REG - GetBusy PLC - 2022 Audited Results
01/03/2023 07:00
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RNS Number : 4138R GetBusy PLC 01 March 2023
1 March 2023
GetBusy plc
2022 Audited Results
Growth strategy delivering
GetBusy plc ("GetBusy", the "Company" or the "Group") (AIM: GETB), a leading
provider of productivity software for professional and financial services,
announces its audited results for the year ended 31 December 2022.
2022 2021 Change
£'000 £'000 Reported currency Constant currency***
ARR 19,240 15,828 22% 16%
Recurring revenue 18,281 14,343 27% 21%
Total revenue 19,293 15,448 25% 19%
Adjusted EBITDA* 692 (510) n/a
Adjusted loss before tax** (746) (1,222) 39%
Loss before tax (543) (2,335) 77%
Cash 2,972 2,670 11%
Financial highlights
· 27% recurring revenue growth (21% at constant currency) to £18.3m
· 25% total revenue growth (19% at constant currency) to £19.3m
· ARR growth of 22% (16% at constant currency) to £19.2m with healthy new
business, improving churn and successful monetisation
· Recurring revenue comprises 95% of total revenues (2021: 93%)
· Gross margin remains strong at 89.9% (2021: 91.6%) with greater volume of
cloud revenue
· First year of positive Adjusted EBITDA at £0.7m (2021: £(0.5)m) - with
majority of incremental revenue reinvested for growth in line with strategic
roadmap
· Increased cash of £3.0m (2021: £2.7m) validates self-funding model,
underpinned by new committed £2.0m facility, which remains entirely undrawn
Operational highlights
· Over one billion unique documents now stored securely in our products, with
250million documents and three million digital signatures handled annually
· 300,000 trees and 14,000 tonnes of CO(2) cumulatively saved by customers
through our paperless solutions
· Group ARPU up 13% at constant currency to £256 (2021: £216)
· 2% increase in paying users to 75,058 (2021: 73,352)
· Strong net revenue retention of 100.2% per month (2021: 99.8%), reflecting
successful fair-price monetisation efforts and value customers ascribe to our
solutions
· Launched major new channel partnership with Right Networks, targeting
SmartVault to its substantial base of over 8,500 accounting firms
· Strengthened position in insolvency market through integration and referral
partnership with Turnkey IPS
· Merged Virtual Cabinet and Workiro operations to leverage our enterprise
capabilities and expertise for the ERP market
· Awarded SuiteCloud International Partner of the Year for Workiro application
Outlook
· Targeting sustained double-digit ARR growth
· Ramping investment in sales and marketing through 2023
· Strong start to 2023
Daniel Rabie, CEO of GetBusy, comments:
"2022 was another fantastic year with 25% revenue growth, strong, double-digit
ARR growth and our first Adjusted EBITDA-positive period, leading to a third
consecutive year of cash generation. Against a difficult economic backdrop,
our products are solving real, practical, and universal challenges for our
customers in large, under-penetrated and resilient markets, supported by
enduring the themes of productivity, cyber-security, mobility and privacy.
"Our strategy of investing for long-term, sustainable growth from a stable
platform with excellent visibility is validated.
"Moving into 2023 we plan to capitalise further on these valuable market
opportunities through sustained investment in customer acquisition across the
Group as we enter the next exciting phase of our scaling journey."
*Adjusted EBITDA is Adjusted Loss before Tax with capitalised development
costs added back. A full list of our alternative performance measures,
together with a glossary of certain terms, can be found in note 2.
** Adjusted Loss before Tax is Loss before tax, depreciation and amortisation
on owned assets, long-term incentive costs, net capitalised development costs,
finance costs that are not related to leases, and non-underlying items.
*** Changes at constant currency are calculated by retranslating the
comparative period at the current period's prevailing rate of exchange.
A copy of the presentation to investors and the audited annual report will be
available on the Company's website, at www.getbusyplc.com
(http://www.getbusyplc.com) shortly.
GetBusy plc
investors@getbusy.com
finnCap (Nominated Adviser and Broker) +44 (0)20 7220 0500
Matt Goode / Charlie Beeson / Milesh Hindocha (Corporate Finance)
Alice Lane / Harriet Ward (ECM)
Alma PR (Financial PR) +44 (0)20 7886 2500
Hilary Buchanan / Andy Bryant / Hannah Campbell
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION (EU) NO 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN. THE PERSON RESPONSIBLE FOR MAKING THIS ANNOUNCEMENT ON BEHALF OF THE
COMPANY IS PAUL HAWORTH.
About GetBusy
GetBusy's specialist productivity software solutions enable growing businesses
to work securely and efficiently with their customers, suppliers and teams
anytime, anywhere. Our solutions can be delivered flexibly across cloud,
mobile, hosted and on-premise platforms, whilst integrating seamlessly with a
wide variety of other class-leading core business systems.
With over 75,000 paying users and over 3 million collaborators across multiple
market sectors and jurisdictions, GetBusy is an established and fast-growing
SaaS business delivering sustained double-digit growth in high-quality
recurring subscription revenue over the long term.
Further information on the Group is available at www.getbusyplc.com
(http://www.getbusyplc.com)
Chairman's Statement
GetBusy is firmly focused on sustainable recurring revenue growth within a
large, well-defined, robust and valuable market opportunity.
