TIDMGETB
RNS Number : 8648L
GetBusy PLC
05 May 2020
5 May 2020
GetBusy plc
("GetBusy" or the "Company" or the "Group")
AGM Trading Update
GetBusy plc (AIM: GETB), a leading developer of document
management and productivity software products, provides an update
on trading in advance of this morning's AGM.
Year-to-date trading
The new financial year has started well, with double digit
revenue growth and a small Adjusted Profit* being generated in the
first four months of the year (the "Period"). On a constant
currency basis, recurring revenue and total revenue grew by 20% and
15% respectively in the Period. Recurring revenue represented 90%
of the Group's total revenue in the Period.
-- For SmartVault, recurring revenue growth of 32% has been
driven by a 36% increase in the value of new business, reflecting
both strong market demand for cloud productivity products and
improved sales and marketing execution. In March, we also launched
our new VirtualVault product in limited private beta, aimed at the
monetisation of SmartVault's one million portal users by providing
them with a personal secure digital vault for health, financial and
asset-related documentation.
-- For Virtual Cabinet, recurring revenue growth of 13% reflects
the benefit of strong growth in 2019 and further improvements in
revenue per user. Total revenue growth, as expected, was lower at
6% due to the reduction in non-recurring revenue as we continue the
deliberate transition to a pure subscription revenue model.
-- For GetBusy, marketing, channel development, sales and
customer success teams are now in place for the GetBusy application
and there has been encouraging progress with new and prospective
customers. While revenue remains immaterial to the Group as a
whole, paying user numbers have increased over 30% since early
March and we continue to iterate and test the value
proposition.
COVID-19 update
The health and wellbeing of our staff remains our highest
priority, and we are pleased that the team continues to be healthy.
Operationally, the transition to remote working has gone smoothly,
with our wide use of cloud-based tools being a key enabler.
The immediate impact on our customers has been mixed.
Accountants and bookkeepers, which comprise about 60% of our
revenue base, have a diversity of clients and so their financial
health will be reliant on the constituents of their specific client
base. We have no material direct exposure to the retail, leisure or
transport industries. That said, there is an increased risk of
customers churning or reducing licensed user numbers as they cut
staffing levels, albeit we have yet to see significant examples of
this. We have, however, seen some clear stretching of payment terms
by customers in the UK, and some customers have asked to switch
from our annual subscription plans to monthly-paid plans as their
own cashflow has been challenged since the global lockdowns.
Importantly, no single customer accounts for more than 1% of our
recurring revenue, which helps mitigate risk.
The landscape for new business has been more complex. Trade
shows have been cancelled or postponed throughout the first half of
the year, which impacts lead generation particularly in the UK. We
are diverting some of the spend previously earmarked for trade
shows to online lead generation.
For SmartVault, demand from new customers has remained solid,
albeit with monthly variations. The extension of US tax filing
deadlines by 3 months from April until July may alter some of the
usual seasonal buying behaviour for the US accounting market,
although it is too early to determine the precise impact.
For Virtual Cabinet, conversion of new customer leads, which
often require an on-site installation, has slowed considerably
since early March and as a result we have furloughed a small number
of customer-facing staff who are unable currently to access client
sites. However, we have seen reasonable levels of upsell to the
existing customer base; for example, increasing the number of
portal or mobile app licenses as more staff move to remote
working.
Working capital position
Notwithstanding the Group's strong start to the year, the Board
has modelled a number of downside scenarios on revenue to ensure
that there is sufficient working capital within the business going
forward. The scenarios modelled include known additional cash
receipts such as c. GBP0.7m of UK research and development tax
credits, c. GBP0.4m from the US Paycheck Protection Program
forgivable loan scheme, together with the benefit of payroll tax
reductions under the Boosting Cashflow for Employers program in
Australia and the support for furloughed staff under the
Coronavirus Job Retention Scheme in the UK. These receipts have
been modelled together with forecast capital expenditures,
overheads and a broad range of stretching of trade receivables from
customers. As a result of this comprehensive scenario planning, the
Board is confident that the Group's balance sheet is sufficiently
resilient to withstand the current crisis.
Outlook
The changes to people's working lives over the last couple of
months accelerate trends towards fully digitised, paperless work
practices that our document management products enable. The surge
in remote working requires a new software toolset for many
organisations and each of our products is a component of that
toolset.
In the medium to longer term, therefore, we expect this
situation to be a catalyst for significant growth in the market and
we aim to capitalise on this growth. We remain confident that
revenue and Adjusted Loss* for 2020 will be in line with market
expectations of GBP13.8m and GBP(0.6)m respectively.
* 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.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Enquiries
GetBusy plc
Daniel Rabie (Chief Executive Officer) investors@getbusy.com
Paul Haworth (Chief Financial Officer)
Liberum (Nomad and Broker)
Bidhi Bhoma / Cameron Duncan / Louis
Davies +44 (0)20 3100 2000
About GetBusy
GetBusy is a global Document Management and Productivity
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
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
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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