TIDMGETB
RNS Number : 7644E
GetBusy PLC
03 March 2020
3 March 2020
GetBusy plc
2019 Full-year Audited Results
Sustained recurring revenue growth
GetBusy plc ("GetBusy", the "Company" or the "Group") (AIM:
GETB), a developer of document management and communication
software products, announces its audited results for the year ended
31 December 2019.
2019 2018 Change
GBP'000 GBP'000 Reported currency Constant currency(+)
------------------
Group total revenue 12,661 10,865 17% 15%
------------------ ---------------------
Group recurring revenue 11,388 9,468 20% 19%
-------- -------- ------------------ ---------------------
Group adjusted loss before tax* (595) (834) 29% n/a
-------- -------- ------------------ ---------------------
Group loss before tax (1,180) (1,205) 2% n/a
-------- -------- ------------------ ---------------------
Net cash 1,743 2,486 (30)%
-------- -------- -----------------------------------------
Virtual Cabinet revenue 8,325 7,556 10% 11%
-------- -------- ------------------ ---------------------
Virtual Cabinet adjusted profit before tax* 3,372 2,375 42% n/a
-------- -------- ------------------ ---------------------
SmartVault revenue 4,336 3,309 31% 25%
-------- -------- ------------------ ---------------------
SmartVault adjusted loss before tax* (972) (716) (36)% n/a
-------- -------- ------------------ ---------------------
Financial highlights
-- Group recurring revenue up 20% in reported currency and 19%
at constant currency from user growth and higher ARPU
-- 31% total revenue growth in SmartVault (25% at constant
currency) driven by strong US performance
-- 10% total revenue growth in Virtual Cabinet (11% at constant currency)
-- 42% growth in adjusted profit before tax for Virtual Cabinet,
with operating margin up 9 percentage points to 41%
-- Adjusted loss before tax improvement of 29% to GBP(595)k
-- Statutory loss before tax reduced by 2% to GBP(1,180)k
Operational highlights
-- Document Management paying users up 4,307 to 65,850
-- Portal users up 31% to 1.6 million
-- Further improvements to net Monthly Recurring Revenue churn
in Virtual Cabinet (0.1%) and SmartVault (0.0%)
-- SmartVault signed first major channel and integration agreement in UK with TaxCalc
-- GBP1m of investment made in SmartVault customer acquisition
and development to support future growth, including GBP0.4m to
launch into UK market
-- First paying users for GetBusy product
Daniel Rabie, CEO of GetBusy, commented:
"There has been excellent progress towards the strategic
objectives for each of our products in 2019.
"SmartVault's recurring revenue growth has been very strong on
the back of the significant ongoing investments in customer
acquisition and product capabilities. The new year has started very
well; the level of new sales achieved in January was a record by a
substantial margin.
"We are pleased with Virtual Cabinet's operating margin
improvement and impressive cash generation and expect the business
to increase its margin further this year. The product enhancements
we have made during 2019, and continue to make, help to provide
ever increasing value to our user base of over 45,000.
"Obtaining our first paying users for GetBusy has been an
important milestone. We are confident that the product presents a
distinct value proposition for team productivity and we look
forward to building channels and taking the product to market in
2020.
"Within our product portfolio we have an established brand that
is well-respected and highly profitable, a rapidly growing and very
scalable SaaS product that has clear product market fit and a new
entrant that is seeking to carve out a lucrative niche in a sector
that is undergoing disruption. This unique combination of products
is a key enabler of our aim to be a long-term sustainable growth
business."
* Adjusted Profit / (Loss) before Tax has replaced Adjusted
EBITDA as our headline financial performance metric. Adjusted
Profit / (Loss) before Tax is Profit / Loss before share option
costs, net capitalised development costs, finance costs that are
not related to leases, and non-underlying items. A full list of
alternative performance measures can be found in note 2.
(+) Changes at constant currency are calculated by retranslating
the comparative period at the current period's prevailing rate of
exchange. A full reconciliation is provided in Note 5.
A glossary of certain terms can be found in Note 2.
Ahead of today's presentations to investors, a copy of the
presentation to investors is now available on the Company's
website, at www.getbusy.com/about/investors
GetBusy plc
Daniel Rabie (Chief Executive Officer) investors@getbusy.com
Paul Haworth (Chief Financial Officer)
Liberum Capital Limited (Nomad and Broker)
Bidhi Bhoma / Cameron Duncan +44 (0)20 3100 2000
About GetBusy
GetBusy is a global Document Management and Communication
software business that provides highly secure forms of digital
document distribution, workflows and client chat. 1.6 million users
are now registered to share information through GetBusy's
award-winning online client portals.
Further information on the Group is available at
www.getbusy.com/about/investors
The Group has an international reach, rapidly growing existing
products, a proven business model, and strong momentum moving into
the future.
