TIDMGETB
RNS Number : 3412L
GetBusy PLC
05 September 2023
5 September 2023
GetBusy plc
2023 Half-year Results
Significant value creation continues
GetBusy plc ("GetBusy", the "Company" or the "Group") (AIM:
GETB), a leading provider of productivity software for professional
and financial services, announces its unaudited results for the six
months ended 30 June 2023 (the "Period", "H1" or "H1 2023").
H1 2023 H1 2022 Change
GBP'000 GBP'000 Reported currency Constant currency(***)
------------------
Group ARR 20,121 18,068 11% 14%
------------------ -----------------------
Group recurring revenue 10,102 8,519 19% 16%
-------- -------- ------------------ -----------------------
Group total revenue 10,521 9,070 16% 13%
-------- -------- ------------------ -----------------------
Group adjusted EBITDA* 164 24 583%
-------- -------- -------------------------------------------
Group adjusted loss before tax** (603) (724) 17%
-------- -------- -------------------------------------------
Group loss before tax (782) (879) 11%
-------- -------- -------------------------------------------
Cash 1,659 2,131 (22)%
-------- -------- -------------------------------------------
Financial highlights
-- Recurring revenue growth of 16% at constant currency to GBP10.1m (H1 2022: GBP8.5m)
-- Recurring revenue comprises 96% of total revenues (H1 2022: 94%)
-- ARR growth of 14% at constant currency to GBP20.1m (H1 2022:
GBP18.1m) and up 7% at constant currency since the start of the
year
-- Gross margin remains strong at 89.9% (H1 2022: 90.4%) with greater volume of cloud revenue
-- Adjusted EBITDA of GBP164k (H1 2022: GBP24k)
-- Cash of GBP1.7m (H1 2022: GBP2.1m) remains strong,
underpinned by undrawn committed GBP2.0m facility with total of
GBP3.7m available growth capital
Operational highlights
-- Strong net revenue retention of 100.5% per month (H1 2022:
100.6%), reflecting successful fair-price monetisation efforts and
lower gross churn
-- Group ARPU up 14% at constant currency to GBP275 (H1 2022: GBP245)
-- 0.7% reduction in paying users to 73,126 (H1 2022: 73,667),
reflecting strategy to focus on higher value customers
-- Launched major new integration for SmartVault with Thomson
Reuters' UltraTax application, opening promising new accounting
markets within US
-- Workiro now signed 20 partners in the ERP ecosystem
Outlook
-- Our core markets remain robust, driven by structural changes
in the way people work and a strengthening mandate for security and
productivity optimisation
-- The Group's underlying trading continues to be in line with
market expectations(****) , remaining modestly profitable at the
Adjusted EBITDA(*) level during H2 2023 as it continues to invest
in long-term growth, with strong cash inflows from H2-weighted
customer renewals
Daniel Rabie, CEO of GetBusy, comments:
"We have made significant progress during H1 2023 in setting up
the Group to capitalise on the expanding market opportunity ahead
of us, while delivering 16% constant currency growth in recurring
subscription revenue.
"We are investing for near-term growth through customer
acquisition and ensuring our long-term prospects are underpinned by
innovative products serving large markets with the compelling and
resilient growth drivers of productivity, cyber-security, mobility
and privacy.
"We look forward to bedding-in our investments over the course
of H2 with the expectation that they will deliver enhanced growth
into 2024 and beyond."
*Adjusted EBITDA is Adjusted Loss before Tax with capitalised
development costs added back. A full list of our alternative
performance measures, together with a glossary of certain terms,
can be found in note 2.
** Adjusted Loss before Tax is Loss before tax, depreciation and
amortisation on owned assets, long-term incentive costs, net
capitalised development costs, finance costs that are not related
to leases, and non-underlying items.
*** Changes at constant currency are calculated by retranslating
the comparative period at the current period's prevailing rate of
exchange.
**** Expectations for the year-ending 31 December 2023 are
considered to comprise Revenue of GBP21.1m and Adjusted EBITDA of
GBP0.7m.
A copy of the presentation to investors 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
Charlotte Sutcliffe / 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 70,000 paying users and over 3 million collaborators
across multiple market sectors and jurisdictions, GetBusy is an
established and fast-growing SaaS business delivering sustained
double-digit growth in high-quality recurring subscription revenue
over the long term.