More than ever, GetBusy's products are delivering tangible value across a
growing addressable market. Annually, we handle more than 250 million
documents for our customers, who execute over 3 million digital signatures and
share information with over 3 million collaborators. Our products have saved
around 300,000 trees and 14,000 tonnes of CO2 by helping our customers to go
paperless.
We are helping professionals to be as productive, efficient, and secure as
possible in the face of rising cost pressures and operational complexities.
Our very high - and improving - customer retention rates demonstrate how
embedded our growing range of capabilities have become within our clients'
technology stacks; a trend we expect to continue as the tailwinds of digital
transformation, cyber security, privacy legislation and hybrid working
strengthen.
I am delighted with the progress the business has made in 2022. Together
with the headline growth rates generated by our core businesses, there has
been significant progress in our efforts to underpin longer-term growth,
including through our emerging products. Significant new customer wins, new
channel partnerships, the introduction of new capabilities to our customer
base and prestigious industry awards have all been notable landmarks, but the
foundation of these achievements remains the provision of a compelling
proposition for new and existing customers.
On behalf of the Board, I would like to thank each member of our teams in
Cambridge, Houston and Sydney for their commitment in 2022. Across the
business, our people consistently exhibit ingenuity, tenacity, ambition and
humanity; they are our most valuable asset and the reason for our success.
In 2022, we have re-examined each of our markets and products and concluded
there is substantial long term value to be created by continuing to invest in
the growth of our high quality recurring subscription revenue. Our
industry-leading levels of recurring revenue endow us with excellent
forecasting visibility which, twinned with our cash-generative underlying SAAS
business model - proven over the five and a half years since GetBusy's
inception - provides a stable platform to continue to invest for growth.
In 2021 we announced our ambition to at least double Annual Recurring Revenue
within five years. I am pleased to report that ambition remains firmly on
track.
CEO's review - a clear focus on growth
Since IPO, GetBusy has achieved over 18% compound annual growth in ARR. Over
95% of our revenue is recurring in nature - amongst the highest in the UK
market. 2022 was GetBusy's third consecutive year of cash generation and our
first year of positive Adjusted EBITDA. Our business model has enabled us to
achieve growth since our IPO in a cash neutral fashion - we raised £3m in
2017 and, 5 years on, we have £3m of cash. Our markets are large and
under-penetrated and we solve real-life, practical problems for our customers,
making our products sticky. Against the current difficult economic backdrop,
never has the relevance of our products been more apparent as we help
customers to be efficient and secure in the face of rising costs. Our
strategy of investing for long-term, sustainable growth from a stable platform
with excellent visibility is validated.
Growing recurring subscription revenue remains our key focus.
The reliable and predictable revenue runrate from software subscriptions
provides a solid foundation for mid- to long-term planning. Our high gross
margins, strong customer retention rates and the favourable working capital
profile arising from a high proportion of customers paying annually in
advance, de-risk the investments we can make to drive future growth. Our
business model, allows us to double down responsibly on growth investment in
an otherwise cautious macro-economic environment, building a highly valuable
base of customer cashflows that have annuity characteristics.
As we move into 2023, we are setting up the business to capitalise on the
market opportunity with a clear focus on accelerating our customer
acquisition, which ultimately underpins long term growth. We are making
significant investments in our US sales and marketing operations for
SmartVault, to strengthen its already robust position in a highly attractive
market, and in the UK we are leveraging the substantial enterprise experience
from Virtual Cabinet to penetrate the ERP space with Workiro.
We are excited to begin this next chapter in our growth story.
27% growth in recurring revenue - predictable, scalable and valuable
Recurring revenue growth in 2022 was driven by continued execution against the
Group's consistent growth strategy: new customers and markets, customer
retention, monetisation and product expansion.
ARR grew 16% at constant currency to £19.2m (2021: £15.8m), through a
combination of new customer acquisition, strong customer retention rates and
improved pricing within our established products.
Predictable
Users were up 2% to 75,058 with new business contributing significantly to
this growth. Predictability is key to our customer acquisition model; we
have consistently returned more than £4 in customer lifetime value for every
£1 spent on acquiring a new customer. Once acquired, our customers tend to
be sticky: gross churn is resilient, averaging 0.9% per month, an improvement
on 2021 (1.0%) despite the anticipated increase arising from higher
monetisation.
ARPU was up 13% at constant currency to £256. The size of our customer base
enables us to draw valuable insights from users, informing product development
and the retention activities of our customer success teams. That insight
also proves the value of the productivity benefits delivered to our customers,
enabling us to set fair prices for our new and existing clients with
confidence. These price movements have been the core driver of ARPU in 2022,
contributing £2.4m in ARR over the year from both the SmartVault and Virtual
Cabinet products.
Our strong net revenue retention of 100.2% per month (2021: 99.8%) - meaning
revenue from our customer base on average grows each month before the addition
of new customers - provides us with outstanding visibility over near-term
growth, built from a very stable foundation of predictable recurring revenue.
The absence of significant customer concentration contributes to the
reliability of revenue generated from our customer base; no single client
accounts for more than 2% of revenue.