Chairman's Statement
The momentum built up during 2018 continued throughout 2019,
with the Group delivering 20% growth in recurring revenue and a 29%
improvement in Adjusted Loss before Tax. Allowing for significant
investments in product and customer acquisition, we've been
particularly pleased with the way in which SmartVault is scaling
and also the ability of Virtual Cabinet to generate significant
operating margins and cash. In addition, our eponymous product,
GetBusy, is entering the exciting product market fit phase and we
will be working hard over the coming year to prove a viable and
scalable model.
In December we announced the share capital reorganisation and
conditional placing, which was approved by shareholders and
implemented in January 2020. This was designed to simplify the
Company's share register, reduce the costs of compliance, provide
an attractive exit to our many small overseas shareholders, for
whom share trading costs can be very high, and provide additional
share liquidity in the market. We are pleased to welcome two new
institutional investors onto our share register as a result of this
transaction.
Readers will be aware of the devastating bushfires across
Australia over the last few months. This has been a particularly
difficult time for our team members in Sydney, many of whom reside
in the outskirts and have been living under the sustained threat of
evacuation. I am delighted at the response of our wider team to
support their colleagues down under, with a deluge of goodwill
messages and a substantial amount raised, and matched by the
Company, to support efforts to stem the ecological damage caused by
the fires. It is this compassion and sense of team that makes
GetBusy a very special place to work.
Following requests from a number of parties to increase the
level of independent oversight at board level, the Board decided
earlier in 2019 to begin the search for a new independent
non-executive director. Not wishing for the Board to be over-sized
and cost inefficient for a company of GetBusy's size, Greg
Wilkinson offered not to seek re-election as a Director at the next
AGM. Greg, who will remain a substantial shareholder and passionate
supporter of the business, founded Reckon Limited and has played a
key role in the creation of the document management group which
eventually demerged from Reckon to become GetBusy. I know I speak
on behalf of all the Board by saying that his no-nonsense,
pragmatic insight and good humour will be missed by all, and we
wish him well for the future; his selfless decision to step down is
a real testament to the man.
We warmly welcome Paul Huberman to the Board as an independent
non-executive director and we look forward to his contribution and
the benefit of his significant public company experience.
Finally, I would like to thank all our team for their hard work
in 2019. GetBusy's unique values are lived out every day by people
across the Group; these values, and each of our people, are the
source of our past success and the value that we create in the
future.
Business review
We are pleased to report Group recurring revenue growth of 20%
(19% at constant currency) to GBP11.4m, with total revenue up 17%
(15% at constant currency) to GBP12.7m. Growth came from both our
Virtual Cabinet and SmartVault businesses, with a particularly
strong year from the latter. Our subscription revenue growth has
come from a combination of new business (paid-for users increased
by 7% to 65,850) and improved monetisation of the existing customer
base (Group Annual Revenue Per User - ARPU - increased by 12% to
GBP186).
Annualised Recurring Revenue at 31 December 2019 was GBP12.2m,
up 19% at constant currency from a year ago. Recurring revenue grew
from 87% of total revenue in 2018 to 90% in 2019; in H2 it was 92%
of total.
There has been tremendous progress across each of our businesses
in 2019.
SmartVault's sales model has demonstrated excellent scalability,
with Annual Contracted Value (ACV) from new customers up 27% on
2018 and investments in product, customer acquisition and retention
that position us well for sustained strong growth. SmartVault was
successfully migrated to Amazon Web Services, substantially
improving the scalability, speed, stability and security of the
product. We signed our first channel and integration agreement in
the UK with TaxCalc and we have built out a dedicated customer
success function to focus on reducing churn.
Virtual Cabinet launched its suite of mobility apps,
collectively known as Virtual Cabinet Go, and introduced messaging
and multiple branding into its portal, which reaches over 600,000
registered users. We also had some first successes in selling
Virtual Cabinet into the US market, with some keystone clients
among reputable mid-tier accounting networks.
GetBusy matured significantly as a product and now has an
operational infrastructure around it as we attempt to prove the
market and move to monetisation. We acquired our first paying users
and we move into 2020 poised to learn rapidly in the product market
fit phase.
Adjusted Loss for the year was GBP(0.6)m, a reduction of GBP0.2m
compared to 2018. We continue to invest a significant proportion of
incremental revenue back into growth where we see favourable
leading indicators, such as in new customer acquisition for
SmartVault. We finished the year with GBP1.7m of cash, down from
GBP2.5m in 2018.
SmartVault
SmartVault is a cloud document management platform and portal
for small and medium sized businesses. SmartVault's customer base
comprises 62% from the accounting, bookkeeping and tax markets,
driven by very strong integrations with the leading SME cloud
accounting software providers.
Our financial objective for SmartVault is to drive sustained
growth in high quality recurring subscription revenue.
Revenue
Continued new customer growth and better monetisation of the
installed base led to a 30% (25% increase at constant currency)
increase in recurring revenue to GBP4.2m. Total ACV from new
customers was 27% ahead of 2018, a reflection of an increasingly
well-honed lead generation engine and outstanding sales execution.
42% of product demonstrations in 2019 successfully converted to new
customers.
