REG - GetBusy PLC - Trading Update

GetbusyAnnouncement

16/01/2019 07:00

RNS Number : 1843N
GetBusy PLC
16 January 2019
 


16 January 2019
GetBusy plc
Trading Update
22% recurring revenue growth*. Cash ahead of expectations. GetBusy beta launch.
GetBusy plc ("GetBusy", the "Company" or the "Group") (AIM: GETB) is pleased to provide an update on trading for the year ended 31 December 2018.
Following on from the Group's strong trading in the first half of 2018, trading in the second half has continued at a similar pace. The Group expects to report that total revenue increased approximately 20% to £10.9m, on a constant currency basis. Adjusted EBITDA is expected to be in-line with expectations while cash as at 31 December 2018 was substantially better than expected at £2.5m, compared to £2.4m at 30 June 2018.
Growth in the Group's high quality recurring subscription revenue, at constant currency for the full year, was 22% with the growth rate in the UK accelerating to 17% following strong order intake and the transition to a pure subscription model.  Annualised Monthly Recurring Revenue at 31 December 2018 was £10.3m, an increase of 19% at constant currency.
In early December, we launched the new website and public beta for our GetBusy client chat and productivity app.  This exciting development marks the start of our search for product-market fit for GetBusy and allows us to significantly increase the volume of beta users from whom we are obtaining feedback to iterate the product.  Early indicators of cost-per-lead and conversion rates have been encouraging.
We are well progressed in the migration of our cloud-based SmartVault product from self-managed servers to Amazon Web Services ("AWS"), improving speed, reliability and security for our customers while ensuring the product is highly scalable.  A one-off, non-underlying provision of £0.1m will be taken in 2018 for onerous contractual costs related to the previous self-managed server infrastructure.
The Group expects to announce its Final Results for the year ended 31 December 2018 on 5 March 2019.
Daniel Rabie, CEO of GetBusy, commented:
"Our dedicated and motivated team has made tremendous progress in 2018, our first full year as an independent public company, during which we've delivered a solid set of results, with cash and revenue ahead of expectations.
"Recurring revenue from Virtual Cabinet and SmartVault has continued to grow at strong rates due to the combined impact of favourable LTV:CAC ratios, low net MRR churn and a well-executed GDPR campaign.  We're well progressed with the migration of SmartVault to AWS, which will contribute to the product being as scalable as its transactional business model.  And we've moved into an exciting phase for our new product, GetBusy, with the launch of the new website and public beta. 
"As we look ahead to 2019, we will continue to invest in the growth of high quality recurring subscription revenues from SmartVault and Virtual Cabinet.  As the volume of beta users for GetBusy increases we will continue to learn from the data we gather and iterate the product and marketing strategy accordingly.  2019 looks set to be an exciting year."
* Recurring revenue growth quoted at constant currency.  A glossary of certain terms can be found in the Notes section.
 
Enquiries:
GetBusy plc
Daniel Rabie (Chief Executive Officer)                                  +44(0) 845 166 1165
Paul Haworth (Chief Financial Officer)                                  +44(0) 845 166 1165
Grant Thornton UK LLP (Nomad)
Philip Secrett / Jamie Barklem / Seamus Fricker                 +44 (0)20 7383 5100
Liberum Capital Limited (Broker)
Bidhi Bhoma / Cameron Duncan                                            +44 (0)20 3100 200
Walbrook PR (UK PR & IR adviser)
Paul Cornelius / Nick Rome / Sam Allen                                +44(0)20 7933 8780
getbusy@walbrookpr.com
 
About GetBusy
GetBusy is an established, successful, award-winning Document Management software business, with operations in the UK, USA, Australia and New Zealand, providing over 61,500 customers with a highly secure form of digital document distribution with the flexibility to suit any business or industry. It has found particular success in the accountancy, legal and financial services verticals. Over 1 million users are registered to share information through GetBusy's online client portals.
The Group has three core product offerings:
·     Virtual Cabinet is Document Management software focused on the medium size to enterprise size markets. It is used by 27 of the 100 largest accounting firms in the UK and 25 of the top 100 accounting firms in Australia and New Zealand;
 
·     SmartVault is an award-winning Document Management software targeting the professional small and medium enterprise market, long established in the USA and subsequently launched in the UK and Australia;
 
·     GetBusy (in public beta) is a new client chat and productivity product which we anticipate will help customers create stronger relationships with less effort, help users become more organised and productive, and reduce their administrative burden.
The Group has an international reach, rapidly growing existing products, a proven business model, and strong momentum moving into the future.
Further information on the Group is available at www.getbusy.com.
Notes
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 EBITDA.  This is calculated as operating profit / loss before certain items, which are listed below along with an explanation as to why they are excluded:
Depreciation and amortisation.  These non-cash charges to the income statement are subject to significant judgement.  Excluding them from this measure removes the impact of that judgement and provides a measure of profit that is more closely aligned with cashflow.
Share option costs.  Significant judgement is applied in calculating the fair value of share options and subsequent charge to the income statement, which has no cash impact.  The impact of potentially dilutive share options is also taken into account in diluted earnings per share.  Therefore, excluding share option costs from Adjusted EBITDA 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.  There are also many examples of companies being criticised for using the capitalisation and amortisation of development costs as a method of manipulating profit, due to the substantial management judgement involved in applying the standard.  To assist transparency, we exclude the impact of capitalising development costs from Adjusted EBITDA 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 after Adjusted EBITDA and before operating profit.
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 EBITDA and recorded separately. In all cases, a full description of their nature is provided.
Constant currency measures.  Where a change rate is quoted being at "constant currency", the comparative figure has been restated at the same exchange rate as the current year figure.  So, for example, for 2018 constant currency revenue growth, 2017 revenue is restated using 2018's exchange rates.
Glossary of terms
The following terms are used within these interim financial statements:
MRR.  Monthly recurring revenue.  That is, the monthly value of subscription and support revenue, both of which are classified as recurring revenue. 
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.  Life time 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 MRR churn.  The average percentage of MRR lost or gained (if negative) in a month due to the combined impact of customers leaving our platforms, customers upgrading or downgrading their accounts and price increases or reductions.
 
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014. THE PERSON RESPONSIBLE FOR MAKING THIS ANNOUNCEMENT ON BEHALF OF THE COMPANY IS PAUL HAWORTH.




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