TIDMGETB
RNS Number : 4138R
GetBusy PLC
01 March 2023
1 March 2023
GetBusy plc
2022 Audited Results
Growth strategy delivering
GetBusy plc ("GetBusy", the "Company" or the "Group") (AIM:
GETB), a leading provider of productivity software for professional
and financial services, announces its audited results for the year
ended 31 December 2022.
2022 2021 Change
GBP'000 GBP'000 Reported currency Constant currency***
------------------
ARR 19,240 15,828 22% 16%
------------------ ---------------------
Recurring revenue 18,281 14,343 27% 21%
-------- -------- ------------------ ---------------------
Total revenue 19,293 15,448 25% 19%
-------- -------- ------------------ ---------------------
Adjusted EBITDA* 692 (510) n/a
-------- -------- -----------------------------------------
Adjusted loss before tax** (746) (1,222) 39%
-------- -------- -----------------------------------------
Loss before tax (543) (2,335) 77%
-------- -------- -----------------------------------------
Cash 2,972 2,670 11%
-------- -------- -----------------------------------------
Financial highlights
-- 27% recurring revenue growth (21% at constant currency)
to GBP18.3m
-- 25% total revenue growth (19% at constant currency) to
GBP19.3m
-- ARR growth of 22% (16% at constant currency) to GBP19.2m
with healthy new business, improving churn and successful
monetisation
-- Recurring revenue comprises 95% of total revenues (2021:
93%)
-- Gross margin remains strong at 89.9% (2021: 91.6%) with
greater volume of cloud revenue
-- First year of positive Adjusted EBITDA at GBP0.7m (2021:
GBP(0.5)m) - with majority of incremental revenue reinvested
for growth in line with strategic roadmap
-- Increased cash of GBP3.0m (2021: GBP2.7m) validates self-funding
model, underpinned by new committed GBP2.0m facility, which
remains entirely undrawn
Operational highlights
-- Over one billion unique documents now stored securely in
our products, with 250million documents and three million
digital signatures handled annually
-- 300,000 trees and 14,000 tonnes of CO(2) cumulatively saved
by customers through our paperless solutions
-- Group ARPU up 13% at constant currency to GBP256 (2021:
GBP216)
-- 2% increase in paying users to 75,058 (2021: 73,352)
-- Strong net revenue retention of 100.2% per month (2021:
99.8%), reflecting successful fair-price monetisation efforts
and value customers ascribe to our solutions
-- Launched major new channel partnership with Right Networks,
targeting SmartVault to its substantial base of over 8,500
accounting firms
-- Strengthened position in insolvency market through integration
and referral partnership with Turnkey IPS
-- Merged Virtual Cabinet and Workiro operations to leverage
our enterprise capabilities and expertise for the ERP market
-- Awarded SuiteCloud International Partner of the Year for
Workiro application
Outlook
-- Targeting sustained double-digit ARR growth
-- Ramping investment in sales and marketing through 2023
-- Strong start to 2023
Daniel Rabie, CEO of GetBusy, comments:
"2022 was another fantastic year with 25% revenue growth,
strong, double-digit ARR growth and our first Adjusted
EBITDA-positive period, leading to a third consecutive year of cash
generation. Against a difficult economic backdrop, our products are
solving real, practical, and universal challenges for our customers
in large, under-penetrated and resilient markets, supported by
enduring the themes of productivity, cyber-security, mobility and
privacy.
"Our strategy of investing for long-term, sustainable growth
from a stable platform with excellent visibility is validated.
"Moving into 2023 we plan to capitalise further on these
valuable market opportunities through sustained investment in
customer acquisition across the Group as we enter the next exciting
phase of our scaling journey."
*Adjusted EBITDA is Adjusted Loss before Tax with capitalised
development costs added back. A full list of our alternative
performance measures, together with a glossary of certain terms,
can be found in note 2.
** Adjusted Loss before Tax is Loss before tax, depreciation and
amortisation on owned assets, long-term incentive costs, net
capitalised development costs, finance costs that are not related
to leases, and non-underlying items.
*** Changes at constant currency are calculated by retranslating
the comparative period at the current period's prevailing rate of
exchange.
A copy of the presentation to investors and the audited annual
report will be available on the Company's website, at
www.getbusyplc.com shortly.
GetBusy plc
investors@getbusy.com
finnCap (Nominated Adviser and Broker)
Matt Goode / Charlie Beeson / Milesh Hindocha
(Corporate Finance) +44 (0)20 7220
Alice Lane / Harriet Ward (ECM) 0500
Alma PR (Financial PR) +44 (0)20 7886
Hilary Buchanan / Andy Bryant / Hannah Campbell 2500
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION (EU) NO 596/2014 AS IT FORMS PART OF UK
DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018
("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. THE
PERSON RESPONSIBLE FOR MAKING THIS ANNOUNCEMENT ON BEHALF OF THE
COMPANY IS PAUL HAWORTH.
About GetBusy
GetBusy's specialist productivity software solutions enable
growing businesses to work securely and efficiently with their
customers, suppliers and teams anytime, anywhere. Our solutions can
be delivered flexibly across cloud, mobile, hosted and on-premise
platforms, whilst integrating seamlessly with a wide variety of
other class-leading core business systems.
With over 75,000 paying users and over 3 million collaborators
across multiple market sectors and jurisdictions, GetBusy is an
established and fast-growing SaaS business delivering sustained
double-digit growth in high-quality recurring subscription revenue
over the long term.
Further information on the Group is available at
www.getbusyplc.com
Chairman's Statement
GetBusy is firmly focused on sustainable recurring revenue
growth within a large, well-defined, robust and valuable market
opportunity.
