey.

In April 2024, Davendra Dabasia joined the Company as a non-executive director. An executive board member of Mace, he brings a great deal of relevant experience to 4GLOBAL as the Company looks to expand into new geographic areas. I look forward to working closely with him.

Also, in April 2024, we appointed Eric Haller as Non-Executive Director, replacing Alexandra on the Board to enable her to focus on her executive role. Eric is exceptionally experienced in maximising the commercial value of data and developing successful data products, having served as Global Executive Vice President and Group Head of Experian DataLabs. His counsel will be invaluable as we look to plot a comparable path.

Looking ahead with confidence

The hard work carried out to enhance the functionality and delivery of products, at the coalface in our markets, and across our internal functions, is now delivering tangible results. However, we are still only scratching the surface in terms of what we can achieve.

While growth will continue to be primarily organic with increasing international and recurring components, we will continue to seek opportunities to supplement it through acquisition where targets meet our strict criteria for investment and are a good strategic fit.

With the paradigm shift towards data-led decision-making in industry building up a head of steam, 4GLOBAL has a uniquely compelling offering at an opportune time. Looking forwards, buoyed by strong prospects and a growing sense of momentum, I am confident we are positioned well to deliver continued, sustainable growth and long-term shareholder value creation.

I would like to personally thank my colleagues across the business for their contributions. They have demonstrated immense determination and creativity in moving 4GLOBAL forwards in the year. Our people are the lifeblood of the business, and we are fortunate to have such a talented pool available to us.

Ian James

Chairman

15 July 2024

Chief Executive's Statement

Overview: Delivery on all fronts and poised for further growth

I'm pleased to report we delivered strong organic growth in the year while navigating a trading environment that remained challenging. 4GLOBAL is now a truly international business, with the majority of revenue, 52%, coming from non-UK markets for the first time.

Encouragingly, we are also on schedule in migrating new and existing customers to higher margin, recurring revenue products.

Much of our success in the year is the product of the sharpening of our strategic focus. We are now firmly committed to allocating resources to the most profitable long-term opportunities and have made good progress in optimising our operations for maximum efficiency.

These are ongoing processes but nonetheless reflect a cultural shift towards higher performance and a relentless pursuit of excellence, which we believe will ultimately deliver better returns for shareholders.

The proof will be in the results we deliver over time but supported by outstanding products, brilliant people, the right organisational infrastructure and a proven strategy, we are moving through the new financial year in a strong position.

Strategy: Supporting customers at every stage of their data journey

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

Leveraging the Company's network of strategic partners, we are focused on growing our presence in the North American, Middle East and European markets.

Our offering is now aligned to the data maturity lifecycle that our customers typically follow as their understanding of the business-critical insights they can extract from their and market data develops.

Our team of seasoned data and technology professionals are committed to continuously enhancing existing and developing new products to bolster our offerings across these pillars.

It is common for customers to be engaged on different pillars across different questions concurrently. In FY24, 74% of customers by revenue were engaged on multiple journeys with us at the same time (2023: 74%). The dynamic and iterative nature of working with data and the scalability of our offerings mean there is no limit to the number of engagements we can have running in parallel with a single customer, presenting significant opportunities for long-term revenue growth across our base.

Year in review: Good progress against strategic objectives

As part of sharpening our strategic focus, we have introduced four new strategic objectives with several KPIs attached to help investors more easily gauge progress:

In the future, we intend to further diversify revenue through identifying and expanding into new sectors with problems 4GLOBAL can solve.

1. Grow customer base internationally

We generated substantially more revenue outside the UK in the period and enter the new financial year with a growing pipeline of international opportunities.

Our strategy is to enter international markets through partnerships. This approach allows us to minimise entry costs and leverage existing salesforces and customer relationships.

Our target markets are North America and Europe, where we are actively investing in business development, sales and on-the-ground presence; and the Middle East, where we are focused on nurturing our partnerships.

While each region has its own unique dynamics and characteristics, our strategy of focusing only on the highest growth, highest potential sectors and opportunities is the common thread that runs through each of them.

KPIs

North America

We continued to make good progress in the region in the period, acquiring multiple new customers including US Soccer; Guadalajara Convention and Visitors Bureau in the City of Guadalajara, Mexico, one of the sixteen venues for the 2026 FIFA World Cup; Canadian Tire and Future of Hockey Lab.

Soccer is a particular area of focus, as the fastest growing sport in the US and benefitting from a strong push to increase participation ahead of and beyond the 2026 World Cup.

Signed in the fourth quarter, our relationship with US Soccer, the official nationwide governing body of the sport, has continued to develop from the initial engagement. A large-scale and dynamic organisation that could theoretically benefit from 4GLOBAL's data and technology across various aspects of its business, US Soccer exemplifies the kind of customer we are targeting in the region.

