REG - GetBusy PLC - 2023 Audited Results
26/03/2024 07:00
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RNS Number : 2022I GetBusy PLC 26 March 2024
26 March 2024
GetBusy plc
2023 Audited Results
Continued double-digit growth and value creation
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 2023
2023 2022 Change
£'000 £'000 Reported currency Constant currency(***)
Group ARR 20,524 19,240 7% 10%
Group recurring revenue 20,311 18,281 11% 12%
Group total revenue 21,112 19,293 9% 10%
Group adjusted EBITDA* 1,045 692 51%
Group adjusted loss before tax** (629) (746) 16%
Group loss before tax (509) (543) 6%
Cash 1,942 2,972 (35%)
Financial highlights
· Recurring revenue growth of 12% at constant currency to £20.3m
(2022: £18.3m)
· Recurring revenue comprises 96% of total revenues (2022: 95%)
· ARR growth of 10% at constant currency to £20.5m (2022: £19.2m)
· Gross margin improvement to 90.1% (2022: 89.9%)
· Adjusted EBITDA up 51% to £1.1m (2022: £0.7m)
· Cash of £1.9m (2022: £3.0m) remains strong, underpinned by
undrawn committed £2.0m facility giving a total of £3.9m available growth
capital
Operational highlights
· Strong net revenue retention of 100.0% per month (2022: 100.2%),
reflecting lower gross churn
· Group ARPU up 12% at constant currency to £281 (2022: £256)
· 3% reduction in paying users to 73,057 (2022: 75,058), reflecting
strategy to focus on higher value customers
· Over 1,500 document activities per second processed on our
platforms at peak times
· 3.5 million collaborators share over 20 million documents annually
across our products
· Launched major new integration for SmartVault with Thomson Reuters'
UltraTax application, opening promising new accounting markets within US
· Launched Accounting Unlimited in the US, packaging an unrivalled
feature set into one plan and driving excellent expansion revenue since launch
· Signed five partners to Workiro Platinum programme, incorporating
minimum annual revenue commitments
Outlook
· Our core markets remain robust, our balance sheet is strong, we
have a loyal customer base and our revenue is highly predictable.
· 2024 has started well, with continued growth across the Group
through a combination of new business, expansion and price improvement.
· The board remains excited about the Group's prospects to deliver
exceptional shareholder value over the long-term.
Daniel Rabie, CEO of GetBusy, comments:
"Against an ongoing challenging 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, elevated cyber threats and ever-increasing
compliance burdens. This is clearly seen in the degree to which our products
are embedded in our customers' workflows, with over 3.5million collaborators
completing up to 1,500 document activities per second on our platforms,
securely and effortlessly.
"Our strategy of investing for long-term, sustainable growth from a stable
platform with excellent visibility is validated, delivering another year of
double-digit ARR growth.
"We look forward to the investments and improvements to our customer
acquisition functions made during 2023, together with strong expansion revenue
from existing customers, to contribute to enhanced growth rates during 2024
and beyond."
*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 will be available on the Company's
website, at www.getbusyplc.com (http://www.getbusyplc.com) shortly.
GetBusy plc
investors@getbusy.com
Cavendish Capital Markets Limited (Nominated Adviser and Broker) +44 (0)20 7220 0500
Matt Goode / Charlie Beeson / Trisyia Jamaludin (Corporate Finance)
Harriet Ward (ECM)
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 73,000 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
Chairman's introduction
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 to our
customers and becoming more embedded within their business-critical
infrastructure. We are expanding the markets we serve through the
combination of product innovation and a broader set of integrations, setting
the Group up for strong revenue growth over both the medium- and long-term and
creating significant value for shareholders.
We are helping professionals to be as productive, efficient, and secure as
possible in the face of rising cost pressures, operational complexities and a
structural scarcity of qualified talent. 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.
Once again significant progress has been made in 2023. So much has been
achieved in scaling and improving our customer acquisition engines, building
out our partner channels, opening new addressable markets, increasing average
selling price and improving churn but the foundation of these achievements
remains the ongoing 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, all of whom the directors have spent time with
in 2023, for their ongoing commitment. Across the business, our people
consistently exhibit ingenuity, tenacity, ambition and humanity; they are our
most valuable asset and the reason for our success.