Further information on the Group is available at
www.getbusyplc.com
Significant value creation
Our focus in 2023 is to structure the business to capitalise on
the substantial market opportunity for productivity software tools
in the accounting and ERP markets. In H1, alongside delivering a
16% constant currency increase in high quality recurring
subscription revenue, we have made encouraging progress in
enlarging the markets available to us, scaling our customer
acquisition engines, increasing average selling price and improving
churn.
In the US, a market that harbours an outstanding opportunity in
the accounting sector, we have re-engineered our entire sales and
marketing operational methodology, improving our ability to scale
customer acquisition significantly over the next few years. With a
new structure and process now in place, supported by major
improvements in data insight capabilities, we have started to make
substantial investments in headcount to drive new business, and we
expect the sales team alone to more than double in size over
2023.
Leading technology suppliers to US accountants have selected
SmartVault as their preferred document management application for
resale partnerships, for example Right Networks, the leading cloud
service provider that offers the only intelligent cloud
purpose-built for accounting firms and professionals. SmartVault is
now available for purchase by Right Networks' entire base of 8,500
accounting firms (about 20% more than SmartVault's entire customer
count) and we are working with Right Networks to optimise adoption
through the peak Q4 selling season. As well as its strength among
users of Intuit's Lacerte and ProSeries tax applications - with
which SmartVault has the leading document workflow integration -
Right Networks is growing among users of Thomson Reuters' UltraTax
product, for which SmartVault launched an integration in early July
that potentially doubles its medium-term market opportunity.
UltraTax's user base is comparable in size to Intuit's Lacerte
product but typically across larger firms, with higher average
selling price for SmartVault and lower churn rates. We expect to
pursue additional integration partnerships during H2 to further
broaden our accessible market and cement SmartVault's position as
the dominant specialist document workflow software for US
accountants.
SmartVault's form-filling and quoting capabilities, which were
acquired at the end of 2021, are now available to customers as
elective add-ons. Together with our e-signature integration, these
add-ons allow us to build more progressive pricing and packaging
structures to increase ARPU among our most engaged customers, and
we expect to launch those packages to customers in early 2024.
Our US business obtained the key ISO27001 information security
certification during H1 and is now pursuing the complementary
SOC2-1 accreditation. These benchmarks are often required for
larger enterprise customers in which there is a greater IT
sophistication, as we have seen with our ISO27001 certification in
the UK, so we expect this effort to enable SmartVault to become
more successful among larger clients, such as those on the UltraTax
platform. Additionally, these enhanced security credentials are
essential for the asset finance providers served by our
CertifiedVault product; we expect to allocate a very modest level
of capital for customer acquisition in the asset finance market
over the balance of 2023 while we complete the certification
processes.
Virtual Cabinet largely completed the transition of its customer
base to the "all-in" Unlimited pricing plan during the first
quarter; encouragingly, we have seen no adverse impact on churn
rates, which validates the value ascribed to the product by our
customers and confirms its position as a leading product in the
space. Virtual Cabinet Cloud, powered by the Group's Workiro
technology, now provides a richly capable cloud transition path for
customers, making Virtual Cabinet a compelling choice for
professional services firms with a wide variety of cloud and
on-premise core business applications.
Workiro has continued to make progress with its enterprise
content management ("ECM") offering for the ERP market. Over H1 we
more than doubled the number of partners within the NetSuite
ecosystem and sales pipelines are beginning to build. With the
feedback we have received from partners, customers and NetSuite
themselves, we are confident that Workiro's ECM capabilities, both
existing and those in the near-term roadmap, provide significant
value to large enterprises with complex document workflow
requirements and we are very excited about how Workiro is now
positioned in this attractive market. Whilst enterprise customers
tend to have longer sales cycles than those in the SME segment, in
which SmartVault operates, ultimately we expect deal sizes that are
an order of magnitude larger than has historically been the case in
the Group, together with lower churn rates. Over H2 we will
continue to invest in the enterprise capabilities of the product
and refine our go-to-market approach based on our interactions with
customers, partners and enterprise prospects.