More than ever, GetBusy's products are delivering tangible value
across a growing addressable market. Annually, we handle more than
250 million documents for our customers, who execute over 3 million
digital signatures and share information with over 3 million
collaborators. Our products have saved around 300,000 trees and
14,000 tonnes of CO2 by helping our customers to go paperless.
We are helping professionals to be as productive, efficient, and
secure as possible in the face of rising cost pressures and
operational complexities. Our very high - and improving - customer
retention rates demonstrate how embedded our growing range of
capabilities have become within our clients' technology stacks; a
trend we expect to continue as the tailwinds of digital
transformation, cyber security, privacy legislation and hybrid
working strengthen.
I am delighted with the progress the business has made in 2022.
Together with the headline growth rates generated by our core
businesses, there has been significant progress in our efforts to
underpin longer-term growth, including through our emerging
products. Significant new customer wins, new channel partnerships,
the introduction of new capabilities to our customer base and
prestigious industry awards have all been notable landmarks, but
the foundation of these achievements remains the provision of a
compelling proposition for new and existing customers.
On behalf of the Board, I would like to thank each member of our
teams in Cambridge, Houston and Sydney for their commitment in
2022. Across the business, our people consistently exhibit
ingenuity, tenacity, ambition and humanity; they are our most
valuable asset and the reason for our success.
In 2022, we have re-examined each of our markets and products
and concluded there is substantial long term value to be created by
continuing to invest in the growth of our high quality recurring
subscription revenue. Our industry-leading levels of recurring
revenue endow us with excellent forecasting visibility which,
twinned with our cash-generative underlying SAAS business model -
proven over the five and a half years since GetBusy's inception -
provides a stable platform to continue to invest for growth.
In 2021 we announced our ambition to at least double Annual
Recurring Revenue within five years. I am pleased to report that
ambition remains firmly on track.
CEO's review - a clear focus on growth
Since IPO, GetBusy has achieved over 18% compound annual growth
in ARR. Over 95% of our revenue is recurring in nature - amongst
the highest in the UK market. 2022 was GetBusy's third consecutive
year of cash generation and our first year of positive Adjusted
EBITDA. Our business model has enabled us to achieve growth since
our IPO in a cash neutral fashion - we raised GBP3m in 2017 and, 5
years on, we have GBP3m of cash. Our markets are large and
under-penetrated and we solve real-life, practical problems for our
customers, making our products sticky. Against the current
difficult economic backdrop, never has the relevance of our
products been more apparent as we help customers to be efficient
and secure in the face of rising costs. Our strategy of investing
for long-term, sustainable growth from a stable platform with
excellent visibility is validated.
Growing recurring subscription revenue remains our key
focus.
The reliable and predictable revenue runrate from software
subscriptions provides a solid foundation for mid- to long-term
planning. Our high gross margins, strong customer retention rates
and the favourable working capital profile arising from a high
proportion of customers paying annually in advance, de-risk the
investments we can make to drive future growth. Our business model,
allows us to double down responsibly on growth investment in an
otherwise cautious macro-economic environment, building a highly
valuable base of customer cashflows that have annuity
characteristics.
As we move into 2023, we are setting up the business to
capitalise on the market opportunity with a clear focus on
accelerating our customer acquisition, which ultimately underpins
long term growth. We are making significant investments in our US
sales and marketing operations for SmartVault, to strengthen its
already robust position in a highly attractive market, and in the
UK we are leveraging the substantial enterprise experience from
Virtual Cabinet to penetrate the ERP space with Workiro.
We are excited to begin this next chapter in our growth
story.
27% growth in recurring revenue - predictable, scalable and
valuable
Recurring revenue growth in 2022 was driven by continued
execution against the Group's consistent growth strategy: new
customers and markets, customer retention, monetisation and product
expansion.
ARR grew 16% at constant currency to GBP19.2m (2021: GBP15.8m),
through a combination of new customer acquisition, strong customer
retention rates and improved pricing within our established
products.
Predictable
Users were up 2% to 75,058 with new business contributing
significantly to this growth. Predictability is key to our customer
acquisition model; we have consistently returned more than GBP4 in
customer lifetime value for every GBP1 spent on acquiring a new
customer. Once acquired, our customers tend to be sticky: gross
churn is resilient, averaging 0.9% per month, an improvement on
2021 (1.0%) despite the anticipated increase arising from higher
monetisation.
ARPU was up 13% at constant currency to GBP256. The size of our
customer base enables us to draw valuable insights from users,
informing product development and the retention activities of our
customer success teams. That insight also proves the value of the
productivity benefits delivered to our customers, enabling us to
set fair prices for our new and existing clients with confidence.
These price movements have been the core driver of ARPU in 2022,
contributing GBP2.4m in ARR over the year from both the SmartVault
and Virtual Cabinet products.
Our strong net revenue retention of 100.2% per month (2021:
99.8%) - meaning revenue from our customer base on average grows
each month before the addition of new customers - provides us with
outstanding visibility over near-term growth, built from a very
stable foundation of predictable recurring revenue.
The absence of significant customer concentration contributes to
the reliability of revenue generated from our customer base; no
single client accounts for more than 2% of revenue.
Scalable
The professional and financial services markets that the Group
targets are large and under-penetrated. GetBusy's software
portfolio adds a productivity layer to core business applications,
simplifying workflows, improving productivity, enhancing security
and delighting clients. With the strong and enduring tailwinds of
digital transformation, privacy legislation, mobility and cyber
security, these supportive market dynamics will provide substantial
growth opportunities for the Group for years to come. Many
organisations are still very early on their software automation or
optimisation journeys, and the depth of our expertise within these
markets positions us well to provide an ever-increasing set of
solutions to customers on that journey.