Scalable
The professional and financial services markets that the Group targets are
large and under-penetrated. GetBusy's software portfolio adds a productivity
layer to core business applications, simplifying workflows, improving
productivity, enhancing security and delighting clients. With the strong and
enduring tailwinds of digital transformation, privacy legislation, mobility
and cyber security, these supportive market dynamics will provide substantial
growth opportunities for the Group for years to come. Many organisations are
still very early on their software automation or optimisation journeys, and
the depth of our expertise within these markets positions us well to provide
an ever-increasing set of solutions to customers on that journey.
Our strong LTV:CAC ratio of 4:1 (2021: 4:1) allows us to increase our customer
acquisition spend with a high degree of confidence in the anticipated
returns. Typically, more than 65% of our direct customers elect for
contracts that are paid annually in advance, providing us with structural
working capital benefits that fund additional investment in growth. Our high
gross margin of 89.9% (2021: 91.6%) means there are minimal incremental
operating costs from acquiring new customers, which in the long term leads to
substantial operating leverage and cash generation.
The strength of our integrations with core business applications, such as
practice management or tax preparation software, contributes to our healthy
customer retention. Those integrations also provide channel opportunities for
us, enabling us to leverage a partner's access to well-defined customers,
improving customer acquisition scalability. Major new partners signed in
2022 include Right Networks, which has an installed base of over 8,500
accounting firms, and Turnkey IPS, the leading insolvency practice management
provider. SmartVault's partnership with Right Networks was launched
commercially in December, with the first customers now onboarded, and we
anticipate traction to build in that channel throughout 2023.
Channels are also a key part of our customer acquisition strategy for our
emerging products Workiro and Certified Vault, with the former increasing the
number of NetSuite value-added reseller partners to 8 during 2022.
Valuable
GetBusy focuses on the professional and financial services markets, with over
70% of revenue derived from the accountancy sector. These markets have
remained buoyant during 2022 and historically have proved relatively resilient
in the face of significant economic uncertainty. The battle to recruit and
retain professional talent, and the well-documented related inflationary
challenges, will drive increased adoption of productivity and automation
tools. The insolvency sector, a key growth area for GetBusy, is expected to
become particularly active as the strain of three years of extraordinary
financial pressures takes its toll on vulnerable sectors and practitioners
increasingly adopt fixed-fee models, providing a catalyst for efficiency
improvements.
The degree to which our products are embedded in our customers' everyday
workflows, and integrated into other mission-critical applications,
contributes to our low churn rates and high levels of net revenue retention.
This leads to a subscription revenue base that has valuable annuity
characteristics; the Group's customer base at its initial public offering in
2017 generates more ARR today than it did then as a result of strong
retention, increased penetration, revenue expansion from upsell and price
uplifts. Over time these revenue streams underpin highly profitable
businesses, something we have evidenced with the more mature parts of our
business achieving comfortably over 40% Adjusted Adjusted EBITDA margins.
This high-quality customer base has considerable strategic value.Through over
20 years of product and brand development, we have, through our portfolio of
innovative products, built leading positions in attractive markets with high
barriers to entry. Transaction multiples paid within the broader
professional services software market validate the importance of those
customer relationships and how selling additional products to those customers
can create significant value over the long term. Our continuing investments
in additional capabilities are made with this in mind. Over the longer term,
we expect our emerging products, including Workiro and Certified Vault, to
contribute more meaningfully to growth as the products mature and brand
recognition is established.
Current trading and outlook
Our balance sheet is strong. Our markets are resilient. Our products solve
relatable, practical problems. Our customer base is sticky. Our revenue is
highly predictable.
This enables us to continue to reinvest incremental revenues into acquiring
new customers and delivering additional value to existing customers, to
sustain double-digit ARR growth over the long-term.
The strong ARR momentum from 2022 has continued into 2023, with robust January
trading. We have started to scale our investments in customer acquisition,
including in sales and marketing heads, in both the US and UK and we expect
those investments to deliver meaningful returns over the medium-term.
The Board is tremendously excited about the Group's prospects to deliver
exceptional shareholder value over the long-term and looks forward to the
future with increasing confidence.
Business and financial review
Group 2022 2021 Change
Reported currency Constant currency
ARR at 31 December £19,240k £15,828k 22% 16%
Recurring revenue £18,281k £14,343k 27% 21%
Total revenue £19,293k £15,448k 25% 19%
Adjusted EBITDA £692k £(510)k n/a
Adjusted loss before tax £(746)k £(1,222)k 39%
Paying users at 31 December 75,058 73,352 2%
ARPU at 31 December £256 £216 19% 13%
Net revenue retention 100.2% 99.8% n/a
Established products
SmartVault and Virtual Cabinet have clear leading positions in their
respective markets.
SmartVault has particular strength within the SME accounting and tax space in
the US, a market which we estimate to exceed $250m in ARR. SmartVault is the
only fully-integrated cloud document management provider for Intuit's leading
Lacerte and ProSeries tax preparation products; the workflow productivity
benefits from this tight integration lead to outstanding customer retention
rates, typically five times better than for the broader customer base.
SmartVault's product development continued apace during 2022. Our recently
released e-mail capture capability was iterated, and we introduced
custom-branded e-mail messaging, a significantly updated and refreshed user
interface, an overhaul of some of the features for account administrators and
the beta-release of the form-fill and quoting technology integrations. These
developments help us to retain clients and create distinctive points of value
that allow us to price and package the product effectively, creating upgrade
paths for customers. Feedback from beta customers on the form-fill and quoting
technologies has been positive - particularly in the case of form-fill- and we
have subsequently moved into general release, with revenue contribution
expected to become impactful in 2024.