During H2 we implemented a rationalisation of pricing plans for
existing customers. Over the 11 years of SmartVault's existence,
there has been a proliferation of plans. In many cases for older
customers, the value the product brings was significantly
undervalued in the price being charged, including when compared to
alternative offerings. In addition, the plan structures were
complex, creating an operational burden to maintain. The plan
rationalisation and simplification has contributed to a 22% ARPU
increase over 2019; ARPU was GBP232 / $302 per year at 31
December.
The number of paid users at the end of the period was 7.7%
higher than 31 December 2019, at 20,599. During H2 strong new user
growth was offset by a reduction of 400 users from within a
particularly large, old, non-accountant customer with a low ARPU
(68% lower than SmartVault's average), together with customers
subject to the pricing plan rationalisation removing dormant users
to reduce costs.
Net Monthly Recurring Revenue (MRR) churn for 2019 improved to
an average of 0.0% per month (2018: 0.5%), with the impact of the
plan rationalisation having a strong positive impact. Removing the
impact of the plan rationalisation leads to net MRR churn that is
comparable with 2018. Churn reduction is a key focus for 2020 and
beyond; during 2019 we created a customer success team to focus on
customer retention and monetisation and we are investing
significantly into product development to improve the user
experience.
Non-recurring revenue of GBP0.1m comprises sales of electronic
signatures through SmartVault's DocuSign integration, temporary
seasonal licences for the busy tax-preparation season and premium
onboarding and training services. The 62% increase compared to 2018
is a result of the first full year of the DocuSign arrangement,
together with a larger installed base to which seasonal licences
can be sold.
SmartVault's expansion into the UK is progressing well, with
in-country marketing, sales and consulting staff now in place. This
year has been about building brand presence and forging alliances
with industry bodies and potential channel partners. In November we
announced SmartVault's channel agreement with TaxCalc, a leading UK
supplier of practice management, client management and compliance
software to accountants and tax advisers with an installed base of
over 8,000 accountancy practices and over 30,000 individual
taxpayers across the UK. Under the agreement, TaxCalc has become a
non-exclusive reseller of our SmartVault product to current and
prospective TaxCalc customers in the UK and overseas. We are
jointly developing an integration between the two products and will
be co-marketing the integrated product suite.
SmartVault closed 2019 with ARR of GBP4.8m / $6.2m, which is 32%
ahead of December 2018 in constant currency.
Gross margin
As expected, gross margin of 82% was lower than in 2018 due to
higher integration fees and cloud hosting costs for the product.
Early in H1 we migrated the SmartVault product from self-managed
servers to Amazon Web Services ("AWS"), which provides a more
secure, faster and highly scalable platform for growth. The
migration was very successful, with no unplanned product downtime
during the key US tax season. Our priority has been to ensure the
product is stable and providing an excellent customer experience in
the new environment. In H2 we worked to optimise costs and now have
a sustainable balance of robustness and cost efficiency. The cash
costs of operating in AWS compared to the previous environment are
broadly neutral, however as a significant proportion of cost from
the old self-managed servers was depreciation (and therefore not
included in cost of sales), gross margin is likely to remain in
line with 2019 for the foreseeable future.
Overheads
Development costs of GBP0.9m were a little lower than 2018 owing
to lower levels of resource in the first half of the year. Key
areas of development during the year included the AWS migration,
the development of functionality and customisation for our entry
into the UK market, product enhancements to support the plan
rationalisation. Towards the end of the year we launched a
significant investment in product design and functionality, aimed
at improving the user experience and broadening the appeal of
SmartVault outside of our key accounting and tax vertical as well
as increasing our capacity to create new integrations with partner
apps, which can serve as channels. Additionally, we are examining
product initiatives aimed at monetising SmartVault's base of over 1
million portal users, who currently interact with the product for
no charge. Consequently, our development investment in 2020 will be
roughly 75% higher than 2019, with most of the investment in
additional people.
SG&A costs increased 36% to GBP3.6m due to the GBP1m of
investments we have been making over the last year in customer
acquisition teams, customer success teams and technology to
capitalise on strong LTV : CAC ratios in the US and to establish
our foothold in the UK. Commissions and employee incentive payments
have also been significantly above the levels of 2018 following a
record year.
Adjusted loss before tax was GBP(1.0)m, GBP0.3m higher than in
2018 due to the additional customer acquisition, customer success
and development investments to support sustained future growth.
Customer acquisition efficiency
Our LTV : CAC ratio for SmartVault as a whole was 3.8 : 1,
compared to 6:1 in 2018, primarily due to the expected drag caused
by the relative inefficiency of our less mature UK customer
acquisition spend and our previously announced accelerated
investment in US customer acquisition. Our LTV : CAC for SmartVault
in the US was 4.7 : 1 for the year as a whole, a figure which gives
us significant confidence in the scalability of our customer
acquisition model.