Investing to capitalise on the long-term growth opportunity
Despite the current economic backdrop, the Group is committed to
sustained investment, from self-generated cash resources, in the
pursuit of both medium- and long-term growth.
We believe there is a substantial long-term growth opportunity
for software that supports the productivity of knowledge workers,
enhances their working day by improving workflows, and contributes
to the profitability of the organisations that employ them. This
opportunity is supported by enduring structural drivers such as
stricter regulatory requirements, a more hostile cybersecurity
landscape, tightening labour markets and increasing workforce
flexibility demands.
By remaining focused on specific, valuable markets, in
particular the accounting market, we can build a high quality,
sticky customer base for whom our products have infrastructural
characteristics. We believe our base of customers can become
strategically very attractive as a result of the access we have to
a very well-defined set of customers with similar software
requirements.
Whilst medium-term growth is expected to be driven largely by
the accounting market, in which we are experienced and proven,
growth over the longer-term is expected to be significantly
enhanced by the opening of larger enterprise markets and the
provision of ECM solutions via Workiro. As in accounting, we expect
success to come through the depth of our integrations with other
mission-critical software platforms, such as ERP. The scale of the
Workiro opportunity warrants the sustained investments we are
making with the expectation that the solution will open
substantially larger markets over the longer term.
Why accounting?
Through SmartVault and Virtual Cabinet, GetBusy is the largest
specialist provider of document management and workflow software
into the accounting sector in our chosen markets of the US, UK and
ANZ.
Our commitment to the accounting market is based on a number of
compelling factors that collectively evidence a substantial
opportunity on which we are very well placed to capitalise.
The US accounting sector alone employs 1.2 million people,
including over 650,000 Certified Public Accountants within over
130,000 firms. Cloud technology adoption across the sector,
particularly in the tax preparation market, is relatively early
stage. The market is dominated by a handful of large tax software
providers whose clients overwhelmingly use legacy on-premise
software due to its familiarity and rich functionality. The
transition of the sector to the cloud has been gradual but is
accelerating.
Specialist productivity tools are increasingly a priority for
small accounting firms. Declining numbers are entering the
profession in the US; the Bureau of Labor Statistics is projecting
an annual shortfall of some 50,000 newly qualified accountants over
the next decade. This labour shortage is a catalyst for two trends
that are favourable for our solutions. Firstly, firms are focusing
on optimising practitioner efficiency by implementing simple,
no-code workflow automations like those enabled through SmartVault
and its integrations into the major tax software applications.
Secondly, firms are making increasing use of outsourcing, including
through offshore providers, to plug the labour gap, making a
cloud-first technology stack essential for secure and efficient
collaboration.
Technology adoption is also being driven by the rising
participation of private equity in the accounting sector. This is
leading to a consolidation of accounting firms across the size
spectrum and a concerted drive for mandated technology adoption, as
the "lifestyle" model of partnerships gives way to the growth- and
efficiency-focused mindset of professional management installed by
private equity. All firms will need to follow to remain
competitive. Cloud technologies that optimise the productivity of
expensive and scarce knowledge-workers are clear beneficiaries of
this shift.
These accounting-specific trends are in addition to the broader
drivers of the productivity and security software market for
professional services firms:
-- Strengthening data privacy regulation and more robust
enforcement means accounting firms are expected by their clients to
adopt technologies that safeguard sensitive data.
-- A more hostile cybersecurity environment has driven data
security to the top of the agenda at even the smallest of firms.
Accounting firms have become a focus for cyber attacks due to the
exceptionally sensitive data held; the relatively unsophisticated
IT practices that persist in a proportion of the sector makes those
firms particularly vulnerable.
-- Hybrid working and the increasing mobility of the workforce
are prevalent in the accounting sector, in which a competitive
labour market forces firms to adopt employee-friendly work policies
to make them more attractive to scarce talent. This trend drives
the adoption of cloud technologies that enable remote employees to
work securely and efficiently.
Competition in the space, particularly in the automation of
document workflows, remains relatively benign. Generic document
management providers - though sometimes substantially larger than
GetBusy - lack the depth of integration with accounting and tax
preparation software that specialist providers can offer and that
are critical to workflow optimisation. The document capabilities
embedded within many of the accounting practice management software
suites are usually ageing, limited in functionality and starved of
investment. Specialist providers, like SmartVault and Virtual
Cabinet, are few as the barriers to entry, both technically and in
brand recognition, are high.