Our strategy is clear. Considerable strategic value can be realised in the
medium term by investing in the ongoing penetration of our core accounting
market, particularly with SmartVault in the US, whilst establishing a
foundation for long term growth through the provision of intuitive enterprise
content management to a wide range of industries through Workiro, capitalising
on the established brand and success of Virtual Cabinet. The board and
management teams are completely aligned around this strategy.
In 2021 we announced our ambition to at least double Annual Recurring Revenue
within five years. I am pleased to report that ambition remains very much on
track.
CEO's overview
Since IPO, GetBusy has achieved over 16% compound annual growth in ARR. Over
96% of our revenue is from recurring subscriptions - amongst the highest in
the UK market. Our business model has enabled us to achieve growth in the 6
years since our IPO in an essentially cash neutral fashion, with an average of
less than £0.2m of cash consumed annually. Our markets are large and
under-penetrated and we solve real-life, practical problems for our customers,
making our products sticky. Against an ongoing challenging 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 core 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.
Our focus in 2023 was to structure the business to capitalise on the
substantial market opportunity for productivity software tools in the
accounting and ERP markets. Alongside delivering a 12% constant- currency
increase in high quality recurring subscription revenue, we made encouraging
progress in enlarging the markets available to us in the short- and long-term,
scaling our customer acquisition engines, building out our partner channels,
increasing average selling price and improving churn.
The Group has never been in a stronger position to capitalise on the
opportunity.
SmartVault in the US - an outstanding opportunity with a considerably expanded
target market
In the US, a market that harbours an outstanding opportunity in the accounting
sector through our SmartVault product, we made considerable progress in
enabling scale and considerably expanding the target market.
During 2023, we re-engineered our entire direct sales and marketing
operational methodology and implemented major improvements in our data insight
capabilities. This provides us with an excellent platform from which to ramp
direct sales and optimise the outcome for our marketing efforts whilst
maintaining enviable return on investment: throughout 2023 our customer
lifetime value to acquisition cost ratio ("LTV:CAC") averaged 4:1 (2002: 4:1).
SmartVault is seeing a higher volume of larger deals, demonstrating its
increasing appeal to larger accounting firms. The number of new customers
generating more than $10,000 in annual subscription revenue, typically
equating to 20 or more users, increased by 25% in the key Q4 selling season,
compared with the same period last year. We expect this trend to lead to a
meaningful increase in average selling price in the future. Larger customers
tend to have markedly lower churn rates than smaller customers, which
substantially enhances the lifetime value of the customer base.
Integration with UltraTax
Our integration with Thomson Reuters' UltraTax launched in July. Sales into
UltraTax customers have since contributed 9% of new revenue, with average
selling price being 76% higher than the average across all SmartVault
customers. This is particularly encouraging as successfully accessing users
of UltraTax roughly doubles the medium-term market opportunity for SmartVault.
Additionally, this integration provides a reusable blueprint for further
integrations into other tax software platforms as well as practice management
and workflow tools, providing SmartVault with a route to even broader adoption
in the future.
Reseller Partners
Reseller partners, such as Rightworks and TaxCalc, contributed 19% of new
business in 2023, compared to 2% in 2022. This provides us with confidence
that our channel strategy will, over time, contribute meaningfully to
SmartVault's growth. As well as its strength among users of Intuit's Lacerte
and ProSeries tax applications - with which SmartVault has the leading
document workflow integration - Rightworks is growing among users of UltraTax,
providing an additional route to that recently unlocked user base, which is
comparable in size to the combined Lacerte and ProSeries base. We added
further complementary integration partners during the year, including
Financial Cents, an accounting practice management tool, and Liscio, a client
portal for accountants. SmartVault is becoming an integral part of the
mission-critical technology stack for a greater variety of customers using a
broader set of core accounting, tax and financial services applications.
Information Security Certifications
Our US business obtained the key ISO27001 and SOC2-1 information security
certifications during the year, and we will shortly be upgrading to SOC2-2.
These benchmarks are often required for larger enterprise customers in which
there is a greater IT sophistication, as we have seen with our ISO27001
certification in the UK, so we expect this effort to enable SmartVault to
become more successful among larger clients, such as those on the UltraTax
platform.
Accounting Unlimited Plan
In November we launched our Accounting Unlimited plan, which packages an
unrivalled feature set including e-signature and the form-fill and quoting
technology acquired in 2021. Encouragingly, December's expansion revenue was
comfortably the highest we've ever recorded, driven by customers upgrading to
Accounting Unlimited, with an average revenue uplift of 42% per customer.
Coupled with our lowest ever churn rates, this provides us with confidence
that there remains substantial untapped value within the SmartVault customer
base.
The combination of SmartVault's leading position and brand recognition among
US accountants, its expanding integrations that open a larger addressable
market, its success in attracting higher value customers, its progress in
generating meaningful expansion revenue opportunities and its enviable
customer retention rates, make SmartVault a business that we believe has very
significant strategic value. We look forward to significantly growing the
business and realising that value over the next few years.
Virtual Cabinet and Workiro - long-term growth opportunity in sizeable,
diversified market
Collectively, Virtual Cabinet and Workiro serve enterprise customers in the
professional and financial services sector together with a broad range of
industries through Workiro's deep integration into ERP systems, with an
initial focus on Oracle's NetSuite application. NetSuite's installed base of
over 37,000 enterprise customers provides a considerable market opportunity
for Workiro, with the broader cloud ERP market being significantly larger.
Towards the end of 2022, Workiro won SuiteCloud International Partner of the
Year at the key SuiteWorld event. Since then, we have seen a marked increase
in the engagement of both NetSuite themselves and the partner ecosystem.
Five partners signed up to our invitation-only Platinum programme in Q4,
which incorporates minimum annual revenue commitments together with prescribed
marketing and brand-building activities. The flow of referrals from partners
has been increasing steadily, with a growing pipeline of well-qualified
opportunities.
Encouragingly, the customers we have won and our sales pipeline reflect a
diverse range of industries with similar challenges around efficient and
secure content handling within their core business functions, such as
procurement, sales and accounting. This validates our hypothesis that
Workiro provides a significantly greater market opportunity over the long-term
than the professional services markets we have traditionally served.
Average selling price for Workiro is markedly greater than that for SmartVault
with greater opportunity to expand within customers after the initial win, for
example across different functions. Overall the quality and size both of
customers we have won and within our pipeline, together with the low cost of
acquisition via our combined partner/direct channel, provides encouragement
that providing enterprise content management into the ERP market is a
significant, scalable and accessible long-term opportunity for the Group.
Virtual Cabinet completed the transition of its customer base to the Unlimited
"all-in" pricing plan during the first quarter; encouragingly, we have seen no
adverse impact on churn rates, which validates the value ascribed to the
product by our customers and confirms its position as a leading product in the
space. Virtual Cabinet Cloud, powered by the Group's Workiro technology, now
provides a richly capable cloud transition path for customers, making Virtual
Cabinet a compelling choice for professional services firms with a wide
variety of cloud and on-premise core business applications and we have now
seen the first Virtual Cabinet customers fully migrate to Workiro, helping us
to improve customer retention and also providing an opportunity for ARPU
enhancement in the future.
Why accounting?
Through SmartVault and Virtual Cabinet, GetBusy is the largest specialist
provider of document management and workflow software into the accounting
sector in our chosen markets of the US, UK and ANZ.
Our commitment to the accounting market is based on a number of compelling
factors that collectively evidence a substantial opportunity on which we are
very well placed to capitalise.
The US accounting sector alone employs 1.2 million people, including over
650,000 Certified Public Accountants within over 130,000 firms. Cloud
technology adoption across the sector, particularly in the tax preparation
market, is relatively early stage. The market is dominated by a handful of
large tax software providers whose clients overwhelmingly use legacy
on-premise software due to its familiarity and rich functionality. The
transition of the sector to the cloud has been gradual but is accelerating.
Specialist productivity tools are increasingly a priority for small accounting
firms. Declining numbers are entering the profession in the US; the Bureau
of Labor Statistics is projecting an annual shortfall of some 50,000 newly
qualified accountants over the next decade. This labour shortage is a
catalyst for two trends that are favourable for our solutions. Firstly,
firms are focusing on optimising practitioner efficiency by implementing
simple, no-code workflow automations like those enabled through SmartVault and
its integrations into the major tax software applications. Secondly, firms
are making increasing use of outsourcing, including through offshore
providers, to plug the labour gap, making a cloud-first technology stack
essential for secure and efficient collaboration.
Technology adoption is also being driven by the rising participation of
private equity in the accounting sector. This is leading to a consolidation
of accounting firms across the size spectrum and a concerted drive for
mandated technology adoption, as the "lifestyle" model of partnerships gives
way to the growth- and efficiency-focused mindset of professional management
installed by private equity. All firms will need to follow to remain
competitive. Cloud technologies that optimise the productivity of expensive
and scarce knowledge-workers are clear beneficiaries of this shift.
These accounting-specific trends are in addition to the broader drivers of the
productivity and security software market for professional services firms:
· Strengthening data privacy regulation and more robust enforcement
means accounting firms are expected by their clients to adopt technologies
that safeguard sensitive data.
· A more hostile cybersecurity environment has driven data security
to the top of the agenda at even the smallest of firms. Accounting firms have
become a focus for cyber attacks due to the exceptionally sensitive data held;
the relatively unsophisticated IT practices that persist in a proportion of
the sector makes those firms particularly vulnerable.
· Hybrid working and the increasing mobility of the workforce are
prevalent in the accounting sector, in which a competitive labour market
forces firms to adopt employee-friendly work policies to make them more
attractive to scarce talent. This trend drives the adoption of cloud
technologies that enable remote employees to work securely and efficiently.
Competition in the space, particularly in the automation of document
workflows, remains relatively benign. Generic document management providers
- though sometimes substantially larger than GetBusy - lack the depth of
integration with accounting and tax preparation software that specialist
providers can offer and that are critical to workflow optimisation. The
document capabilities embedded within many of the accounting practice
management software suites are usually ageing, limited in functionality and
starved of investment. Specialist providers, like SmartVault and Virtual
Cabinet, are few as the barriers to entry are high, both technically and in
brand recognition.
All of these factors reinforce our commitment to building a highly valuable
business focused on the accounting sector.
Investing to capitalise on the long-term growth opportunity
The Group is committed to sustained investment, from its current funds and
further self-generated cash resources, in the pursuit of both medium- and
long-term growth.
We believe there is a substantial long-term growth opportunity for software
that supports the productivity of knowledge workers, enhances their working
day by improving workflows, and contributes to the profitability of the
organisations that employ them. This opportunity is supported by enduring
structural drivers such as stricter regulatory requirements, a more hostile
cybersecurity landscape, tightening labour markets and increasing workforce
flexibility demands.
By remaining focused on specific, valuable markets, in particular the
accounting market, we can build a high quality, sticky customer base for whom
our products have infrastructural characteristics. We believe our base of
customers can become strategically very attractive as a result of the access
we have to a very well-defined set of customers with similar software
requirements.
Whilst medium-term growth is expected to be driven largely by the accounting
market, in which we are experienced and proven, growth over the longer-term is
expected to be significantly enhanced by the opening of larger enterprise
markets and the provision of ECM solutions via Workiro. As in accounting, we
expect success to come through the depth of our integrations with other
mission-critical software platforms, such as ERP. The scale of the Workiro
opportunity warrants the sustained investments we are making with the
expectation that the solution will open substantially larger markets over the
longer term.
Current trading and outlook
Our balance sheet is strong. Our markets are resilient. Our products solve
relatable, practical problems. Our customer base is loyal. 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.
2024 has started well, with continued growth across the Group through a
combination of new business, expansion and price improvement. We expect the
investment and improvement to our customer acquisition functions made during
2023, together with strong expansion revenue from existing customers, to
contribute to enhanced growth rates during 2024 and beyond.
The board remains excited about the Group's prospects to deliver exceptional
shareholder value over the long-term, and looks forward to the future with
increasing confidence.
Financial review
Group 2023 2022 Change
Reported currency Constant currency
ARR at 31 December £20,524k £19,240k 7% 10%
Recurring revenue £20,311k £18,281k 11% 12%
Total revenue £21,112k £19,293k 9% 10%
Adjusted EBITDA £1,045k £692k 51%
Adjusted loss before tax £(629)k £(746)k 16%
Paying users at 31 December 73,057 75,058 (3%)
ARPU at 31 December £281 £256 10% 12%
Net revenue retention 100.0% 100.2% n/a
Recurring revenue was up 12% at constant currency (11% at reported currency)
to £20.3m (2022: £18.3m), with good contributions from across the Group
aided by strong opening ARR positions. The UK was up 18% to £8.0m (2022:
£6.7m), buoyed by the migration of a large proportion of our clients to the
Virtual Cabinet Unlimited "all-in" pricing plan in the second half of 2022
through to April 2023. The US was up 11% at constant currency (10% at
reported currency) to £10.4m (2022: £9.5m), with a combination of new
business, improved churn and expansion revenue from the introduction of the
Accounting Unlimited plan in November.
ARR, which is our recurring revenue runrate, grew by 10% at constant currency
to £20.5m (31 December 2022: £19.2m), driven by a combination of new
business and the favourable ARPU impact from expansion and monetisation offset
by churn, particularly from lower ARPU accounts. ARPU increased 12% at
constant currency to £281, and users were down 3% as a result of our strategy
of focusing on higher-value accounting and professional services customers
with strong integrations. Non-professional services customers have a
disproportionate impact on user numbers (particularly in SmartVault in which
non-accountant plans typically have higher minimum user counts) but bring a
fraction of the lifetime value to the Group of an accounting or professional
services customer. Accounting per-user pricing is typically double that of
non-accounting and accountants are less than a third as likely to churn as
non-accountants.
Net revenue retention remained strong in the period at 100.0% per month (2022:
100.2%) due to improving churn rates across the Group (0.8% per month,
compared to 0.9% in 2022), the impact of the final set of UK customers moving
to the Virtual Cabinet Unlimited pricing plan during H1, and expansion revenue
from the successful introduction of our Accounting Unlimited plan in
SmartVault in November. 2022 included very strong comparatives for
monetisation in the UK.
Non-recurring revenue of £0.8m was, as expected, down on 2022 (£1.0m)
following the effective completion of the process to convert older Virtual
Cabinet customers onto pure SaaS models. Total revenue was up 9% (10% at
constant currency) to £21.1m (2022: £19.3m).
Gross margin of 90.1% (2022: 89.9%) reflects the benefit of higher ARPU (which
doesn't impact platform costs in the way that user volume does). Over the
longer term, we expect gross margin to reflect the greater weighting of cloud
revenues from SmartVault and Workiro, which carry a higher cost of sale than
our on-premise products.
Sales, general and administrative costs of £14.8m (2022: £13.5m) largely
reflect the investments made in scaling the sales teams in the US, for
SmartVault, together with people and culture and cyber resilience, offset by
lower performance incentive costs.
Total development expenditure was up 6% to £4.8m (2022: £4.6m) with
headcount essentially flat during the year. £1.7m of development costs were
capitalised (2022: £1.4m) across Workiro and SmartVault relating to a
combination of new integrations, core functionality and new capabilities.
Adjusted EBITDA was up 51% to £1.0m (2022: £0.7m), whilst Adjusted Loss,
which is stated before development capitalisation, saw a 16% improvement at
£(0.6)m (2022: £(0.7)m).
Depreciation and amortisation was £0.9m (2022: £0.6m) as a result of the
higher gross capitalised value of development costs arising from Workiro costs
starting to be capitalised in 2022.
Long-term incentive costs of £0.3m were a little higher (2022: £0.2m).
There was a small credit for share-based payments (2022: charge of £0.3m)
as a result of the reversal of cumulative charges for certain option schemes
that are considered highly unlikely to vest. £0.3m of the charge (2022:
£nil) relates to long-term cash incentive schemes for senior management
within our US business.
Non-underlying costs of £0.2m (2022: £0.4m) comprise corporate restructuring
costs linked to the creation of separate intermediate holding company
structures and trading companies for each of the Group's businesses and
management support functions, together with costs associated with the
settlement of historic US sales tax liabilities.
Non-lease finance costs relate to the Group's new £2m revolving credit
facility, which remained undrawn over the period.
The loss before tax was £0.5m (2022: £0.5m). The tax credit of £0.3m
(2022: credit of £0.6m) reflects a conservative estimate of the expected UK
research and development tax credit offset by overseas tax payable in the US,
Australia and New Zealand and the write-off of £0.2m of withholding tax that
is unlikely to be recoverable. The reduction is mostly a result of the ongoing
changes being made to the calculation of tax credits for UK SMEs, the first of
which came into effect from 1 April 2023 and will materially reduce the value
of the Group's cash tax credit in future years.
Cashflow and working capital
In addition to the £0.6m adjusted loss, the £1.0m cash outflow comprised the
following key movements:
· A deferred revenue reduction of £0.1m, reflecting a greater
proportion of SmartVault new business being on monthly-paid subscriptions as
opposed to annual, particularly revenue through resale partners;
· A £0.6m reduction in payables, mostly arising from lower
performance incentives, offset by a £0.3m increase in provisions;
· A £0.2m reduction in receivables following strong cash collection
during the year;
· £0.3m of capital expenditure, including subcontracted software
development work;
· £0.2m of non-underlying restructuring cash costs;
· A £0.5m net tax inflow, comprising £1.0m in research and
development tax credits in the UK offset by foreign tax payments.
Cash at 31 December 2023 was £1.9m (31 December 2022: £3.0m), underpinned by
a £2m undrawn revolving credit facility committed until February 2027, which
remained undrawn over the period.
Balance sheet
The £1.1m increase in intangible assets in 2023 to £3.6m is principally a
result of capitalised development costs exceeding amortisation levels.
Purchased software, mostly associated with the quoting and form-fill
technology investments made in 2021, also contributed to the increase.
Lease assets decreased in the year to £0.9m, mostly as a result of the
continued use of the Group's existing office facilities, offset by a new
2-year lease for the Group's Sydney office.
Trade and other receivables decreased by £0.2m to £1.9m, mostly a result of
improved cash collection on trade receivables offset by higher prepayments
arising from timing differences. The current tax receivable of £0.8m
relates mostly to the UK research and development tax credit due for the 2023
financial year; this is a c. 40% reduction on 2022's research and development
tax credit as a result of the changes to the UK's tax regime. The £0.4m of
tax payable within current liabilities relates to Australia and New Zealand.
The £0.3m reduction in trade and other payables and provisions is chiefly the
result of lower performance incentive accruals, offset by higher tax and
social security.
Deferred revenue, which is mostly derived from annual subscriptions paid in
advance was down slightly at £6.5m.
The lease liability of £1.2m relates to our Cambridge, Houston and Sydney
office premises.
The increase in provisions of £0.3m relates chiefly to the implementation of
a long-term incentive scheme within the Group's US business.
Over the course of 2023, 892,857 new shares were issued as a result of the
exercise of share options.
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2023
2023 2022
Note £'000 £'000
Revenue 3 21,112 19,293
Cost of sales (2,095) (1,952)
Gross profit 19,017 17,341
Operating costs (19,389) (17,754)
Net finance costs (137) (130)
Loss before tax (509) (543)
Loss before tax (509) (543)
Depreciation and amortisation on owned assets 941 563
Long-term incentive costs 312 329
Social security costs on long-term incentives 21 (120)
Non-underlying costs 196 389
Finance costs not related to leases 84 74
Adjusted EBITDA 1,045 692
Capitalised development costs (1,674) (1,438)
Adjusted loss before tax (629) (746)
Tax 282 571
(Loss) / profit for the year attributable to owners of the Company (227) 28
(Loss) / earnings per share (pence)
Basic 4 (0.45p) 0.06p
Diluted 4 (0.45p) 0.05p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
2023 2022
£'000 £'000
(Loss) / profit for the year (227) 28
Other comprehensive income - items that may be subsequently reclassified to
profit or loss
Currency movement on net investment 158 (126)
Exchange differences on translation of foreign operations 42 (254)
Other comprehensive income net of tax 200 (380)
Total comprehensive income for the year (27) (352)
CONSOLIDATED BALANCE SHEET
For the year ended 31 December 2023
2023 2022
£'000 £'000
Non-current assets
Intangible assets 3,620 2,486
Right of use assets 913 1,184
Property, plant and equipment 299 382
4,832 4,052
Current assets
Trade and other receivables 1,867 2.104
Current tax receivable 610 1,064
Cash and cash equivalents 1,942 2,972
4,419 6,140
Total assets 9,251 10,192
Current liabilities
Trade and other payables (3,585) (3,914)
Deferred revenue (6,544) (6,659)
Provisions (504) (559)
Lease liabilities (423) (371)
Current tax payable (146) (536)
(11,202) (12,039)
Non-current liabilities
Lease liabilities (741) (1,131)
Provisions (326) -
(1,067) (1,131)
Total liabilities (12,269) (13,170)
Net liabilities (3,018) (2,978)
Equity
Share capital 76 75
Share premium account 3,018 3,018
Demerger reserve (3,085) (3,085)
Retained earnings (3,027) (2,986)
Equity attributable to shareholders of the parent (3,018) (2,978)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share premium account
Share capital Demerger Retained earnings
Reserve Total
2023 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 75 3,018 (3,085) (2,986) (2,978)
Loss for the year - - - (227) (227)
Other comprehensive income, net of tax - - - 200 200
Total comprehensive income for the year - - - (27) (27)
Issue of ordinary shares 1 - - - 1
Equity-based long-term incentive credit - - - (14) (14)
Total transactions with owners of the Company 1 - - (14) (13)
At 31 December 2023 76 3,018 (3,085) (3,027) (3,018)
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
Other comprehensive income, net of tax - - - (380) (380)
Total comprehensive income for the year - - - (352) (352)
Issue of ordinary shares 1 - - - 1
Equity-based 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)
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2023
2023 2022
£'000 £'000
(Loss) / profit for the year (227) 28
Finance costs 137 130
Income tax credit (282) (571)
Depreciation of right of use asset 316 277
Depreciation of property, plant and equipment 169 163
Amortisation of intangible assets 772 400
Long-term incentive cost 312 329
Decrease/(increase) in receivables 172 (197)
(Decrease)/increase in payables (584) 548
Increase/(decrease) in provisions 271 (120)
(Decrease)/increase in deferred income (114) 1,187
Cash generated from operations 942 2,174
Interest paid (84) (74)
Income taxes received 519 675
Net cash generated from operating activities 1,377 2,775
Purchases of property, plant and equipment (90) (118)
Purchases of intangible assets (232) (339)
Capitalised internal development costs (1,674) (1,438)
Net cash used in investing activities (1,996) (1,895)
Principal portion of lease payments (371) (306)
Interest on lease liabilities (53) (56)
Proceeds on issue of shares 1 1
Net cash used in financing activities (423) (361)
Net (decrease)/increase in cash (1,042) 519
Cash and cash equivalents at beginning of year 2,972 2,670
Effects of foreign exchange rates 12 (217)
Cash and cash equivalents at end of year 1,942 2,972
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.
The presentation of the balance relating to social security costs on long-term
incentives has been amended in the current year. Presentation as a provision
is considered to more closely align with the nature of the balance, which is
uncertain in both timing and amount. For comparability purposes, the prior
year presentation has been amended. The balance was previously presented as
"Social security costs on long-term incentives" within trade and other
payables. Consequential amendments have also been made to the consolidated
cash flow statement, in respect of the prior year. "(Decrease)/increase in
payables" increased from £428k to £548k and "Increase/(decrease) in
provisions reduced from £nil to £(120k).
In accordance with Section 435 of the Companies Act 2006, the Group confirms
that the financial information for the years ended 31 December 2023 and 2022
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 2022 have been delivered to the Registrar of Companies.
The statutory accounts for the year ended 31 December 2023 have been audited
and approved but have not yet been filed. The Group's audited financial
statements for the year ended 31 December 2023 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 25 March 2024.
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 to 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 such as
interest on loan amounts not drawn down. 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. Additional revenue analysis is presented by
territory.
2023
UK USA Aus/NZ Total
£'000 £'000 £'000 £'000
Recurring revenue 7,979 10,407 1,925 20,311
Non-recurring revenue 295 458 48 801
Revenue from contracts with customers 8,274 10,865 1,973 21,112
Cost of sales (2,095)
Gross profit 19,017
Sales, general and admin costs (14,807)
Development costs (4,839)
Adjusted loss before tax (629)
Capitalisation of development costs 1,674
Adjusted EBITDA 1,045
Depreciation and amortisation on owned assets (941)
Long-term incentive costs (312)
Social security on long-term incentives (21)
Non-underlying costs (196)
Other finance costs (84)
Loss before tax (509)
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)
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. (LOSS) / EARNINGS PER SHARE
The calculation of (loss) / earnings per share is based on the loss of £227k
(2022: profit of £28k).
Weighted number of shares calculation 2023 2022
'000 '000
Weighted average number of ordinary shares 50,378 49,621
Effect of potentially dilutive share options in issue - 7,341
Weighted average number of ordinary shares (diluted) 50,378 56,962
Earnings per share 2023 2022
Pence pence
Basic (0.45p) 0.06
Diluted (0.45p) 0.05
At 31 December 2023, there were 6,276,380 share options (2022: 7,169,236).
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 current 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 2023 2022 as originally reported Constant currency adjustment 2022 at constant exchange rates Change at reported exchange rates Change at constant exchange rates
Group recurring revenue £20,311k £18,281k (£149k) £18,131k 11% 12%
Group total revenue £21,112k £19,293k (£148k) £19,145k 9% 10%
Group Annualised Recurring Revenue £20,524k £19,240k (£497k) £18,743k 7% 10%
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