Virtual Cabinet further enhanced its position in the insolvency sector,
creating integration partnerships with Turnkey IPS, the leading practice
management provider, and Postworks, the digital mailroom provider, both of
which are key players in the sector. This position is strengthened through
Virtual Cabinet's integration with Workiro, providing a clear path for
customers embarking on their cloud journey whilst retaining the class-leading
capabilities of Virtual Cabinet and its deep integrations into a wide range of
core professional applications.
As well as a refreshed user interface and branding for Virtual Cabinet,
next-generation search capabilities were developed and launched together with
user analytics, improved OneDrive integration and improved document retention
capabilities.
The Workiro technology is also proving to be an attractive cloud pathway for
many Virtual Cabinet customers, with substantial overlap between the
requirements of the ERP market and Virtual Cabinet's established and target
customer base.
Emerging products
Our emerging products provide further growth potential for the Group. Each
addresses a validated productivity need within a clearly identified and large
market that shares the favourable characteristics and helpful tailwinds of our
core professional services markets.
Workiro provides intuitive document management, task, communication and
approval capability, targeted at users of ERP systems, with an initial focus
on Oracle's NetSuite application, into which Workiro is deeply integrated.
NetSuite's installed base of over 33,000 enterprise customers provides a
considerable market opportunity for Workiro, with the broader cloud ERP market
being significantly larger.
Workiro established a presence within the NetSuite ERP space during 2022,
signing 8 reseller partners and winning SuiteCloud International Partner of
the Year at the key SuiteWorld event. We expect our channel partners to
contribute significantly to a scalable customer acquisition model over the
long term, complementing our direct strategy. Given the typical size of many
ERP-using businesses, moving into 2023 we have consolidated our customer
acquisition efforts for Workiro and Virtual Cabinet, leveraging the latter's
substantial enterprise experience and generating operational efficiencies as
Workiro starts to scale.
Certified Vault was introduced into the asset finance market in the US in
2021, providing secure custody of electronic chattel paper on behalf of
secured lending institutions. Following an encouraging start towards the end
of 2021, we tempered customer acquisition during 2022 while we further develop
and prepare the product, and the surrounding operational infrastructure, for
the rigorous security and compliance demands of the larger financial services
market. This essential work, which will create a very solid and sustainable
foundation for Certified Vault in what is a large, highly attractive and
under-served market, is progressing well. We expect to complete the first of
our major security certifications for the market by early H2 2023, with the
second, more robust certification by the end of the year. Ultimately this
work should allow us to develop sales channels through asset finance
providers, providing a high degree of scalability to the model. In the
meantime, acquisition of smaller end customers in the space is allowing us to
refine the product and our operational processes.
Income statement
Recurring revenue grew 27% (21% at constant currency) to £18.3m (2021:
£14.3m), reflecting the strong ARR momentum carried forward at the start of
the year and the subsequent ARR growth, in particular from the fair-price
monetisation efforts in the UK and US.
US recurring revenue growth was strongest in the year, up 55% (35% at constant
currency) to £9.5m (2021: £6.1m), entirely driven by SmartVault, in which
solid customer acquisition was supported by excellent monetisation and
improved churn. Growth in the UK was 7% to £6.7m (2021: £6.3m); the
introduction of Virtual Cabinet Unlimited, our "all-in" pricing plan, and the
migration of a large proportion of customers to that plan. Australia and New
Zealand, in which our products are well-penetrated, was up 5% at £2.0m (2021:
£2.0m), and the region remains strongly profitable for the Group.
Non-recurring revenue of £1.0m was, as expected, down a little compared to
2021 following the effective completion of the process to convert older
Virtual Cabinet customers onto pure SaaS models. Total revenue was up 25%
(19% at constant currency) to £19.3m (2021: £15.4m).
Gross margin of 89.9% (2021: 91.6%) reflects the greater proportion of revenue
from our cloud products, most notably SmartVault, as opposed to on-premise
products for which there is very little cost of sale.
SG&A costs of £13.5m (2021: £11.6m) reflect a number of investments
across the business to underpin future growth and improve the infrastructure
of the Group to support additional scale. This includes investments in
customer acquisition teams across the Group, customer success teams, which
drive customer retention and expansion revenue campaigns, and a
professionalisation of our cyber security and operations capabilities. We
continued to build out our product development functions to support capability
improvements across the Group, and developer costs of £4.6m were 20% higher
(2021: £3.8m), partly due to currency but with additional investment mostly
in the US.
£1.4m of development costs were capitalised (2021: £0.7m), including a
variety of capability enhancements across Virtual Cabinet and SmartVault and
elements of the core application builds for Certified Vault and Workiro. The
increase compared to 2021 is a result of Workiro, for which no costs were
capitalised prior to 2022, and which met the criteria for capitalisation under
IAS38 Intangible Assets during the year.
Adjusted EBITDA was £0.7m (2021: £(0.5)m), whilst Adjusted Loss, which is
stated before development capitalisation, was £(0.7)m (2021: £(1.2)m).
The reduction in depreciation and amortisation to £0.6m was principally a
result of a change to the useful economic life of capitalised development
costs to 5 years (previously 3 years), following a management review; the
longer life better reflects the software development and commercial lifecycles
of the Group.