Our strong LTV:CAC ratio of 4:1 (2021: 4:1) allows us to
increase our customer acquisition spend with a high degree of
confidence in the anticipated returns. Typically, more than 65% of
our direct customers elect for contracts that are paid annually in
advance, providing us with structural working capital benefits that
fund additional investment in growth. Our high gross margin of
89.9% (2021: 91.6%) means there are minimal incremental operating
costs from acquiring new customers, which in the long term leads to
substantial operating leverage and cash generation.
The strength of our integrations with core business
applications, such as practice management or tax preparation
software, contributes to our healthy customer retention. Those
integrations also provide channel opportunities for us, enabling us
to leverage a partner's access to well-defined customers, improving
customer acquisition scalability. Major new partners signed in 2022
include Right Networks, which has an installed base of over 8,500
accounting firms, and Turnkey IPS, the leading insolvency practice
management provider. SmartVault's partnership with Right Networks
was launched commercially in December, with the first customers now
onboarded, and we anticipate traction to build in that channel
throughout 2023.
Channels are also a key part of our customer acquisition
strategy for our emerging products Workiro and Certified Vault,
with the former increasing the number of NetSuite value-added
reseller partners to 8 during 2022.
Valuable
GetBusy focuses on the professional and financial services
markets, with over 70% of revenue derived from the accountancy
sector. These markets have remained buoyant during 2022 and
historically have proved relatively resilient in the face of
significant economic uncertainty. The battle to recruit and retain
professional talent, and the well-documented related inflationary
challenges, will drive increased adoption of productivity and
automation tools. The insolvency sector, a key growth area for
GetBusy, is expected to become particularly active as the strain of
three years of extraordinary financial pressures takes its toll on
vulnerable sectors and practitioners increasingly adopt fixed-fee
models, providing a catalyst for efficiency improvements.
The degree to which our products are embedded in our customers'
everyday workflows, and integrated into other mission-critical
applications, contributes to our low churn rates and high levels of
net revenue retention. This leads to a subscription revenue base
that has valuable annuity characteristics; the Group's customer
base at its initial public offering in 2017 generates more ARR
today than it did then as a result of strong retention, increased
penetration, revenue expansion from upsell and price uplifts. Over
time these revenue streams underpin highly profitable businesses,
something we have evidenced with the more mature parts of our
business achieving comfortably over 40% Adjusted Adjusted EBITDA
margins.
This high-quality customer base has considerable strategic
value.Through over 20 years of product and brand development, we
have, through our portfolio of innovative products, built leading
positions in attractive markets with high barriers to entry.
Transaction multiples paid within the broader professional services
software market validate the importance of those customer
relationships and how selling additional products to those
customers can create significant value over the long term. Our
continuing investments in additional capabilities are made with
this in mind. Over the longer term, we expect our emerging
products, including Workiro and Certified Vault, to contribute more
meaningfully to growth as the products mature and brand recognition
is established.
Current trading and outlook
Our balance sheet is strong. Our markets are resilient. Our
products solve relatable, practical problems. Our customer base is
sticky. Our revenue is highly predictable.
This enables us to continue to reinvest incremental revenues
into acquiring new customers and delivering additional value to
existing customers, to sustain double-digit ARR growth over the
long-term.
The strong ARR momentum from 2022 has continued into 2023, with
robust January trading. We have started to scale our investments in
customer acquisition, including in sales and marketing heads, in
both the US and UK and we expect those investments to deliver
meaningful returns over the medium-term.
The Board is tremendously excited about the Group's prospects to
deliver exceptional shareholder value over the long-term and looks
forward to the future with increasing confidence.
Business and financial review
Group 2022 2021 Change
Reported Constant
currency currency
---------- ----------
ARR at 31 December GBP19,240k GBP15,828k 22% 16%
----------- ------------ ---------- ----------
Recurring revenue GBP18,281k GBP14,343k 27% 21%
----------- ------------ ---------- ----------
Total revenue GBP19,293k GBP15,448k 25% 19%
----------- ------------ ---------- ----------
Adjusted EBITDA GBP692k GBP(510)k n/a
----------- ------------ ----------------------
Adjusted loss before
tax GBP(746)k GBP(1,222)k 39%
----------- ------------ ----------------------
Paying users at 31
December 75,058 73,352 2%
----------- ------------ ----------------------
ARPU at 31 December GBP256 GBP216 19% 13%
----------- ------------ ---------- ----------
Net revenue retention 100.2% 99.8% n/a
----------- ------------ ----------------------
Established products
SmartVault and Virtual Cabinet have clear leading positions in
their respective markets.
SmartVault has particular strength within the SME accounting and
tax space in the US, a market which we estimate to exceed $250m in
ARR. SmartVault is the only fully-integrated cloud document
management provider for Intuit's leading Lacerte and ProSeries tax
preparation products; the workflow productivity benefits from this
tight integration lead to outstanding customer retention rates,
typically five times better than for the broader customer base.
SmartVault's product development continued apace during 2022.
Our recently released e-mail capture capability was iterated, and
we introduced custom-branded e-mail messaging, a significantly
updated and refreshed user interface, an overhaul of some of the
features for account administrators and the beta-release of the
form-fill and quoting technology integrations. These developments
help us to retain clients and create distinctive points of value
that allow us to price and package the product effectively,
creating upgrade paths for customers. Feedback from beta customers
on the form-fill and quoting technologies has been positive -
particularly in the case of form-fill- and we have subsequently
moved into general release, with revenue contribution expected to
become impactful in 2024.