Looking ahead
During 2020 our focus will be on successful scaling and
sustained execution in the US market. While much of this growth
will come from within existing verticals and channels, we expect to
add to those channels and broaden our vertical market appeal
outside of the accounting and bookkeeping sector during the year.
Efforts to reduce churn will increase, with our dedicated customer
success team taking a leading role, backed by investments in the
product to improve the user experience. We aim to consolidate our
foothold in the UK, growing our customer base within the TaxCalc
channel, improving our UK product offering and brand recognition
and developing a more predictable, growing sales model. While we
expect our 2020 product development investments to have some
benefit in the year, particularly around churn reduction, we expect
much of the benefit in new customer acquisition to follow in
subsequent periods.
SmartVault is well placed to capitalise on a sizeable
opportunity to scale rapidly, with a committed, ambitious,
motivated and aligned management team in place. We are confident
that our additional investments will have a significant impact on
the long-term sustainable future for the business.
Virtual Cabinet
Virtual Cabinet is a leading desktop document management,
workflow and cloud portal tool targeted at a variety of medium to
large professional services businesses. 56% of Virtual Cabinet's
paying users are in the accounting, bookkeeping and tax industries,
with significant concentrations also in financial services,
insurance and insolvency.
Virtual Cabinet's financial objective is sustained growth in
profit and cash generation.
Revenue
Virtual Cabinet recurring revenue increased by 16% to GBP7.2m, a
reflection of continued new customer wins together with additional
revenue from the existing client base. The number of paid users
increased over the period by 7% to 45,251, ARPU increased by 6.7%%
to GBP165 and net monthly MRR churn was 0.1%, compared with 0.3%
for the year ended 31 December 2018. Annualised monthly recurring
revenue at 31 December was GBP7.5m, an increase of 14% compared to
31 December 2018.
Notable in 2019 has been the range of customer size for new
Virtual Cabinet customers, from single user firms to as high as 600
users, which demonstrates the flexibility of the Virtual Cabinet
product. The median customer size was 6 users. To support this
range of deal sizes we have developed a remote delivery,
installation and training model for the smallest and simplest
customer situations, which saves travel costs and valuable
consultant time.
During 2019 we have started to build Virtual Cabinet's presence
in the US accountancy sector, a market that is four times the size
of the UK and contains significantly more large-scale firms.
Virtual Cabinet's integrations with popular practice management
systems in the US present an attractive value proposition to the
larger end of the accounting market, complementing the coverage of
SmartVault in the small and medium accounting and bookkeeping
space. We will continue cautiously to explore opportunities for
geographic growth for Virtual Cabinet in the US.
Non-recurring revenue, which includes consulting and perpetual
licence sales, decreased 13% to GBP1.1m. This expected reduction is
partly a product of the transition of the revenue model from an
upfront, perpetual licence model to a higher value recurring
subscription model. In 2019, only 31% of our new customer orders
contained an upfront component, with the remainder on a pure
subscription basis. In addition, the comparative period contained
an unusually high volume of smaller one-off consulting projects
related to the GDPR implementation deadline in May 2018.
Total revenue of GBP8.3m was a 10% increase (11% at constant
currency) compared to 2018 with the proportion of recurring revenue
increasing from 83% to 86%, a trend we expect to continue. Gross
margin remained reasonably consistent at 98%.
Overheads
Development spend increased markedly compared to 2018 to GBP0.7m
(2018: GBP0.4m) as a result of a reallocation of resources in H2
2018 to assist with the SmartVault migration to AWS. The key focus
area of development in 2019 was our suite of mobility products,
collectively known as Virtual Cabinet Go; these products augment
the core Virtual Cabinet and portal applications, providing
intuitive, secure on-demand access to documents from anywhere and
without the time and hassle of negotiating local VPNs. This allows
our customers to spend more time out of the office and face-to-face
with their clients, without losing access to critical
information.
Additionally, we have significantly enhanced the capabilities of
the Virtual Cabinet Portal, including introducing a messaging
capability, the option for multiple branding for customers (for
example, an accountancy firm that has different brands for
corporate work and private client work) and a doubling of the
maximum document size.
SG&A costs decreased by 11% to GBP4.0m, primarily due to
lower staff costs, sales commissions and travel. We have reduced
the size of our sales and consulting team in Australia in order to
match delivery capacity with expected order intake in a relatively
saturated market for on-premise products. In addition, we have
redeployed certain operational staff to other areas of the business
as our efforts to use technology to automate internal processes
bear fruit. These savings have been offset to an extent by
redundancy costs in Australia.
Adjusted Profit increased by 42% to GBP3.4m with operating
margin improving significantly from 31% to 41%.
Looking ahead
In 2020, we expect continued growth in recurring revenue for
Virtual Cabinet, from a combination of new business and upsell to
existing customers. This growth may be at a more modest rate than
in 2019, which benefitted from two of Virtual Cabinet's largest
ever installations in the first half. Non-recurring revenue will
continue to decrease due to the impact of the shift in model to
pure subscription. Generating operational leverage through cost
control and the use of scalable technologies remains a priority for
the team and we would expect to see a further increase in operating
margin to the 42% - 45% range.