Gym operators continue to be an important target segment for the Company, with previously announced technology partnerships together providing 4GLOBAL access to 40% of facilities in the US. All sales through these partnerships are high-margin, recurring Insight Platform license revenue.

As well as increasing the size of our customer base in the region during FY25, we are well-positioned for continued success in deepening our commercial relationships with those organisations already in our base, consistent with our second strategic objective of increasing customer lifetime value.

Europe

Including the UK, our most mature market. We began the year with an established presence in Europe and continued to make good strategic and commercial advances there.

Gym operators have been a particular focus in the territory, with our previously announced partnership with EuropeActive, the leading non-profit organisation representing the European fitness and physical activity sector, remaining crucial in growing the use of DataHub in mainland Europe and further increasing the volume of data flowing into it. Sales through EuropeActive and other partners such as Technogym, signed in the period, are high-margin, recurring Insight Platform license revenue.

The pipeline of opportunities in Europe remains strong.

Middle East

The work carried out in the year to establish key partnerships and develop a robust understanding of the region's unique market dynamics resulted in the securing of several high-value agreements.

In October 2023, we were awarded a US$0.3m contract to deliver data, insight and knowledge applications to one of 4GLOBAL's long-standing strategic partners in the Middle East. Our success with this organisation serves as a model for future engagements and has opened several doors to potential new revenue opportunities in the region.

We followed this in January 2024 by announcing two contract wins in the Kingdom of Saudi Arabia with a new and existing partner customer for a combined value of £0.8m.

The Middle East remains a key growth market for the business. With the strong progress made there in the period we are confident of growing our presence further.

2. Increase customer lifetime value

Expanding relationships with existing customers is central to our growth strategy. As customers progress through the data maturity lifecycle outlined in the Strategy section above, their desire for more advanced and detailed insights typically increases, in turn increasing demand for our products.

KPIs

Our consistently high customer retention rates illustrate the value organisations attach to 4GLOBAL's products once they begin their journeys with us. This stems from the indispensable nature of the insights our platform provides, enabling organisations to make timely decisions that accelerate growth.

Sport England case study

The progression through the lifecycle is exemplified in the work we have done over the years with Sport England, the body of government responsible for growing and developing grassroots sport and getting more people active across the country.

A customer since 2021, in November 2023 we announced an expansion in the scope of our partnership with it. Starting with Insight Lab, Sport England engaged us to tackle specific challenges around understanding the impact of Covid on local sports facilities. Through the data-driven insights we provided, the body was able to identify areas of need and opportunities for the National Leisure Recovery Fund.

Sport England then needed to monitor and evaluate the progress of the resulting initiatives, leading to a transition to Solutions, where we supported them in embedding our technology and data into their daily operations and decision-making processes.

As Sport England continued using 4GLOBAL to progress its work on the impact of the pandemic, new operational questions and challenges came to light, prompting an adjacent journey through the lifecycle.

3. Transition to recurring revenue: shift to higher-margin, more predictable sales model

A great deal of work has been undertaken in the year to refine our products and how we deliver them to align better with a recurring revenue model.

As a result, more customers are now moving through the pillars from Insight Lab to Insight Solutions, to Insight Platform, rather than engaging us for traditional lower-margin, one-off consultative work.

This not only increases customer retention and satisfaction but is exponentially more scalable, adds stability to our sales and improves overall financial predictability.

KPIs

4. Build for tomorrow: future-proof 4GLOBAL through continuous innovation and improvement

4GLOBAL has carved out its reputation through a relentless focus on innovation for over a decade. Internally, our commitment to continuing these spans three key areas: our offering, our data asset and our organisation. We will look to introduce KPIs for this strategic objective in the future.

Offering: We are in constant dialogue with our customers to ensure our offering is developed to meet both their current and future needs in a way that is commercially beneficial to us. Consistent with this, our primary focus in the year has been to strengthen our Insight Solutions and Insight Platform offerings and we will continue in a similar vein in FY25.

We also continued to explore AI and machine learning in the period, including the launch of a now complete pilot project with Places Leisure, one of the UK's leading social enterprises in the health and wellbeing sector. The pilot was a success and is informing the development of a new product we expect to launch in FY25.

Data asset: A larger, richer data asset is the core of our competitive advantage. The more data points it comprises, the more accurate and informative the insights generated from it will be. Data points increased 14% to 4bn in the year (2023: 3.5bn) and we intend to continuously augment it through acquiring new data sources and creating proprietary data in the future.