Share option costs were a little lower at £0.3m (2021: £0.4m) following the
conclusion of the vesting period of some of the options during the year, with
no new grants made. The credit for employment taxes due on the exercise of
options of £0.1m (2021: charge of £0.3m)is ultimately is linked to the
Company's share price, which is used in the calculation of the provision.
Non-underlying costs of £0.4m (2021: £0.4m) comprise corporate restructuring
costs of £0.2m together with a £0.2m increase in the provision for potential
historic sales tax liabilities in certain jurisdictions in the US. The
restructuring will be completed in H1 2023 and creates separate intermediate
holding company structures and trading companies for each of the Group's
businesses and management support functions. The Group's registrations for
sales tax in the relevant US jurisdictions are now largely complete and
settlements are expected to be made in H1 2023. No further material costs
are expected in 2023.
Non-lease finance costs relate solely to the Group's debt facility with
Silicon Valley Bank and include an accelerated amortisation of residual
capitalised facility fees as a result of the cancellation of the facility on
28 February 2023 and subsequent replacement with a £2million unsecured
facility from a director.
The loss before tax was £0.5m (2021: £2.3m). The tax credit of £0.6m
(2021: credit of £0.8m) reflects the expected UK research and development tax
credit offset by overseas tax payable in Australia and New Zealand.
Cashflow and working capital
2022 was the third straight year of net cash inflows, achieved despite the
Adjusted Loss before Tax of £(0.7)m. Key cash movements in 2022 included:
· Deferred revenue increased by £1.2m as a result of the continued
ARR growth and the large proportion of our new business that is paid annually
in advance;
· Trade and other payables increased by £0.4m, due to a combination
of smaller factors;
· Net tax receipts were £0.7m, with UK research and development
credits offset by tax payments in Australia and New Zealand; and
· Capital expenditure (excluding capitalised internal development
costs) was £0.5m (2021: £0.3m), with the increase due mostly to additions to
purchased software, mostly from enhancements to the DocDown and Quoters
technologies commissioned from the vendors of those assets.
Cash at 31 December 2022 was £3.0m, an increase of £0.3m from 31 December
2021.
Loan facility
The £2m secured revolving credit facility with Silicon Valley Bank remained
entirely undrawn during the year. On 28 February 2023, this facility was
cancelled as certain covenants contained within it were no longer considered
to be appropriate for the Group's growth strategy. In its place, the Group
entered into a 4-year £2m unsecured credit facility (the "New Facility") with
Clive Rabie, a non-executive director. Under the facility, interest is
charged on drawings at a margin of 6.0% above the Bank of England base rate.
An availability fee of 75% of the margin is payable on undrawn amounts. The
New Facility contains covenants related to the Group's ARR, which must remain
above £18.0m and grow at no less than 5.0% annually.
The new facility remains undrawn at the date of this report.
Balance sheet
The £1.4m increase in intangible assets in 2022 to £2.5m is a result of both
higher capitalised development costs, as a result of Workiro development
meeting the capitalisation criteria for the first time, and lower amortisation
following a change to the useful economic life of the Group's development
costs from 3 years to 5 years. Purchased software, mostly associated with
the technology acquisitions of DocDown and Quoters and the implementation of a
new billing system for SmartVault, also contributed to the increase.
Lease assets decreased in the year to £1.2m, mostly as a result of the
continued use of the Group's existing office facilities.
Trade and other receivables increased by £0.2m to £2.1m as a result of an
increase in prepayments and the impact of a stronger USD. The current tax
receivable of £1.1m relates to the UK research and development tax credit due
for the 2022 financial year, with £0.5m of tax payable or refundable in the
UK, Australia and New Zealand, which is recorded within current liabilities.
The £0.4m increase in trade and other payables is chiefly the result of
higher accruals, including for historic US sales taxes. Additionally, trade
payables were £0.3m higher due to the timing of invoicing from suppliers.
Deferred revenue, which is mostly derived from annual subscriptions paid in
advance has increased by £1.2m to £6.7m, driven mostly by the increase in
recurring revenue.
The lease liability of £1.5m relates to our Cambridge and Houston office
premises.
Over the course of 2022, 98,412 new shares were issued as a result of the
exercise of share options.
Future developments
On a constant currency basis, the Group expects to deliver sustained
double-digit growth in recurring revenue. Non-recurring revenue is expected
to comprise an ever decreasing proportion of total revenue as the focus
remains firmly on subscription revenue streams.
Over 50% of the Group's recurring revenue is denominated in USD. Material
fluctuations in prevailing exchange rates can have a material impact on
reported revenue growth, although the Group has no material transactional
currency exposure.
Gross margins will continue to trend slightly downwards, reflecting product
mix, with the Group's high-margin Virtual Cabinet product becoming a smaller
part of the overall mix. The additional investments in sales and marketing
across the Group are expected to have a c. £1m impact on the cost base during
2023.
Two factors will likely influence the cashflow profile of the Group in the
medium term.
· The UK is reforming its regime for research and development tax
credits, making the scheme less favourable for smaller companies. This is
likely to reduce the typical tax credit available to the Group by around 50%
from 2024 onwards.
· Whilst around 75% of new customers pay annually in advance for
their subscription, certain new channel partnerships have been negotiated on
the basis of monthly payments, to reflect the partners' model with end
users. This may reduce the cashflow benefit typically obtained through
deferred revenue, although it is still expected that the Group's direct
customers will retain the favourable cashflow profile.