Virtual Cabinet further enhanced its position in the insolvency
sector, creating integration partnerships with Turnkey IPS, the
leading practice management provider, and Postworks, the digital
mailroom provider, both of which are key players in the sector.
This position is strengthened through Virtual Cabinet's integration
with Workiro, providing a clear path for customers embarking on
their cloud journey whilst retaining the class-leading capabilities
of Virtual Cabinet and its deep integrations into a wide range of
core professional applications.
As well as a refreshed user interface and branding for Virtual
Cabinet, next-generation search capabilities were developed and
launched together with user analytics, improved OneDrive
integration and improved document retention capabilities.
The Workiro technology is also proving to be an attractive cloud
pathway for many Virtual Cabinet customers, with substantial
overlap between the requirements of the ERP market and Virtual
Cabinet's established and target customer base.
Emerging products
Our emerging products provide further growth potential for the
Group. Each addresses a validated productivity need within a
clearly identified and large market that shares the favourable
characteristics and helpful tailwinds of our core professional
services markets.
Workiro provides intuitive document management, task,
communication and approval capability, targeted at users of ERP
systems, with an initial focus on Oracle's NetSuite application,
into which Workiro is deeply integrated. NetSuite's installed base
of over 33,000 enterprise customers provides a considerable market
opportunity for Workiro, with the broader cloud ERP market being
significantly larger.
Workiro established a presence within the NetSuite ERP space
during 2022, signing 8 reseller partners and winning SuiteCloud
International Partner of the Year at the key SuiteWorld event. We
expect our channel partners to contribute significantly to a
scalable customer acquisition model over the long term,
complementing our direct strategy. Given the typical size of many
ERP-using businesses, moving into 2023 we have consolidated our
customer acquisition efforts for Workiro and Virtual Cabinet,
leveraging the latter's substantial enterprise experience and
generating operational efficiencies as Workiro starts to scale.
Certified Vault was introduced into the asset finance market in
the US in 2021, providing secure custody of electronic chattel
paper on behalf of secured lending institutions. Following an
encouraging start towards the end of 2021, we tempered customer
acquisition during 2022 while we further develop and prepare the
product, and the surrounding operational infrastructure, for the
rigorous security and compliance demands of the larger financial
services market. This essential work, which will create a very
solid and sustainable foundation for Certified Vault in what is a
large, highly attractive and under-served market, is progressing
well. We expect to complete the first of our major security
certifications for the market by early H2 2023, with the second,
more robust certification by the end of the year. Ultimately this
work should allow us to develop sales channels through asset
finance providers, providing a high degree of scalability to the
model. In the meantime, acquisition of smaller end customers in the
space is allowing us to refine the product and our operational
processes.
Income statement
Recurring revenue grew 27% (21% at constant currency) to
GBP18.3m (2021: GBP14.3m), reflecting the strong ARR momentum
carried forward at the start of the year and the subsequent ARR
growth, in particular from the fair-price monetisation efforts in
the UK and US.
US recurring revenue growth was strongest in the year, up 55%
(35% at constant currency) to GBP9.5m (2021: GBP6.1m), entirely
driven by SmartVault, in which solid customer acquisition was
supported by excellent monetisation and improved churn. Growth in
the UK was 7% to GBP6.7m (2021: GBP6.3m); the introduction of
Virtual Cabinet Unlimited, our "all-in" pricing plan, and the
migration of a large proportion of customers to that plan.
Australia and New Zealand, in which our products are
well-penetrated, was up 5% at GBP2.0m (2021: GBP2.0m), and the
region remains strongly profitable for the Group.
Non-recurring revenue of GBP1.0m was, as expected, down a little
compared to 2021 following the effective completion of the process
to convert older Virtual Cabinet customers onto pure SaaS models.
Total revenue was up 25% (19% at constant currency) to GBP19.3m
(2021: GBP15.4m).
Gross margin of 89.9% (2021: 91.6%) reflects the greater
proportion of revenue from our cloud products, most notably
SmartVault, as opposed to on-premise products for which there is
very little cost of sale.
SG&A costs of GBP13.5m (2021: GBP11.6m) reflect a number of
investments across the business to underpin future growth and
improve the infrastructure of the Group to support additional
scale. This includes investments in customer acquisition teams
across the Group, customer success teams, which drive customer
retention and expansion revenue campaigns, and a
professionalisation of our cyber security and operations
capabilities. We continued to build out our product development
functions to support capability improvements across the Group, and
developer costs of GBP4.6m were 20% higher (2021: GBP3.8m), partly
due to currency but with additional investment mostly in the
US.
GBP1.4m of development costs were capitalised (2021: GBP0.7m),
including a variety of capability enhancements across Virtual
Cabinet and SmartVault and elements of the core application builds
for Certified Vault and Workiro. The increase compared to 2021 is a
result of Workiro, for which no costs were capitalised prior to
2022, and which met the criteria for capitalisation under IAS38
Intangible Assets during the year.
Adjusted EBITDA was GBP0.7m (2021: GBP(0.5)m), whilst Adjusted
Loss, which is stated before development capitalisation, was
GBP(0.7)m (2021: GBP(1.2)m).
The reduction in depreciation and amortisation to GBP0.6m was
principally a result of a change to the useful economic life of
capitalised development costs to 5 years (previously 3 years),
following a management review; the longer life better reflects the
software development and commercial lifecycles of the Group.
Share option costs were a little lower at GBP0.3m (2021:
GBP0.4m) following the conclusion of the vesting period of some of
the options during the year, with no new grants made. The credit
for employment taxes due on the exercise of options of GBP0.1m
(2021: charge of GBP0.3m)is ultimately is linked to the Company's
share price, which is used in the calculation of the provision.