GetBusy
GetBusy is our new product designed for busy teams that want to
stay on task and get more done.
Our deep research around the way that teams work effectively has
identified a set of problem statements that GetBusy seeks to
address. These problems include challenges in keeping track of
tasks, communicating around tasks, clearly assigning tasks to team
members and clients, avoiding e-mail and chat-app clutter, having
multiple conflicting tools for team, client and personal
organisation, ineffective and inefficient communication and
information security and privacy.
GetBusy is a natural evolution of our existing products. We have
over 20 years' experience addressing the universal need for
businesses to work in a collaborative way and capture, organise,
process, action, discover & share information. We believe
GetBusy has the potential to open significantly larger addressable
markets for the Group as the problems it solves are generic rather
than specific to certain sectors.
The progress in functionality that the GetBusy product has made
over 2019 has been substantial. Multi-participant threads, teams,
SmartViews, personal tags, contact imports and integrations with
Google Drive, Dropbox and Instagram, have all been implemented
during the year, together with a major visual design refresh and
the launch of our Android app.
During 2019, in addition to the spend on developing the product,
we built the operational architecture around the product. This
included installing and configuring a billing system, payments
gateway and analytics tools to provide us with valuable insight
into users' behaviours. We have tested multiple value propositions
for the product via a variety of marketing channels, generated a
bank of content to help with onboarding and converting active users
into paid users and started to test pricing plans. We enter 2020
with a healthy funnel of leads generated by this marketing effort,
on which we will seek to capitalise in the coming months as we look
to prove commercial viability
During Q4 we began to see our first small cohort of paying
users, a significant milestone for the team. This has given us the
confidence to recruit our first dedicated customer success and
channel development team members in early 2020. This team is solely
focussed on acquiring paying users and identifying and developing
channel partners, with the ambition of demonstrating a scalable and
economically viable customer acquisition cost.
Total spend on GetBusy in 2019 was GBP1.4m, a GBP0.5m increase
compared to 2018. The increase reflects the operational
infrastructure that we have started to build around the product as
well as spend on test marketing and content generation as we
continue the journey to find product-market fit.
Items reconciling Adjusted Loss with Loss before Tax
On an IFRS basis, we have capitalised GBP0.3m of development
costs in 2019, which relates solely to work carried out on Virtual
Cabinet and SmartVault. Capitalised amounts in 2019 relate, amongst
other things, to the migration of SmartVault to AWS, the
development of the VC Go suite of mobility apps and the creation of
key integrations for SmartVault. No costs related to the
development of GetBusy have been capitalised as there is
insufficient certainty over the commercial viability of that
product at this stage.
During H1 in 2020 our UK team will move to new office premises.
The overlap of the new and old office premise leases has been
treated as an onerous contract, with GBP40k of accelerated
depreciation on the Right of Use - Leases asset for the old office
and GBP22k of related expenditure.
The increase in depreciation on owned assets and amortisation is
due to the impact of continued capitalisation of development
costs.
The increase in share option costs to GBP0.4m is largely due to
the increase in the provision for employment taxes due if options
are exercised, which is driven by the Company's share price.
The loss for the year was GBP1,205k, an increase of GBP95k
compared to 2018.
Tax
During 2019, the Group submitted claims for Research and
Development tax relief in respect of financial years 2017 and 2018.
The potential impact of these claims, which may lead to a material
cash inflow in 2020, has not been recognised in the 2019 tax
provision calculations in order to take a conservative stance
before approval by HMRC.
The tax charge of GBP25k in 2019 (2018: credit of GBP195k)
relates to our New Zealand company, which was profitable in the
year. Taxable profits in other profitable jurisdictions are fully
covered by brought-forward tax losses.
Balance sheet and cashflow
The most significant movement in non-current assets is the
creation of the GBP220k right of use lease asset under IFRS16. This
asset relates to the Group's leasehold offices in Cambridge,
Houston and Sydney. The associated lease liability of GBP312k has
been split between current and non-current.
The small increase in intangible assets is a result of the
capitalised development spend offset by amortisation.
Overall working capital is in line with 2018, although there are
some more significant movements within the constituent parts.
The reduction in trade and other receivables is partly due to
the lower trade receivables in Virtual Cabinet in the UK, which is
a result of the increasing proportion of customers who are on
monthly billing, as opposed to annual, as we move to a pure
subscription revenue model.
Trade and other payables increased GBP0.3m due to a combination
of higher team bonus provisions, particularly in SmartVault, a
GBP0.1m provision for an onerous lease for our existing UK offices
(the lease for which will overlap with our new office for 5 months)
and a higher rate of accrued spend in the final months of the year,
the payment for which will be made in 2020.
Deferred revenue fell by GBP0.4m, mostly driven by the shift to
monthly billing and pure subscription in Virtual Cabinet in the UK
and the recognition of deferred revenue related to non-recurring
revenue from licence and consulting deals in previous years.