Related Party Transactions
Incentive Plans
On 28 February 2023 the Company introduced the 2023 GetBusy Cash Distribution
Plan to incentivise and reward significant realised value creation for
shareholders ("CDP"). Daniel Rabie and Paul Haworth are participants in the
CDP.
In designing and implementing the CDP, the Committee took advice from PwC, a
remuneration consultant, as well as consulting with the majority of the
Company's larger institutional shareholders, who all supported its
implementation.
Awards under the CDP vest if the Company makes a gross cash distribution to
shareholders in excess of £70 million and up to £150 million within a 7 year
period from the implementation date of the plan. An adjustment is made to
the value of any award under the CDP to take account of any vested share
options that have previously been exercised by the participants, thereby
preventing participants benefiting from both the CDP and a distribution in
respect of any exercised share options.
At a gross cash distribution of £70m (the "Entry Point"), the award paid to
Daniel Rabie under the CDP, the VCP and the EMI Chare Option Plan would be
£5.0m and the award paid to Paul Haworth would be £1.75m. These amounts
are based on the approximate values that, absent the CDP, would otherwise be
paid on the participants' fully vested and exercised share options.
Above the Entry Point to a gross cash distribution of £120m (the "Target
Point"), the participants earn a linearly increasing share of the incremental
distribution above the Entry Point. Daniel Rabie's share increases from 7.0%
at the Entry Point to 15.0% at the Target Point. Paul Haworth's share
increases from 2.5% at the Entry Point to 10.0% at the Target Point. Above
the Target Point, the share of the incremental gross cash distribution earned
remains at 15.0% for Daniel Rabie and 10.0% for Paul Haworth up to a maximum
award payable at a gross cash distribution of £150m (the "Stretch Point").
Given the potential size of the cash awards, entry into the CDP constitutes a
related party transaction as a result of the operation of AIM Rule 13 of the
AIM Rules.
Daniel Rabie and Paul Haworth, by virtue of being directors of the Company,
are each considered to be a related party of the Company and given the
potential size of the cash awards, entry into the CDP constitutes a related
party transaction for the purposes of Rule 13 of the AIM Rules for Companies.
GetBusy's independent directors for this purpose (being Miles Jakeman, Nigel
Payne and Paul Huberman) consider, having consulted with the Company's
nominated adviser, finnCap Ltd ("finnCap"), that the terms of the CDP and the
participation in the new CDP are fair and reasonable insofar as the Company's
shareholders are concerned.
Loan facility
Clive Rabie, by virtue of being a director of the Company, is considered to be
a related party of the Company. The Company's entry into the New Facility with
Clive Rabie constitutes a related party transaction for the purposes of Rule
13 of the AIM Rules for Companies. GetBusy's independent directors for this
purpose (being Paul Haworth, Miles Jakeman, Nigel Payne and Paul Huberman)
consider, having consulted with the Company's nominated adviser, finnCap Ltd
("finnCap"), that the terms of the New Facility are fair and reasonable
insofar as the Company's shareholders are concerned.
CONSOLIDATED INCOME STATEMENT
2022 2021
Note £'000 £'000
Revenue 3 19,293 15,448
Cost of sales (1,952) (1,295)
Gross profit 17,341 14,153
Operating costs (17,754) (16,355)
Net finance costs (130) (133)
Loss before tax (543) (2,335)
Loss before tax (543) (2,335)
Depreciation and amortisation on owned assets 563 706
Long-term incentive costs 329 400
Social security costs on long-term incentives (120) 267
Non-underlying costs 389 400
Finance costs not related to leases 74 52
Adjusted EBITDA 692 (510)
Capitalised development costs (1,438) (712)
Adjusted loss before tax (746) (1,222)
Tax 571 771
Profit / (loss) for the year attributable to owners of the Company 28 (1,564)
Earnings / (loss) per share (pence)
Basic 4 0.06p (3.16)p
Diluted 4 0.05p (3.16)p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2022 2021
£'000 £'000
Profit/(loss) for the year 28 (1,564)
Other comprehensive income - items that may be subsequently reclassified to
profit or loss
Exchange differences on translation of foreign operations (380) (17)
Other comprehensive income net of tax (380) (17)
Total comprehensive income for the year (352) (1,581)
CONSOLIDATED BALANCE SHEET
2022 2021
£'000 £'000
Non-current assets
Intangible assets 2,486 1,110
Right of use assets - leases 1,184 1,544
Property, plant and equipment 382 426
4,052 3,080
Current assets
Trade and other receivables 2,104 1,907
Current tax receivable 1,064 1,021
Cash and bank balances 2,972 2,670
6,140 5,598
Total assets 10,192 8,678
Current liabilities
Trade and other payables (4,473) (3,917)
Deferred revenue (6,659) (5,469)
Lease liabilities (371) (333)
Current tax payable (536) (378)
(12,039) (10,097)
Non-current liabilities
Deferred revenue - (4)
Lease liabilities (1,131) (1,533)
(1,131) (1,537)
Total liabilities (13,170) (11,634)
Net assets (2,978) (2,956)
Equity
Share capital 75 74
Share premium account 3,018 3,018
Demerger reserve (3,085) (3,085)
Retained earnings (2,986) (2,963)
Equity attributable to shareholders of the parent (2,978) (2,956)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
Share premium account
Share capital Demerger Retained earnings
Reserve Total
2022 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 74 3,018 (3,085) (2,963) (2,956)
Profit for the year - - - 28 28
Exchange differences on translation of foreign operations, net of tax - - - (380) (380)
Total comprehensive income for the year - - - (352) (352)
Issue of ordinary shares 1 - - - 1
Long-term incentive costs - - - 329 329
Total transactions with owners of the Company 1 - - 329 330