Non-underlying costs of GBP0.4m (2021: GBP0.4m) comprise
corporate restructuring costs of GBP0.2m together with a GBP0.2m
increase in the provision for potential historic sales tax
liabilities in certain jurisdictions in the US. The restructuring
will be completed in H1 2023 and creates separate intermediate
holding company structures and trading companies for each of the
Group's businesses and management support functions. The Group's
registrations for sales tax in the relevant US jurisdictions are
now largely complete and settlements are expected to be made in H1
2023. No further material costs are expected in 2023.
Non-lease finance costs relate solely to the Group's debt
facility with Silicon Valley Bank and include an accelerated
amortisation of residual capitalised facility fees as a result of
the cancellation of the facility on 28 February 2023 and subsequent
replacement with a GBP2million unsecured facility from a
director.
The loss before tax was GBP0.5m (2021: GBP2.3m). The tax credit
of GBP0.6m (2021: credit of GBP0.8m) reflects the expected UK
research and development tax credit offset by overseas tax payable
in Australia and New Zealand.
Cashflow and working capital
2022 was the third straight year of net cash inflows, achieved
despite the Adjusted Loss before Tax of GBP(0.7)m. Key cash
movements in 2022 included:
-- Deferred revenue increased by GBP1.2m as a result of the
continued ARR growth and the large proportion of our new business
that is paid annually in advance;
-- Trade and other payables increased by GBP0.4m, due to a combination of smaller factors;
-- Net tax receipts were GBP0.7m, with UK research and
development credits offset by tax payments in Australia and New
Zealand; and
-- Capital expenditure (excluding capitalised internal
development costs) was GBP0.5m (2021: GBP0.3m), with the increase
due mostly to additions to purchased software, mostly from
enhancements to the DocDown and Quoters technologies commissioned
from the vendors of those assets.
Cash at 31 December 2022 was GBP3.0m, an increase of GBP0.3m
from 31 December 2021.
Loan facility
The GBP2m secured revolving credit facility with Silicon Valley
Bank remained entirely undrawn during the year. On 28 February
2023, this facility was cancelled as certain covenants contained
within it were no longer considered to be appropriate for the
Group's growth strategy. In its place, the Group entered into a
4-year GBP2m unsecured credit facility (the "New Facility") with
Clive Rabie, a non-executive director. Under the facility, interest
is charged on drawings at a margin of 6.0% above the Bank of
England base rate. An availability fee of 75% of the margin is
payable on undrawn amounts. The New Facility contains covenants
related to the Group's ARR, which must remain above GBP18.0m and
grow at no less than 5.0% annually.
The new facility remains undrawn at the date of this report.
Balance sheet
The GBP1.4m increase in intangible assets in 2022 to GBP2.5m is
a result of both higher capitalised development costs, as a result
of Workiro development meeting the capitalisation criteria for the
first time, and lower amortisation following a change to the useful
economic life of the Group's development costs from 3 years to 5
years. Purchased software, mostly associated with the technology
acquisitions of DocDown and Quoters and the implementation of a new
billing system for SmartVault, also contributed to the
increase.
Lease assets decreased in the year to GBP1.2m, mostly as a
result of the continued use of the Group's existing office
facilities.
Trade and other receivables increased by GBP0.2m to GBP2.1m as a
result of an increase in prepayments and the impact of a stronger
USD. The current tax receivable of GBP1.1m relates to the UK
research and development tax credit due for the 2022 financial
year, with GBP0.5m of tax payable or refundable in the UK,
Australia and New Zealand, which is recorded within current
liabilities.
The GBP0.4m increase in trade and other payables is chiefly the
result of higher accruals, including for historic US sales taxes.
Additionally, trade payables were GBP0.3m higher due to the timing
of invoicing from suppliers.
Deferred revenue, which is mostly derived from annual
subscriptions paid in advance has increased by GBP1.2m to GBP6.7m,
driven mostly by the increase in recurring revenue.
The lease liability of GBP1.5m relates to our Cambridge and
Houston office premises.
Over the course of 2022, 98,412 new shares were issued as a
result of the exercise of share options.
Future developments
On a constant currency basis, the Group expects to deliver
sustained double-digit growth in recurring revenue. Non-recurring
revenue is expected to comprise an ever decreasing proportion of
total revenue as the focus remains firmly on subscription revenue
streams.
Over 50% of the Group's recurring revenue is denominated in USD.
Material fluctuations in prevailing exchange rates can have a
material impact on reported revenue growth, although the Group has
no material transactional currency exposure.
Gross margins will continue to trend slightly downwards,
reflecting product mix, with the Group's high-margin Virtual
Cabinet product becoming a smaller part of the overall mix. The
additional investments in sales and marketing across the Group are
expected to have a c. GBP1m impact on the cost base during
2023.
Two factors will likely influence the cashflow profile of the
Group in the medium term.
-- The UK is reforming its regime for research and development
tax credits, making the scheme less favourable for smaller
companies. This is likely to reduce the typical tax credit
available to the Group by around 50% from 2024 onwards.
-- Whilst around 75% of new customers pay annually in advance
for their subscription, certain new channel partnerships have been
negotiated on the basis of monthly payments, to reflect the
partners' model with end users. This may reduce the cashflow
benefit typically obtained through deferred revenue, although it is
still expected that the Group's direct customers will retain the
favourable cashflow profile.
Related Party Transactions
Incentive Plans
On 28 February 2023 the Company introduced the 2023 GetBusy Cash
Distribution Plan to incentivise and reward significant realised
value creation for shareholders ("CDP"). Daniel Rabie and Paul
Haworth are participants in the CDP.