Overall net liabilities at 31 December 2019 was GBP2.9m (up from
GBP2.0m at 31 December 2018). This net liabilities position is a
result of historic and current year losses combined with the
creation of the demerger reserve at the time of demerger in
2017.
Total cash outflow for the year was GBP743k, with closing cash
of GBP1.7m. The adjusted loss of GBP595k, a working capital outflow
of GBP180k and capital expenditure of GBP131k were offset slightly
by an exchange rate gain of GBP88k. The cashflow statement also
shows the impact of the adoption of IFRS16 Leases, with offsetting
entries for depreciation on right of use assets and the principal
payments and interest on lease liabilities.
Whilst cashflow broadly follows our adjusted profit / loss
figure, less any capital expenditure, there are a number of
material items that will or may have an impact on cashflow in
2020:
-- The subscription in January 2020 for 500,000 new ordinary
shares at a price of GBP0.525 per share;
-- Any receipt of successful research and development tax claims
for the financial years 2017 and 2018, which is expected be around
GBP0.6m, with a further claim for 2019 to follow; and
-- The fit-out costs for our new UK office and the extension of
our US office, which collectively may be between GBP0.2m and
GBP0.3m.
Outlook
We expect SmartVault's growth to continue to be strong,
underpinned by a very encouraging start to the new year and
investment in product development and customer acquisition that
will be at a higher run-rate than in 2019. Improvements in Virtual
Cabinet's operating margin will be driven by strong operating
leverage and more modest recurring revenue growth. We are not
forecasting any material revenue for the GetBusy product at such an
early stage, although we remain encouraged by the initial progress
thus far.
Consolidated income statement
For the year ended 31 December 2019
2019 2018
Note GBP'000 GBP'000
Revenue 3 12,661 10,865
Cost of sales (948) (537)
Gross profit 11,713 10,328
Operating costs (12,854) (11,528)
Net finance costs (39) (5)
Loss before tax 3 (1,180) (1,205)
Loss before tax (1,180) (1,205)
Capitalised development costs (331) (412)
Depreciation and amortisation on owned
assets 456 317
Share option costs 286 297
Social security costs on share options 113 -
Non-underlying costs 62 164
Finance (income) / costs not related
to leases (1) 5
Adjusted loss before tax (595) (834)
-------------------------------------------- ----- --------- ---------
Tax (25) 195
Loss for the period attributable to owners
of the Company (1,205) (1,010)
========= =========
Loss per share (pence)
Basic and diluted 4 (2.49)p (2.09)p
========= =========
Consolidated statement of comprehensive income
For the year ended 31 December 2019
2019 2018
GBP'000 GBP'000
Loss for the period (1,205) (1,010)
-------- --------
Other comprehensive income / (expense)
Items that may be reclassified subsequently
to profit or loss
Tax recognised in equity - -
Exchange differences on translation
of foreign operations 14 (41)
Other comprehensive income / (expense)
net of tax 14 (41)
-------- --------
Total comprehensive income for the period (1,191) (1,051)
======== ========
Consolidated balance sheet
At 31 December 2019
2019 2018
Note GBP'000 GBP'000
Non-current assets
Intangible assets 646 569
Right of use assets - leases 6 220 -
Property, plant and equipment 143 218
Deferred tax asset - -
1,009 787
--------- -----------
Current assets
Trade and other receivables 1,353 1,606
Current tax receivable - 74
Cash and bank balances 1,743 2,486
--------- -----------
3,096 4,166
--------- -----------
Total assets 4,105 4,953
--------- -----------
Current liabilities
Trade and other payables (2,265) (2,067)
Deferred revenue (4,233) (4,382)
Lease liabilities 6 (219) -
Current tax payable (30) -
(6,747) (6,449)
--------- -----------
Non-current liabilities
Deferred revenue (200) (449)
Deferred tax liabilities (6) (6)
Lease liabilities 6 (96) -
(302) (455)
--------- -----------
Total liabilities (7,049) (6,904)
--------- -----------
Net assets (2,944) (1,951)
========= ===========
Equity
Share capital 73 73
Share premium account 2,756 2,756
Demerger reserve (3,085) (3,085)
Retained earnings (2,688) (1,695)
--------- -----------
Equity attributable to shareholders
of the parent (2,944) (1,951)
========= ===========
Consolidated statement of changes in equity
For the year ended 31 December 2019
Share Share Demerger Retained Total
capital premium Reserve earnings
account
2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2019 as originally
stated 73 2,756 (3,085) (1,695) (1,951)
---------- --------- ---------- ----------- --------
Effect of first time adoption
of IFRS16 - - - (88) (88)
As restated 73 2,756 (3,085) (1,783) (2,039)
Loss for the period - - - (1,205) (1,205)
Exchange differences on translation
of foreign operations, net
of tax - - - 14 14
---------- --------- ---------- ----------- --------
Total comprehensive loss attributable
to equity holders of the parent - - - (1,191) (1,191)
Share option costs - - - 286 286
---------- --------- ---------- ----------- --------
- - - 286 286
At 31 December 2019 73 2,756 (3,085) (2,688) (2,944)
========== ========= ========== =========== ========
Share Share Demerger Retained Total
capital premium Reserve earnings
account
2018 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2018 73 2,756 (3,085) (941) (1,197)
---------- --------- ---------- ----------- --------
Loss for the period - - - (1,010) (1,010)
Exchange differences on translation
of foreign operations, net
of tax - - - (41) (41)
Total comprehensive loss attributable
to equity holders of the parent - - - (1,051) (1,051)
---------- --------- ---------- ----------- --------
Share option costs, net of
tax - - - 297 297
- - - 297 297
At 31 December 2018 73 2,756 (3,085) (1,695) (1,951)
========== ========= ========== =========== ========
Consolidated cash flow statement
For the year ended 31 December 2019
2019 2018
GBP'000 GBP'000
Adjusted loss before tax (595) (834)
Depreciation of right of use asset 296 -
- leases
Increase in receivables 268 140
(Decrease) / increase in payables (51) 120
(Decrease) / increase in deferred income (397) 469
Cash used in operations (479) (105)
Non-underlying costs - (34)
Income taxes received / (paid) 74 17
Interest received / (paid) 1 5
-------- --------
Net cash used in operating activities (404) (117)
-------- --------
Purchases of property, plant and equipment (63) (78)
Proceeds on disposal of property, plant
and equipment - 24
Purchases of intangible assets (68) (35)
-------- --------
Net cash used in investing activities (131) (89)
-------- --------
Principal portion of lease payments (256) -
Interest on lease liabilities (40) -
Proceeds on issue of shares - -
Net cash used in financing activities (296) -
-------- --------
Net decrease in cash (831) (206)
Cash and bank balances at beginning
of period 2,486 2,814
Effects of foreign exchange rates 88 (122)
-------- --------
Cash and bank balances at end of period 1,743 2,486
======== ========
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 Unit G, South Cambridge Business
Park, Cambridge, CB22 3JH. The Company is a holding company for a
group of companies ("Group") involved in the development and sale
of awesome software helping customers with electronic document
management and communication.
These financial statements are presented in pounds sterling
because that is the currency of the primary economic environment in
which the group operates.
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 EU adopted International Financial
Reporting Standards ("IFRS").
The financial statements of GetBusy plc for the year ended 31
December 2019 were authorised for issue by the Board of Directors
on 2 March 2020. 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.
Alternative performance measures
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 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 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.
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 considered in diluted
earnings per share. Therefore, excluding share option costs from
Adjusted Profit / 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. 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 Profit /
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. The cashflow
statement reconciles from Adjusted Profit / Loss before Tax, and so
there is no adjustment for development amortisation within
operating cashflows and no adjustment for development
capitalisation within cashflows from investing activities.
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.
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.
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.
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 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.
ARPU. Annualised MRR per paid user at a point in time.
3. Revenue and operating segments
The Group's operating segments comprise its three software
products (Virtual Cabinet, SmartVault and GetBusy) and a corporate
and central segment. Our Chief Executive Officer assesses Group
performance and determines the allocation of resources on that
basis.
2019 Document Management Communication
------------------------- -------------- ----------- ----------
Virtual SmartVault GetBusy Corporate Total
Cabinet GBP'000 GBP'000 & central GBP'000
GBP'000 GBP'000
Recurring revenue 7,187 4,201 - - 11,388
Non-recurring
revenue 1,138 135 - - 1,273
--------- -------------- -------------- ----------- ----------
Revenue from
contracts with
customers 8,325 4,336 - - 12,661
Cost of sales (178) (770) - - (948)
--------- -------------- -------------- ----------- ----------
Gross profit 8,147 3,566 - - 11,713
Sales, general
and admin costs (4,033) (3,640) (472) (1,618) (9,763)
Development
costs (742) (898) (905) - (2,545)
--------- -------------- -------------- ----------- ----------
Adjusted profit
/ (loss) before
tax 3,372 (972) (1,377) (1,618) (595)
Capitalisation
of development
costs 331
Depreciation
and amortisation
on owned assets (456)
Share option
costs (286)
Social security costs on share options (113)
Non-underlying
costs (62)
Other finance
income / (costs) 1
----------
Loss before
tax (1,180)
==========
2018 Document Management Communication
------------------------- -------------- ----------- ----------
Virtual SmartVault GetBusy Corporate Total
Cabinet GBP'000 GBP'000 & central GBP'000
GBP'000 GBP'000
Recurring revenue 6,242 3,226 - - 9,468
Non-recurring
revenue 1,314 83 - - 1,397
--------- -------------- -------------- ----------- ----------
Revenue from
contracts with
customers 7,556 3,309 - - 10,865
Cost of sales (205) (365) - - (570)
--------- -------------- -------------- ----------- ----------
Gross profit 7,351 2,944 - - 10,295
Sales, general
and admin costs (4,533) (2,673) (52) (1,519) (8,777)
Development
costs (443) (987) (922) - (2,352)
--------- -------------- -------------- ----------- ----------
Adjusted profit
/ (loss) before
tax 2,375 (716) (974) (1,519) (834)
Capitalisation
of development
costs 412
Depreciation
and amortisation
on owned assets (317)
Share option
costs (297)
Non-underlying
costs (164)
Other finance
income / (costs) (5)
----------
Loss before
tax (1,205)
==========
Recurring revenue is defined as revenue from subscription and
support contracts. Non-recurring revenue is defined as revenue from
software licences, consulting and licence upgrades. No customer
represented more than 10% of our revenue in either period.