At 31 December 2022 75 3,018 (3,085) (2,986) (2,978)
Share premium account
Share capital Demerger Retained earnings
Reserve Total
2021 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 74 3,018 (3,085) (1,782) (1,775)
Loss for the year - - - (1,564) (1,564)
Exchange differences on translation of foreign operations, net of tax - - - (17) (17)
Total comprehensive income for the year - - - (1,581) (1,581)
Long-term incentive costs - - - 400 400
Total transactions with owners of the Company - - - 400 400
At 31 December 2021 74 3,018 (3,085) (2,963) (2,956)
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2022
2021
2022 (restated)
£'000 £'000
Profit / (loss) for the year 28 (1,564)
Finance costs 130 133
Income tax credit (571) (771)
Depreciation of right of use asset 277 316
Depreciation of property, plant and equipment 163 133
Amortisation of intangible assets 400 573
Long-term incentive cost 329 400
Increase in receivables (197) (92)
Increase in payables 428 1,360
Increase in deferred income 1,187 806
Cash generated from operations 2,174 1,294
Interest paid (74) (52)
Income taxes received 675 623
Net cash generated from operating activities 2,775 1,865
Purchases of property, plant and equipment (118) (181)
Purchases of intangible assets (339) (163)
Capitalised internal development costs (1,438) (712)
Net cash used in investing activities (1,895) (1,056)
Principal portion of lease payments (306) (261)
Interest on lease liabilities (56) (81)
Proceeds on issue of shares 1 -
Net cash used in financing activities (361) (342)
Net increase in cash 519 467
Cash and bank balances at beginning of year 2,670 2,283
Effects of foreign exchange rates (217) (80)
Cash and bank balances at end of year 2,972 2,670
The presentation of the reconciliation of profit to cash generated from
operations has been amended in the current year. The starting point of
profit/loss for the year rather than adjusted loss before tax is considered to
be a more appropriate presentation as profit/(loss) for the year is a
statutory IFRS measure. For comparability purposes, the prior year
presentation has been amended.
Notes to the financial information
1. GENERAL INFORMATION
GetBusy plc is a public limited company ("Company") and is incorporated in
England under the Companies Act 2006. The company's shares are traded on the
Alternative Investment Market ("AIM"). The Company's registered office is
Suite 8, The Works, Unity Campus, Pampisford, Cambridge, CB22 3FT. The
Company is a holding company for a group of companies ("Group") providing
productivity software for professional and financial services.
These financial statements are presented in pounds sterling (rounded to the
nearest thousand) because that is the currency of the primary economic
environment in which the group operates.
In accordance with Section 435 of the Companies Act 2006, the Group confirms
that the financial information for the years ended 31 December 2022 and 2021
are derived from the Group's audited financial statements and that these are
not statutory accounts and, as such, do not contain all information required
to be disclosed in the financial statements prepared in accordance with
UK-adopted International Accounting Standards. The statutory accounts for the
year ended 31 December 2021 have been delivered to the Registrar of Companies.
The statutory accounts for the year ended 31 December 2022 have been audited
and approved but have not yet been filed. The Group's audited financial
statements for the year ended 31 December 2022 received an unqualified audit
opinion and the auditor's report contained no statement under section 498(2)
or 498(3) of the Companies Act 2006. The financial information contained
within this full year results statement was approved and authorised for issue
by the Board on 28 February 2023.
2. ALTERNATIVE PERFORMANCE MEASURES AND GLOSSARY OF TERMS
The Group uses a series of non-IFRS alternative performance measures ("APMs")
in its narrative and financial reporting. These measures are used because we
believe they provide additional insight into the performance of the Group and
are complementary to our IFRS performance measures. This belief is supported
by the discussions that we have on a regular basis with a wide variety of
stakeholders, including shareholders, staff and advisers.
The APMs used by the Group, their definition and the reasons for using them,
are provided below:
Recurring revenue. This includes revenue from software subscriptions and
support contracts. A key part of our strategy is to grow our high-quality
recurring revenue base. Reporting recurring revenue allows shareholders to
assess our progress in executing our strategy.
Adjusted Loss before Tax. This is calculated as loss before tax and before
certain items, which are listed below along with an explanation as to why they
are excluded:
Depreciation and amortisation of owned assets. These non-cash charges to the
income statement are subject judgement. Excluding them from this measure
removes the impact of that judgement and provides a measure of profit or loss
that is more closely aligned with operating cashflow. Only depreciation on
owned assets is excluded; depreciation on leased assets remains a component of
Adjusted Loss because, combined with interest expense on lease liabilities, it
is a proxy for the cash cost of the leases.
Long-term incentive costs. Judgement is applied in calculating the fair
value of long-term incentives, including share options, and the subsequent
charge to the income statement, which may differ significantly to the cash
impact in quantum and timing. The impact of potentially dilutive share
options is also considered in diluted earnings per share. Therefore,
excluding long-term incentive costs from Adjusted Loss before Tax removes the
impact of that judgement and provides a measure of profit that is more closely
aligned with cashflow.