In designing and implementing the CDP, the Committee took advice
from PwC, a remuneration consultant, as well as consulting with the
majority of the Company's larger institutional shareholders, who
all supported its implementation.
Awards under the CDP vest if the Company makes a gross cash
distribution to shareholders in excess of GBP70 million and up to
GBP150 million within a 7 year period from the implementation date
of the plan. An adjustment is made to the value of any award under
the CDP to take account of any vested share options that have
previously been exercised by the participants, thereby preventing
participants benefiting from both the CDP and a distribution in
respect of any exercised share options.
At a gross cash distribution of GBP70m (the "Entry Point"), the
award paid to Daniel Rabie under the CDP, the VCP and the EMI Chare
Option Plan would be GBP5.0m and the award paid to Paul Haworth
would be GBP1.75m. These amounts are based on the approximate
values that, absent the CDP, would otherwise be paid on the
participants' fully vested and exercised share options.
Above the Entry Point to a gross cash distribution of GBP120m
(the "Target Point"), the participants earn a linearly increasing
share of the incremental distribution above the Entry Point. Daniel
Rabie's share increases from 7.0% at the Entry Point to 15.0% at
the Target Point. Paul Haworth's share increases from 2.5% at the
Entry Point to 10.0% at the Target Point. Above the Target Point,
the share of the incremental gross cash distribution earned remains
at 15.0% for Daniel Rabie and 10.0% for Paul Haworth up to a
maximum award payable at a gross cash distribution of GBP150m (the
"Stretch Point").
Given the potential size of the cash awards, entry into the CDP
constitutes a related party transaction as a result of the
operation of AIM Rule 13 of the AIM Rules.
Daniel Rabie and Paul Haworth, by virtue of being directors of
the Company, are each considered to be a related party of the
Company and given the potential size of the cash awards, entry into
the CDP constitutes a related party transaction for the purposes of
Rule 13 of the AIM Rules for Companies. GetBusy's independent
directors for this purpose (being Miles Jakeman, Nigel Payne and
Paul Huberman) consider, having consulted with the Company's
nominated adviser, finnCap Ltd ("finnCap"), that the terms of the
CDP and the participation in the new CDP are fair and reasonable
insofar as the Company's shareholders are concerned.
Loan facility
Clive Rabie, by virtue of being a director of the Company, is
considered to be a related party of the Company. The Company's
entry into the New Facility with Clive Rabie constitutes a related
party transaction for the purposes of Rule 13 of the AIM Rules for
Companies. GetBusy's independent directors for this purpose (being
Paul Haworth, Miles Jakeman, Nigel Payne and Paul Huberman)
consider, having consulted with the Company's nominated adviser,
finnCap Ltd ("finnCap"), that the terms of the New Facility are
fair and reasonable insofar as the Company's shareholders are
concerned.
CONSOLIDATED INCOME STATEMENT
2022 2021
Note GBP'000 GBP'000
Revenue 3 19,293 15,448
Cost of sales (1,952) (1,295)
Gross profit 17,341 14,153
Operating costs (17,754) (16,355)
Net finance costs (130) (133)
Loss before tax (543) (2,335)
Loss before tax (543) (2,335)
Depreciation and amortisation on owned
assets 563 706
Long-term incentive costs 329 400
Social security costs on long-term incentives (120) 267
Non-underlying costs 389 400
Finance costs not related to leases 74 52
--------- ---------
Adjusted EBITDA 692 (510)
Capitalised development costs (1,438) (712)
--------- ---------
Adjusted loss before tax (746) (1,222)
----------------------------------------------- ----- --------- ---------
Tax 571 771
--------- ---------
Profit / (loss) for the year attributable
to owners of the Company 28 (1,564)
========= =========
Earnings / (loss) per share (pence)
Basic 4 0.06p (3.16)p
Diluted 4 0.05p (3.16)p
========= =========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2022 2021
GBP'000 GBP'000
Profit/(loss) for the year 28 (1,564)
-------- --------
Other comprehensive income - items
that may be subsequently reclassified
to profit or loss
Exchange differences on translation
of foreign operations (380) (17)
Other comprehensive income net of tax (380) (17)
-------- --------
Total comprehensive income for the
year (352) (1,581)
======== ========
CONSOLIDATED BALANCE SHEET
2022 2021
GBP'000 GBP'000
Non-current assets
Intangible assets 2,486 1,110
Right of use assets - leases 1,184 1,544
Property, plant and equipment 382 426
4,052 3,080
--------- -----------
Current assets
Trade and other receivables 2,104 1,907
Current tax receivable 1,064 1,021
Cash and bank balances 2,972 2,670
--------- -----------
6,140 5,598
--------- -----------
Total assets 10,192 8,678
--------- -----------
Current liabilities
Trade and other payables (4,473) (3,917)
Deferred revenue (6,659) (5,469)
Lease liabilities (371) (333)
Current tax payable (536) (378)
(12,039) (10,097)
--------- -----------
Non-current liabilities
Deferred revenue - (4)
Lease liabilities (1,131) (1,533)
(1,131) (1,537)
--------- -----------
Total liabilities (13,170) (11,634)
--------- -----------
Net assets (2,978) (2,956)
========= ===========
Equity
Share capital 75 74
Share premium account 3,018 3,018
Demerger reserve (3,085) (3,085)
Retained earnings (2,986) (2,963)
--------- -----------
Equity attributable to shareholders
of the parent (2,978) (2,956)
========= ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
Share
Share premium Demerger Retained
capital account Reserve earnings Total
2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2022 74 3,018 (3,085) (2,963) (2,956)
Profit for the year - - - 28 28
Exchange differences on translation
of foreign operations, net
of tax - - - (380) (380)
Total comprehensive income
for the year - - - (352) (352)
Issue of ordinary shares 1 - - - 1
Long-term incentive costs - - - 329 329
Total transactions with owners
of the Company 1 - - 329 330
At 31 December 2022 75 3,018 (3,085) (2,986) (2,978)
========== ========= =========== =========== ==========
Share