Revenue by territory of operation is shown below
2019 UK USA Aus / NZ Total
GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 5,370 4,200 1,818 11,388
Non-recurring revenue 987 133 153 1,273
--------- --------- --------- ---------
Revenue from contracts
with customers 6,357 4,333 1,971 12,661
========= ========= ========= =========
2018 UK USA Aus / NZ Total
GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 4,644 3,226 1,598 9,468
Non-recurring revenue 1,154 83 160 1,397
--------- --------- --------- ---------
Revenue from contracts
with customers 5,798 3,309 1,758 10,865
========= ========= ========= =========
4. Loss per share
The calculation of loss per share is based on the loss for the
period of GBP1,210k (2018: GBP1,010k).
Weighted number of shares calculation 2019 2018
'000 '000
Weighted average number of ordinary shares
(basic and diluted) 48,400 53,834
-------- --------
Loss per share 2019 2018
pence pence
Basic and diluted (2.49) (2.09)
======= =======
As required by IAS33 (Earnings per Share), the impact of
potentially dilutive options has been disregarded for the purposes
of calculating diluted loss per share as the Group is currently
loss making. At 31 December 2019, there were 5,557,643 shares under
option (2018: 5,673,991) that would become dilutive if the Group
became profitable.
5. Reconciliation of Alternative Performance Measures - constant currency
A number of our key performance indicators are provided at
"constant currency". The percentage change in a KPI is shown
assuming the current year exchange rate is used to translate both
the current year and prior year figures. The table below reconciles
the constant currency figures to those reported.
Performance measure 2019 2018 as Constant 2018 at Change Change
originally currency constant at reported at constant
reported adjustment exchange exchange exchange
rates rates rates
--------------------- ----------- ------------ ------------ ----------- ------------ ------------
Group recurring
revenue GBP11,388k GBP9,468k GBP(108k) GBP9,576k 20% 19%
Group total revenue GBP12,661k GBP10,865k GBP(108k) GBP10,973k 17% 15%
SmartVault recurring
revenue GBP4,201k GBP3,226k GBP144k GBP3,370k 30% 25%
SmartVault total
revenue GBP4,336k GBP3,309k GBP147k GBP3,456k 31% 25%
Virtual Cabinet
recurring revenue GBP7,187k GBP6,242k GBP(36k) GBP6,206k 15% 16%
Virtual Cabinet
total revenue GBP8,325k GBP7,556k GBP(39)k GBP7,517k 10% 11%
Group Annualised
Recurring Revenue GBP12.3m GBP10.3m GBP(0.1)m GBP10.2m 20% 19%
--------------------- ----------- ------------ ------------ ----------- ------------ ------------
6. Leases
The Group adopted IFRS16 Leases with effect from 1 January
2019.
At the date of transition, a right of use asset of GBP545k was
recognised, together with a lease liability of GBP633k, leading to
a GBP88k reduction in net assets. At 31 December 2019, all of the
right of use assets relate to office property leases. The Group has
no other material leases or leases for low-value assets.
A reconciliation is provided below.
Right of Use Asset - Leases 2019
GBP'000
At 1 January (upon initial recognition) 545
Additions -
Depreciation (296)
Impairment (29)
---------
At 31 December 220
=========
The impairment charge of GBP29k relates to the Group's previous
office premises in the UK, and fully writes-down the right-of-use
asset as at 31 December 2019. The interest rate used to discount
lease liabilities is 8%.
Interest on lease liabilities of GBP40k was recorded in Net
Finance Costs during the year (2018: GBPnil).
The cash outflow for the Group's property leases was GBP382k
(2018: GBP375k).
The Group's lease liabilities mature as follows:
Maturity dates of lease liabilities 2019
GBP'000
Within one year 219
Within 1 to 5 years 96
More than 5 years -
---------
At 31 December 315
=========
On 17 January 2020, the Group completed a lease for new office
premises in the UK. The estimated asset of GBP661k and associated
liability has not been recognised at the balance sheet date.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FLFVTVIIFIII
(END) Dow Jones Newswires
March 03, 2020 02:00 ET (07:00 GMT)
Getbusy (LSE:GETB)
Historical Stock Chart
From Apr 2024 to May 2024
Getbusy (LSE:GETB)
Historical Stock Chart
From May 2023 to May 2024