Organisation: With the sharpening of our strategic focus and the growth expected in the coming years, it is vital we have the correct organisational infrastructure to ensure we can scale while continuing to deliver market-leading products and delivering outstanding customer experiences. The appointments of Alexandra Orlando as Vice President, North America, and Davendra Dabasia and Eric Haller as non-executive directors are testament to 4GLOBAL's growing reputation. On top of this, we strengthened our internal processes significantly in the year, a move which has been instrumental in improving efficiency and enabling us to deliver larger, more valuable contracts.

Current Trading & Outlook: Expectation of further sales and margin growth

We have made a promising start to the new financial year, with revenue secured of £2.5m and revenue performance tracking ahead of last year Q1. We expect FY25 to be a year of continued revenue and margin growth with an increasing proportion of international revenue and ARRR. Revenue will be second half weighted as in previous years due to the seasonality of budgets of our client base.

Our confidence is underpinned by a strong international pipeline of strategically and commercially significant projects with both new and existing customers. This pipeline is expected to continue to grow at a healthy rate, supported by several new product launches including those enhanced by AI.

At the same time, we will continue to proactively seek opportunities to accelerate growth through M&A. We will maintain a measured and disciplined approach, only proceeding with companies that can grant access to or bolster our footprint in a high-potential market.

We are excited about our prospects for the year ahead and look forward to keeping shareholders updated.

Eloy Mazon

Chief Executive Officer

15 July 2024

Financial Review

1. Results

Overall revenue grew from £5.6m to £6.4m which representing a 14% increase for the year.

Gross profit tracked revenue growth, increasing 15% to £4.7m (2023: £4.1m) with a margin of 73% as in 2023. As we progress develop our business model we anticipate an improvement in margin.

2. Administrative Expenses

Administrative Expenses for the year ended 31 March 2024 was £3.1m compared to the previous year of £2.9m. As the business is talent focussed, the largest single expense for the Group is wages and salaries. Before capitalisation of development costs, wages and salaries increased from £2.1m to £2.4m with average headcount increasing from 30 to 34.

Depreciation and amortisation increased as a result of a full year charge for amortisation of the products we brought to market in the previous year. Amortisation charge increased from £6,256 to £87,092.

The share-based payment charge fell from £0.34m to £0.26m due to certain options lapsing during the prior year.

The Group has agreed a long-term repayment plan against a significant outstanding receivable totalling £2.2m as at 31 March 2024. The payment plan spans a period of greater than 12 months from the financial year end. As result of the extended settlement period, a discount charge has been recognised in Finance Costs (note 12) for £142,141 (2023: £nil). Although the balance is expected to be repaid in full, as a result of the transactional risk associated with the long-term payment plan, the Group has recognised a provision against the discounted balance of £512,658 (2023: £nil).

3. Finance Charge

The finance charge for the year has increased from £24,043 to £174,525. The difference is primarily due to the requirement to discount an outstanding debtor balance. The debtor balance is for £2.1m and, as this is to be settled over a period greater than 12 months, a discount has been applied as required by IFRS 9. This has been calculated using the Group's weighted average cost of capital and the charge is £142,141. As the balance is settled this will be reversed against the amount held on the balance sheet.

4. Taxation

The taxation charge for the year has increased from a credit of £0.1m to a charge of £0.4m. This charge is due to withholding tax being applied to income generated from overseas clients and, as the Group is profitable, there is no research and development credit. As we grow revenues from these geographic areas this will increase. We will have the opportunity to offset where we can through double taxation treaties. The other charge is for deferred tax which is calculated on the timing differences for the capitalised cost additions to our intangible assets.

5. Statement of Financial Position

The total assets as at 31 March 2024 was £6.1m compared to £6.3m at 31 March 2023, reflecting the retained earnings for the year.

We have capitalised the cost of developing our new products and platforms by £0.9m, the majority of which is the staff costs of bringing the products and platforms to a position where they can be economically utilised. We have begun to amortise the existing products as they are now being utilised by our clients.

During the year we migrated our contract assets to accounts receivable which increased our accounts receivable from £1.4m to £3.8m. The contract assets have been reduced from £2.1m to £1.0m. We have an outstanding balance where we have been negotiating a settlement agreement with the client where the amount will be settled over an extended period of time. This is with a global company with which we are working with in close partnership on a number of assignments and future opportunities. As result of the extended settlement period a discount charge has been made in the current report and accounts for £142,141 in accordance with accounting standards.

6. Cash Flow

The Group utilised £1.0m of cash through the year to 31 March 2024. This in due to the investment in the product and platforms the Group is making for future revenue growth and also an increase in the working capital within Accounts Receivable.

Keith Sadler

Chief Financial Officer

15 July 2024

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2024

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS