REG - GetBusy PLC - 2023 Half-year Results
05/09/2023 07:00
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RNS Number : 3412L GetBusy PLC 05 September 2023
5 September 2023
GetBusy plc
2023 Half-year Results
Significant value creation continues
GetBusy plc ("GetBusy", the "Company" or the "Group") (AIM: GETB), a leading
provider of productivity software for professional and financial services,
announces its unaudited results for the six months ended 30 June 2023 (the
"Period", "H1" or "H1 2023").
H1 2023 H1 2022 Change
£'000 £'000 Reported currency Constant currency(***)
Group ARR 20,121 18,068 11% 14%
Group recurring revenue 10,102 8,519 19% 16%
Group total revenue 10,521 9,070 16% 13%
Group adjusted EBITDA* 164 24 583%
Group adjusted loss before tax** (603) (724) 17%
Group loss before tax (782) (879) 11%
Cash 1,659 2,131 (22)%
Financial highlights
· Recurring revenue growth of 16% at constant currency to £10.1m
(H1 2022: £8.5m)
· Recurring revenue comprises 96% of total revenues (H1 2022: 94%)
· ARR growth of 14% at constant currency to £20.1m (H1 2022:
£18.1m) and up 7% at constant currency since the start of the year
· Gross margin remains strong at 89.9% (H1 2022: 90.4%) with
greater volume of cloud revenue
· Adjusted EBITDA of £164k (H1 2022: £24k)
· Cash of £1.7m (H1 2022: £2.1m) remains strong, underpinned by
undrawn committed £2.0m facility with total of £3.7m available growth
capital
Operational highlights
· Strong net revenue retention of 100.5% per month (H1 2022:
100.6%), reflecting successful fair-price monetisation efforts and lower gross
churn
· Group ARPU up 14% at constant currency to £275 (H1 2022: £245)
· 0.7% reduction in paying users to 73,126 (H1 2022: 73,667),
reflecting strategy to focus on higher value customers
· Launched major new integration for SmartVault with Thomson
Reuters' UltraTax application, opening promising new accounting markets within
US
· Workiro now signed 20 partners in the ERP ecosystem
Outlook
· Our core markets remain robust, driven by structural changes in
the way people work and a strengthening mandate for security and productivity
optimisation
· The Group's underlying trading continues to be in line with market
expectations(****), remaining modestly profitable at the Adjusted EBITDA(*)
level during H2 2023 as it continues to invest in long-term growth, with
strong cash inflows from H2-weighted customer renewals
Daniel Rabie, CEO of GetBusy, comments:
"We have made significant progress during H1 2023 in setting up the Group to
capitalise on the expanding market opportunity ahead of us, while delivering
16% constant currency growth in recurring subscription revenue.
"We are investing for near-term growth through customer acquisition and
ensuring our long-term prospects are underpinned by innovative products
serving large markets with the compelling and resilient growth drivers of
productivity, cyber-security, mobility and privacy.
"We look forward to bedding-in our investments over the course of H2 with the
expectation that they will deliver enhanced growth into 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.
**** Expectations for the year-ending 31 December 2023 are considered to
comprise Revenue of £21.1m and Adjusted EBITDA of £0.7m.
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
finnCap (Nominated Adviser and Broker) +44 (0)20 7220 0500
Matt Goode / Charlie Beeson / Milesh Hindocha (Corporate Finance)
Charlotte Sutcliffe / 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 70,000 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
Significant value creation
Our focus in 2023 is to structure the business to capitalise on the
substantial market opportunity for productivity software tools in the
accounting and ERP markets. In H1, alongside delivering a 16% constant
currency increase in high quality recurring subscription revenue, we have made
encouraging progress in enlarging the markets available to us, scaling our
customer acquisition engines, increasing average selling price and improving
churn.
In the US, a market that harbours an outstanding opportunity in the accounting
sector, we have re-engineered our entire sales and marketing operational
methodology, improving our ability to scale customer acquisition significantly
over the next few years. With a new structure and process now in place,
supported by major improvements in data insight capabilities, we have started
to make substantial investments in headcount to drive new business, and we
expect the sales team alone to more than double in size over 2023.
Leading technology suppliers to US accountants have selected SmartVault as
their preferred document management application for resale partnerships, for
example Right Networks, the leading cloud service provider that offers the
only intelligent cloud purpose-built for accounting firms and professionals.
SmartVault is now available for purchase by Right Networks' entire base of
8,500 accounting firms (about 20% more than SmartVault's entire customer
count) and we are working with Right Networks to optimise adoption through the
peak Q4 selling season. As well as its strength among users of Intuit's
Lacerte and ProSeries tax applications - with which SmartVault has the leading
document workflow integration - Right Networks is growing among users of
Thomson Reuters' UltraTax product, for which SmartVault launched an
integration in early July that potentially doubles its medium-term market
opportunity. UltraTax's user base is comparable in size to Intuit's Lacerte
product but typically across larger firms, with higher average selling price
for SmartVault and lower churn rates. We expect to pursue additional
integration partnerships during H2 to further broaden our accessible market
and cement SmartVault's position as the dominant specialist document workflow
software for US accountants.
SmartVault's form-filling and quoting capabilities, which were acquired at the
end of 2021, are now available to customers as elective add-ons. Together
with our e-signature integration, these add-ons allow us to build more
progressive pricing and packaging structures to increase ARPU among our most
engaged customers, and we expect to launch those packages to customers in
early 2024.
Our US business obtained the key ISO27001 information security certification
during H1 and is now pursuing the complementary SOC2-1 accreditation. 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. Additionally, these enhanced security credentials are essential
for the asset finance providers served by our CertifiedVault product; we
expect to allocate a very modest level of capital for customer acquisition in
the asset finance market over the balance of 2023 while we complete the
certification processes.
Virtual Cabinet largely completed the transition of its customer base to the
"all-in" Unlimited 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.
Workiro has continued to make progress with its enterprise content management
("ECM") offering for the ERP market. Over H1 we more than doubled the number
of partners within the NetSuite ecosystem and sales pipelines are beginning to
build. With the feedback we have received from partners, customers and
NetSuite themselves, we are confident that Workiro's ECM capabilities, both
existing and those in the near-term roadmap, provide significant value to
large enterprises with complex document workflow requirements and we are very
excited about how Workiro is now positioned in this attractive market.
Whilst enterprise customers tend to have longer sales cycles than those in the
SME segment, in which SmartVault operates, ultimately we expect deal sizes
that are an order of magnitude larger than has historically been the case in
the Group, together with lower churn rates. Over H2 we will continue to
invest in the enterprise capabilities of the product and refine our
go-to-market approach based on our interactions with customers, partners and
enterprise prospects.
Investing to capitalise on the long-term growth opportunity
Despite the current economic backdrop, the Group is committed to sustained
investment, from 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.
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, both technically and in brand
recognition, are high.
All of these factors reinforce our commitment to building a highly valuable
business focused on the accounting sector.
Custodians of rich content for AI
Artificial intelligence ("AI") technology within GetBusy's products has the
potential to bring significant value to our customers, enabling them to
leverage deep insights from the highly valuable content secured within our
applications, substantially enhancing their productivity.
Our product roadmaps include radically re-engineered intelligent content
"search and answer" capabilities, client sentiment analytics and smart
suggestions for the creation and prioritisation of tasks.
Keeping our customers' content secure is the foundation of our business and so
we have created a set of strict development principles that prioritise the
privacy and security of customer content to ensure our customers always retain
full control around the application of AI to their content.
Financial review
Group H1 2023 H1 2022 Change
Reported currency Constant currency
ARR at 30 June £20.1m £18.1m 11% 14%
Recurring revenue £10,102k £8,519k 19% 16%
Total revenue £10,521k £9,070k 16% 13%
Adjusted EBITDA £164k £24k 583%
Adjusted loss before tax £(603)k £(724)k 17%
Paying users at 30 June 73,126 73,667 (1)%
ARPU at 30 June £275 £245 12% 14%
Net revenue retention 100.5% 100.6% n/a
Recurring revenue was up 16% at constant currency (19% at reported currency)
to £10.1m (H1 2022: £8.5m), with good contributions from across the Group
aided by strong opening ARR positions. The UK was up 23% to £3.9m (H1 2022:
£3.2m), 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.
The US was up 14% at constant currency (20% at reported currency) to £5.2m
(H1 2022: £4.3m), with a combination of new business and improved churn.
ARR, which is our recurring revenue runrate, grew by 7% at constant currency
over the six months to 30 June 2023 to £20.1m, which is up 14% at constant
currency compared to 30 June 2022. ARR growth over H1 was driven largely by
higher ARPU, up 10% at constant currency since 1 January 2023 to £275, and a
3% reduction in users as we continue 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 due to improving churn rates across
the Group (0.8% per month, compared to 0.9% in H1 2022) coupled with the final
set of UK customers moving to the Virtual Cabinet Unlimited pricing plan,
averaging 100.5% per month (H1 2022: 100.6%). We expect net revenue
retention to return to more normalised levels over H2.
Non-recurring revenue of £0.4m was, as expected, down a little compared to H1
2022 following the effective completion of the process to convert older
Virtual Cabinet customers onto pure SaaS models. Total revenue was up 16%
(13% at constant currency) to £10.5m (H1 2022: £9.1m).
Gross margin of 89.9% (H1 2022: 90.4%) 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 ongoing cost of sale.
SG&A costs of £7.7m (H1 2022: £6.8m) largely reflect the investments
made in the customer acquisition teams in the US, for SmartVault, and the UK,
for Workiro.
Total development expenditure was up 11% to £2.4m (H1 2022: £2.1m), driven
principally by a small headcount increase. £0.8m of development costs were
capitalised (H1 2022: £0.7m) across Workiro and SmartVault.
Adjusted EBITDA was £0.2m (H1 2022: £nil), whilst Adjusted Loss, which is
stated before development capitalisation, was £(0.6)m (H1 2022: £(0.7)m).
Depreciation and amortisation was down fractionally at £0.4m (H1 2022:
£0.5m) following 2022's change to the useful economic life of capitalised
development costs to 5 years (previously 3 years).
Long-term incentive costs of £0.3m were a little higher (H1 2022: £0.2m),
reflecting new long-term incentive schemes implemented in the period, offset
by a reduction in the share-based payment charge.
Non-underlying costs of £0.2m (H1 2022: £0.1m) 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 £0.8m (H1 2022: £0.9m). The tax credit of £0.1m
(H1 2022: credit of £0.3m) 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. The reduction is 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.
Cashflow and working capital
In addition to the £0.6m adjusted loss, the £1.3m cash outflow comprised:
· A deferred revenue reduction of £0.6m, largely reflecting the
seasonality of annual subscription renewals (which are H2-weighted) and the
timing of billing;
· A £0.3m increase in payables, including employee incentive
accruals;
· £0.3m of capital expenditure, including in subcontracted
software development work;
· £0.1m of non-underlying restructuring cash costs;
· A £0.6m net tax inflow, comprising £1.0m in research and
development tax credits in the UK offset by foreign tax payments.
Cash at 30 June 2023 was £1.7m (30 June 2022: £2.1m), underpinned by a £2m
undrawn revolving credit facility committed until February 2027, which
remained undrawn over the period.
Consolidated income statement
For the six months ended 30 June 2023
H1 2023 H1 2022 FY 2022
Note £'000 £'000 £'000
Unaudited Unaudited Audited
Revenue 3 10,521 9,070 19,293
Cost of sales (1,058) (873) (1,952)
Gross profit 9,463 8,197 17,341
Operating costs (10,176) (9,010) (17,754)
Net finance costs (69) (67) (130)
Loss before tax 3 (782) (880) (543)
Loss before tax (782) (880) (543)
Depreciation and amortisation on owned assets 408 487 563
Long-term incentive costs 262 157 329
Social security on long-term incentives 61 130 (120)
Non-underlying costs 173 99 389
Finance costs not related to leases 42 31 74
Adjusted EBITDA 164 24 692
Capitalised development costs (767) (748) (1,438)
Adjusted loss before tax (603) (724) (746)
Tax 140 332 571
(Loss)/profit for the period attributable to owners of the Company (642) (548) 28
(Loss)/profit per share (pence)
Basic 4 (1.28) (1.10) 0.06
Diluted 4 (1.28) (1.10) 0.05
Consolidated statement of comprehensive income
For the six months ended 30 June 2023
H1 2023 H1 2022 FY 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
(Loss)/profit for the period (642) (548) 28
Other comprehensive items that may be subsequently reclassified to profit or
loss
Exchange differences on translation of foreign operations net of tax 168 (335) (380)
Other comprehensive income net of tax 168 (335) (380)
Total comprehensive income for the period (474) (883) (352)
Consolidated balance sheet
At 30 June 2023
30 June 30 June 31 December 2022
2023 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Non-current assets
Intangible assets 3,144 1,591 2,486
Right of use assets - leases 995 1,463 1,184
Property, plant and equipment 345 426 382
4,484 3,480 4,052
Current assets
Trade and other receivables 2,001 1,939 2,104
Current tax receivable 426 451 1,064
Cash and bank balances 1,659 2,131 2,972
4,086 4,521 6,140
Total assets 8,570 8,001 10,192
Current liabilities
Trade and other payables (4,264) (3,865) (4,473)
Deferred revenue (6,021) (5,701) (6,659)
Lease liabilities (373) (373) (371)
Current tax payable (361) (280) (536)
(11,019) (10,219) (12,039)
Non-current liabilities
Lease liabilities (904) (1,465) (1,131)
(904) (1,465) (1,131)
Total liabilities (11,923) (11,684) (13,170)
Net assets (3,353) (3,683) (2,978)
Equity
Share capital 76 74 75
Share premium account 3,018 3,018 3,018
Demerger reserve (3,085) (3,085) (3,085)
Retained earnings (3,362) (3,690) (2,986)
Equity attributable to shareholders of the parent (3,353) (3,683) (2,978)
Consolidated statement of changes in equity
For the six months ended 30 June 2023
Share premium account
Share capital Demerger Retained earnings
reserve Total
2023 Unaudited £'000 £'000 £'000 £'000 £'000
At 1 January 2023 75 3,018 (3,085) (2,986) (2,978)
Loss for the period - - - (642) (642)
Exchange differences on intercompany balances shown in reserves - - - 168 168
Total comprehensive income for the period - - - (474) (474)
Issue of ordinary shares 1 - - - 1
Long-term incentive costs - - - 98 98
Total transactions with owners of the Company 1 - - 98 99
At 30 June 2023 76 3,018 (3,085) (3,362) (3,353)
Share premium account
Share capital Demerger Retained earnings
Reserve Total
2022 Unaudited £'000 £'000 £'000 £'000 £'000
At 1 January 2022 74 3,018 (3,085) (2,963) (2,956)
Loss for the period - - - (548) (548)
Exchange differences on translation of foreign operations, net of tax - - - (335) (335)
Total comprehensive income for the period - - - (883) (883)
Long-term incentive costs - - - 156 156
Total transactions with owners of the Company - - - 156 156
At 30 June 2022 74 3,018 (3,085) (3,690) (3,683)
Share premium account
Share capital Demerger Retained earnings
Reserve Total
2022 Audited £'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 - - - 329 330
At 31 December 2022 75 3,018 (3,085) (2,986) (2,978)
Consolidated cash flow statement
For the six months ended 30 June 2022
H1 2023 H1 2022 FY 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
(Loss)/profit for the period (642) (548) 28
Finance costs 42 31 130
Income tax credit (140) (332) (571)
Depreciation of - property, plant and equipment 82 87 163
Depreciation on right of use asset - leases 179 194 277
Amortisation on intangible assets 326 400 400
Long-term incentive costs 323 287 329
Decrease/(increase) in receivables 103 (31) (197)
(Decrease)/increase in payables (235) (288) 428
(Decrease)/increase in deferred income (639) 228 1,187
Cash used in operations (601) 28 2,174
Net income taxes received 628 790 675
Interest paid (42) (25) (74)
Net cash from operating activities (15) 793 2,775
Purchases of property, plant and equipment (45) (76) (118)
Purchases of other intangible assets (217) (143) (339)
Capitalised internal development costs (767) (748) (1,438)
Net cash used in investing activities (1,029) (967) (1,895)
Principal portion of lease payments (179) (130) (306)
Interest on lease liabilities (27) (36) (56)
Proceeds on issue of shares 1 - 1
Net cash from financing activities (205) (166) (361)
Net increase/(decrease) in cash (1,249) (340) 519
Cash and bank balances at beginning of period 2,972 2,670 2,670
Effects of foreign exchange rates (64) (199) (217)
Cash and bank balances at end of period 1,659 2,131 2,972
Net cash reconciliation
At 1 January 2023 Cash flow Interest accretion Foreign exchange movement At 30 June 2023
£'000 £'000 £'000 £'000 £'000
Finance lease liability (1,502) 206 (27) 46 (1,277)
Cash and cash equivalents 2,972 (1,251) - (62) 1,659
Net cash (including lease liabilities) 1,470 (1,045) (27) (17) 381
Notes to the financial information
1. General information
These interim financial statements are for the six months ended 30 June
2023. They do not require all the information required for full annual
financial statements and should be read in conjunction with the consolidated
financial statements of the Group for the year ended 31 December 2022.
These financial statements are presented in pounds sterling because that is
the currency of the country in which the Group has its stock market listing
and where most of its investors reside.
2. Basis of preparation and accounting policies
The financial information set out above does not constitute statutory accounts
within the meaning of section s434(3) of the Companies Act 2006 or contain
sufficient information to comply with the disclosure requirements of
UK-adopted International Accounting Standards ("IFRS").
The financial statements of GetBusy plc for the year ended 31 December 2022
were authorised for issue by the Board of Directors on 28 February 2023. The
auditors have reported on these accounts and their reports were unqualified,
did not draw attention to any matters by way of emphasis and did not contain
any statements under s498 (2) or (3) of the Companies Act 2006.
These interim financial statements are prepared on the same basis as the
financial statements for the year ended 31 December 2022, in which our full
set of accounting policies, including critical judgements and key sources of
estimation uncertainty, can be found.
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 Profit / Loss before Tax. This is calculated as profit / 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 that is
more closely aligned with operating cashflow. Only depreciation on owned
assets is excluded; depreciation on leased assets remains a component of
adjusted profit / 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 Profit / Loss before Tax
and recorded separately. In all cases, a full description of their nature is
provided.
Finance costs / (income) 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 Profit / 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.
H1 2023 Unaudited UK USA AUS/NZ Total
£'000 £'000 £'000 £'000
Recurring revenue 3,941 5,179 982 10,102
Non-recurring revenue 155 251 13 419
Revenue from contracts with customers 4,096 5,430 995 10,521
Cost of sales (1,058)
Gross profit 9,463
Sales, general and admin costs (7,701)
Development costs (2,365)
Adjusted loss before tax (603)
Capitalisation of development costs 767
Adjusted EBITDA 164
Depreciation and amortisation on owned assets (408)
Long-term incentive costs (262)
Social security on long-term incentives (61)
Non-underlying costs (173)
Other finance income / (costs) (42)
Loss before tax (782)
H1 2022 Unaudited UK USA AUS/NZ Total
£'000 £'000 £'000 £'000
Recurring revenue 3,207 4,330 982 8,519
Non-recurring revenue 275 233 43 551
Revenue from contracts with customers 3,482 4,563 1,025 9,070
Cost of sales (873)
Gross profit 8,197
Sales, general and admin costs (6,792)
Development costs (2,129)
Adjusted loss before tax (724)
Capitalisation of development costs 748
Adjusted EBITDA 24
Depreciation and amortisation on owned assets (487)
Long-term incentive costs (157
Social security on long-term incentive costs (130)
Non-underlying costs (99)
Other finance income / (costs) (31)
Loss before tax (880)
2022 Audited UK £'000 USA AUS/NZ Total
£'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 costs on share options 120
Non-underlying costs (389)
Other finance income / (costs) (74)
Loss before tax (543)
4. Loss per share
The calculation of loss per share is based on the loss for the period of
£642k (H1 2022: loss of £548k, 2022: profit of £28k).
Weighted number of shares calculation H1 2023 H1 2022 FY 2022
'000 '000 '000
Unaudited Unaudited Audited
Weighted average number of ordinary shares 50,175 49,580 49,621
Effect of potentially dilutive share options in issue n/a n/a 7,341
Weighted average number of ordinary shares (diluted) 50,175 49,580 56,962
Loss per share H1 2023 H1 2022 FY 2022
pence pence pence
Unaudited Unaudited Audited
Basic (1.28) (1.10) 0.06
Diluted (1.28) (1.10) 0.05
At 30 June 2023 there were 7,058,705 shares under option. 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
Period as the Group was loss making.
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