Share premium Demerger Retained
capital account Reserve earnings Total
2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2021 74 3,018 (3,085) (1,782) (1,775)
---------- --------- ----------- ----------- ----------
Loss for the year - - - (1,564) (1,564)
Exchange differences on translation
of foreign operations, net
of tax - - - (17) (17)
---------- --------- ----------- ----------- ----------
Total comprehensive income
for the year - - - (1,581) (1,581)
Long-term incentive costs - - - 400 400
---------- --------- ----------- ----------- ----------
Total transactions with owners
of the Company - - - 400 400
At 31 December 2021 74 3,018 (3,085) (2,963) (2,956)
========== ========= =========== =========== ==========
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2022
2021
2022 (restated)
GBP'000 GBP'000
Profit / (loss) for the year 28 (1,564)
Finance costs 130 133
Income tax credit (571) (771)
Depreciation of right of use asset 277 316
Depreciation of property, plant and
equipment 163 133
Amortisation of intangible assets 400 573
Long-term incentive cost 329 400
Increase in receivables (197) (92)
Increase in payables 428 1,360
Increase in deferred income 1,187 806
Cash generated from operations 2,174 1,294
Interest paid (74) (52)
Income taxes received 675 623
Net cash generated from operating
activities 2,775 1,865
-------- -------------
Purchases of property, plant and equipment (118) (181)
Purchases of intangible assets (339) (163)
Capitalised internal development costs (1,438) (712)
-------- -------------
Net cash used in investing activities (1,895) (1,056)
-------- -------------
Principal portion of lease payments (306) (261)
Interest on lease liabilities (56) (81)
Proceeds on issue of shares 1 -
Net cash used in financing activities (361) (342)
-------- -------------
Net increase in cash 519 467
Cash and bank balances at beginning
of year 2,670 2,283
Effects of foreign exchange rates (217) (80)
-------- -------------
Cash and bank balances at end of year 2,972 2,670
======== =============
The presentation of the reconciliation of profit to cash
generated from operations has been amended in the current year. The
starting point of profit/loss for the year rather than adjusted
loss before tax is considered to be a more appropriate presentation
as profit/(loss) for the year is a statutory IFRS measure. For
comparability purposes, the prior year presentation has been
amended.
Notes to the financial information
1. GENERAL INFORMATION
GetBusy plc is a public limited company ("Company") and is
incorporated in England under the Companies Act 2006. The company's
shares are traded on the Alternative Investment Market ("AIM"). The
Company's registered office is Suite 8, The Works, Unity Campus,
Pampisford, Cambridge, CB22 3FT. The Company is a holding company
for a group of companies ("Group") providing productivity software
for professional and financial services.
These financial statements are presented in pounds sterling
(rounded to the nearest thousand) because that is the currency of
the primary economic environment in which the group operates.
In accordance with Section 435 of the Companies Act 2006, the
Group confirms that the financial information for the years ended
31 December 2022 and 2021 are derived from the Group's audited
financial statements and that these are not statutory accounts and,
as such, do not contain all information required to be disclosed in
the financial statements prepared in accordance with UK-adopted
International Accounting Standards. The statutory accounts for the
year ended 31 December 2021 have been delivered to the Registrar of
Companies. The statutory accounts for the year ended 31 December
2022 have been audited and approved but have not yet been filed.
The Group's audited financial statements for the year ended 31
December 2022 received an unqualified audit opinion and the
auditor's report contained no statement under section 498(2) or
498(3) of the Companies Act 2006. The financial information
contained within this full year results statement was approved and
authorised for issue by the Board on 28 February 2023.
2. ALTERNATIVE PERFORMANCE MEASURES AND GLOSSARY OF TERMS
The Group uses a series of non-IFRS alternative performance
measures ("APMs") in its narrative and financial reporting. These
measures are used because we believe they provide additional
insight into the performance of the Group and are complementary to
our IFRS performance measures. This belief is supported by the
discussions that we have on a regular basis with a wide variety of
stakeholders, including shareholders, staff and advisers.
The APMs used by the Group, their definition and the reasons for
using them, are provided below:
Recurring revenue . This includes revenue from software
subscriptions and support contracts. A key part of our strategy is
to grow our high-quality recurring revenue base. Reporting
recurring revenue allows shareholders to assess our progress in
executing our strategy.
Adjusted Loss before Tax . This is calculated as loss before tax
and before certain items, which are listed below along with an
explanation as to why they are excluded:
Depreciation and amortisation of owned assets. These non-cash
charges to the income statement are subject judgement. Excluding
them from this measure removes the impact of that judgement and
provides a measure of profit or loss that is more closely aligned
with operating cashflow. Only depreciation on owned assets is
excluded; depreciation on leased assets remains a component of
Adjusted Loss because, combined with interest expense on lease
liabilities, it is a proxy for the cash cost of the leases.
Long-term incentive costs . Judgement is applied in calculating
the fair value of long-term incentives, including share options,
and the subsequent charge to the income statement, which may differ
significantly to the cash impact in quantum and timing. The impact
of potentially dilutive share options is also considered in diluted
earnings per share. Therefore, excluding long-term incentive costs
from Adjusted Loss before Tax removes the impact of that judgement
and provides a measure of profit that is more closely aligned with
cashflow.
Capitalised development costs . There is a very broad range of
approaches across companies in applying IAS38 Intangible assets in
their financial statements. For transparency, we exclude the impact
of capitalising development costs from Adjusted Loss before Tax in
order that shareholders can more easily determine the performance
of the business before the application of that significant
judgement. The impact of development cost capitalisation is
recorded within operating costs.
Non -underlying costs. Occasionally, we incur costs that are not
representative of the underlying performance of the business. In
such instances, those costs may be excluded from Adjusted Loss
before Tax and recorded separately. In all cases, a full
description of their nature is provided. .
Finance costs not related to leases . These are finance costs
and income such as interest on bank balances. It excludes the
interest expense on lease liabilities under IFRS16 because,
combined with depreciation on leased assets, it is a proxy for the
cash cost of the leases.
Adjusted EBITDA . This is calculated as Adjusted Loss before Tax
with capitalised development costs added back.
Constant currency measures . As a Group that operates in
different territories, we also measure our revenue performance
before the impact of changes in exchange rates. This is achieved by
re-stating the comparative figure at the exchange rate used in the
current period.
Glossary of terms
The following terms are used within these financial
statements:
MRR. Monthly recurring revenue. That is, the monthly value of
subscription and support revenue, both of which are classified as
recurring revenue.
ARR . Annualised MRR. For a given month, the MRR multiplied by
12.
CAC . Customer acquisition cost. This is the average cost to
acquire a customer account, including the costs of marketing staff,
content, advertising and other campaign costs, sales staff and
commissions.
LTV. Lifetime value, calculated as the average revenue per
account multiplied by the average gross margin and divided by gross
MRR churn.
MRR churn . The average percentage of MRR lost in a month due to
customers leaving our platforms.
Net revenue retention . The average percentage retained after a
month due to the combined impact of customers leaving our
platforms, customers upgrading or downgrading their accounts and
price increases or reductions.
ARPU . Annualised MRR per paid user at a point in time.
3. Revenue and operating segments
The Group's chief operating decision maker is considered to be
the Board of Directors. Performance of the business and the
deployment of capital is monitored on a group basis and so the
Group has a single reportable segment. Additional revenue analysis
is presented by territory.
2022
UK USA Aus/NZ Total
GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 6,739 9,498 2,044 18,281
Non-recurring revenue 511 419 82 1,012
------------ ---------- ---------- -------------
Revenue from contracts
with customers 7,250 9,917 2,126 19,293
Cost of sales (1,952)
-------------
Gross profit 17,341
Sales, general and admin
costs (13,526)
Development costs (4,561)
-------------
Adjusted loss before
tax (746)
Capitalisation of development
costs 1,438
-------------
Adjusted EBITDA 692
Depreciation and amortisation
on owned assets (563)
Long-term incentive
costs (329)
Social security on long-term
incentives 120
Non-underlying costs (389)
Other finance costs (74)
-------------
Loss before tax (543)
=============
2021
UK USA Aus/NZ Total
GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 6,280 6,119 1,944 14,343
Non-recurring revenue 661 365 79 1,105
------------ ---------- ---------- -------------
Revenue from contracts
with customers 6,941 6,484 2,023 15,448
Cost of sales (1,295)
-------------
Gross profit 14,153
Sales, general and admin
costs (11,588)
Development costs (3,787)
-------------
Adjusted loss before
tax (1,222)
Capitalisation of development
costs 712
-------------
Adjusted EBITDA (510)
Depreciation and amortisation
on owned assets (706)
Long-term incentive
costs (400)
Social security on long-term
incentives (267)
Non-underlying costs (400)
Other finance costs (52)
-------------
Loss before tax (2,335)
=============
Recurring revenue is defined as revenue from subscription and
support contracts. Non-recurring revenue is defined as all other
revenue. No customer represented more than 10% of revenue in either
year.
4. Earnings / (loss) per share
The calculation of earnings per share is based on the profit for
the year of GBP28k (2021: loss of GBP1,564k).
Weighted number of shares calculation 2022 2021
'000 '000
Weighted average number of ordinary
shares 49,621 49,516
Effect of potentially dilutive 7,341 -
share options in issue
------------------ -------
Weighted average number of ordinary
shares (diluted) 56,962 49,516
================== =======
Earnings per share 2022 2021
Pence pence
Basic 0.06 (3.16)
======= =======
Diluted 0.05 (3.16)
======= =======
At 31 December 2022, there were 7,169,236 share options (2021:
7,527,629). As required by IAS33 (Earnings per Share), the impact
of potentially dilutive options was disregarded for the purposes of
calculating diluted loss per share in the prior year as the Group
was loss making.
5. Reconciliation of Alternative Performance Measures - constant currency
A number of our key performance indicators are provided at
"constant currency". The percentage change in a KPI is shown
assuming the current year exchange rate is used to translate both
the current year and prior year figures. The table below reconciles
the constant currency figures to those reported.
Performance 2022 2021 Constant 2021 Change Change
measure as originally currency at constant at reported at constant
reported adjustment exchange exchange exchange
rates rates rates
-------------------- ----------- --------------- ------------ ------------- ------------ ------------
Group recurring
revenue GBP18,281k GBP14,343k GBP746k GBP15,089k 27% 21%
Group total revenue GBP19,293k GBP15,448k GBP787k GBP16,235k 25% 19%
Group Annualised
Recurring Revenue GBP19,240k GBP15,828k GBP788k GBP16,616k 22% 16%
-------------------- ----------- --------------- ------------ ------------- ------------ ------------
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END
FR UWRKROOUUUAR
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March 01, 2023 02:00 ET (07:00 GMT)
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