Capitalised development costs. There is a very broad range of approaches
across companies in applying IAS38 Intangible assets in their financial
statements. For transparency, we exclude the impact of capitalising
development costs from Adjusted Loss before Tax in order that shareholders can
more easily determine the performance of the business before the application
of that significant judgement. The impact of development cost capitalisation
is recorded within operating costs.
Non-underlying costs. Occasionally, we incur costs that are not
representative of the underlying performance of the business. In such
instances, those costs may be excluded from Adjusted Loss before Tax and
recorded separately. In all cases, a full description of their nature is
provided. .
Finance costs not related to leases. These are finance costs and income such
as interest on bank balances. It excludes the interest expense on lease
liabilities under IFRS16 because, combined with depreciation on leased assets,
it is a proxy for the cash cost of the leases.
Adjusted EBITDA. This is calculated as Adjusted Loss before Tax with
capitalised development costs added back.
Constant currency measures. As a Group that operates in different
territories, we also measure our revenue performance before the impact of
changes in exchange rates. This is achieved by re-stating the comparative
figure at the exchange rate used in the current period.
Glossary of terms
The following terms are used within these financial statements:
MRR. Monthly recurring revenue. That is, the monthly value of subscription
and support revenue, both of which are classified as recurring revenue.
ARR. Annualised MRR. For a given month, the MRR multiplied by 12.
CAC. Customer acquisition cost. This is the average cost to acquire a
customer account, including the costs of marketing staff, content, advertising
and other campaign costs, sales staff and commissions.
LTV. Lifetime value, calculated as the average revenue per account
multiplied by the average gross margin and divided by gross MRR churn.
MRR churn. The average percentage of MRR lost in a month due to customers
leaving our platforms.
Net revenue retention. The average percentage retained after a month due to
the combined impact of customers leaving our platforms, customers upgrading or
downgrading their accounts and price increases or reductions.
ARPU. Annualised MRR per paid user at a point in time.
3. Revenue and operating segments
The Group's chief operating decision maker is considered to be the Board of
Directors. Performance of the business and the deployment of capital is
monitored on a group basis and so the Group has a single reportable segment.
Additional revenue analysis is presented by territory.
2022
UK USA Aus/NZ Total
£'000 £'000 £'000 £'000
Recurring revenue 6,739 9,498 2,044 18,281
Non-recurring revenue 511 419 82 1,012
Revenue from contracts with customers 7,250 9,917 2,126 19,293
Cost of sales (1,952)
Gross profit 17,341
Sales, general and admin costs (13,526)
Development costs (4,561)
Adjusted loss before tax (746)
Capitalisation of development costs 1,438
Adjusted EBITDA 692
Depreciation and amortisation on owned assets (563)
Long-term incentive costs (329)
Social security on long-term incentives 120
Non-underlying costs (389)
Other finance costs (74)
Loss before tax (543)
2021
UK USA Aus/NZ Total
£'000 £'000 £'000 £'000
Recurring revenue 6,280 6,119 1,944 14,343
Non-recurring revenue 661 365 79 1,105
Revenue from contracts with customers 6,941 6,484 2,023 15,448
Cost of sales (1,295)
Gross profit 14,153
Sales, general and admin costs (11,588)
Development costs (3,787)
Adjusted loss before tax (1,222)
Capitalisation of development costs 712
Adjusted EBITDA (510)
Depreciation and amortisation on owned assets (706)
Long-term incentive costs (400)
Social security on long-term incentives (267)
Non-underlying costs (400)
Other finance costs (52)
Loss before tax (2,335)
Recurring revenue is defined as revenue from subscription and support
contracts. Non-recurring revenue is defined as all other revenue. No
customer represented more than 10% of revenue in either year.
4. Earnings / (loss) per share
The calculation of earnings per share is based on the profit for the year of
£28k (2021: loss of £1,564k).
Weighted number of shares calculation 2022 2021
'000 '000
Weighted average number of ordinary shares 49,621 49,516
Effect of potentially dilutive share options in issue 7,341 -
Weighted average number of ordinary shares (diluted) 56,962 49,516
Earnings per share 2022 2021
Pence pence
Basic 0.06 (3.16)
Diluted 0.05 (3.16)
At 31 December 2022, there were 7,169,236 share options (2021: 7,527,629).
As required by IAS33 (Earnings per Share), the impact of potentially dilutive
options was disregarded for the purposes of calculating diluted loss per share
in the prior year as the Group was loss making.
5. Reconciliation of Alternative Performance Measures - constant
currency
A number of our key performance indicators are provided at "constant
currency". The percentage change in a KPI is shown assuming the current year
exchange rate is used to translate both the current year and prior year
figures. The table below reconciles the constant currency figures to those
reported.
Performance measure 2022 2021 as originally reported Constant currency adjustment 2021 at constant exchange rates Change at reported exchange rates Change at constant exchange rates
Group recurring revenue £18,281k £14,343k £746k £15,089k 27% 21%
Group total revenue £19,293k £15,448k £787k £16,235k 25% 19%
Group Annualised Recurring Revenue £19,240k £15,828k £788k £16,616k 22% 16%
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