All of these factors reinforce our commitment to building a
highly valuable business focused on the accounting sector.
Custodians of rich content for AI
Artificial intelligence ("AI") technology within GetBusy's
products has the potential to bring significant value to our
customers, enabling them to leverage deep insights from the highly
valuable content secured within our applications, substantially
enhancing their productivity.
Our product roadmaps include radically re-engineered intelligent
content "search and answer" capabilities, client sentiment
analytics and smart suggestions for the creation and prioritisation
of tasks.
Keeping our customers' content secure is the foundation of our
business and so we have created a set of strict development
principles that prioritise the privacy and security of customer
content to ensure our customers always retain full control around
the application of AI to their content.
Financial review
Group H1 2023 H1 2022 Change
Reported Constant
currency currency
---------- ----------
ARR at 30 June GBP20.1m GBP18.1m 11% 14%
----------- ---------- ---------- ----------
Recurring revenue GBP10,102k GBP8,519k 19% 16%
----------- ---------- ---------- ----------
Total revenue GBP10,521k GBP9,070k 16% 13%
----------- ---------- ---------- ----------
Adjusted EBITDA GBP164k GBP24k 583%
----------- ---------- ----------------------
Adjusted loss before
tax GBP(603)k GBP(724)k 17%
----------- ---------- ----------------------
Paying users at 30
June 73,126 73,667 (1)%
----------- ---------- ----------------------
ARPU at 30 June GBP275 GBP245 12% 14%
----------- ---------- ---------- ----------
Net revenue retention 100.5% 100.6% n/a
----------- ---------- ----------------------
Recurring revenue was up 16% at constant currency (19% at
reported currency) to GBP10.1m (H1 2022: GBP8.5m), with good
contributions from across the Group aided by strong opening ARR
positions. The UK was up 23% to GBP3.9m (H1 2022: GBP3.2m), buoyed
by the migration of a large proportion of our clients to the
Virtual Cabinet Unlimited "all-in" pricing plan in the second half
of 2022. The US was up 14% at constant currency (20% at reported
currency) to GBP5.2m (H1 2022: GBP4.3m), with a combination of new
business and improved churn.
ARR, which is our recurring revenue runrate, grew by 7% at
constant currency over the six months to 30 June 2023 to GBP20.1m,
which is up 14% at constant currency compared to 30 June 2022. ARR
growth over H1 was driven largely by higher ARPU, up 10% at
constant currency since 1 January 2023 to GBP275, and a 3%
reduction in users as we continue our strategy of focusing on
higher-value accounting and professional services customers with
strong integrations. Non-professional services customers have a
disproportionate impact on user numbers (particularly in SmartVault
in which non-accountant plans typically have higher minimum user
counts) but bring a fraction of the lifetime value to the Group of
an accounting or professional services customer. Accounting
per-user pricing is typically double that of non-accounting and
accountants are less than a third as likely to churn as
non-accountants. Net revenue retention remained strong in the
period due to improving churn rates across the Group (0.8% per
month, compared to 0.9% in H1 2022) coupled with the final set of
UK customers moving to the Virtual Cabinet Unlimited pricing plan,
averaging 100.5% per month (H1 2022: 100.6%). We expect net revenue
retention to return to more normalised levels over H2.
Non-recurring revenue of GBP0.4m was, as expected, down a little
compared to H1 2022 following the effective completion of the
process to convert older Virtual Cabinet customers onto pure SaaS
models. Total revenue was up 16% (13% at constant currency) to
GBP10.5m (H1 2022: GBP9.1m).
Gross margin of 89.9% (H1 2022: 90.4%) reflects the greater
proportion of revenue from our cloud products, most notably
SmartVault, as opposed to on-premise products for which there is
very little ongoing cost of sale.
SG&A costs of GBP7.7m (H1 2022: GBP6.8m) largely reflect the
investments made in the customer acquisition teams in the US, for
SmartVault, and the UK, for Workiro.
Total development expenditure was up 11% to GBP2.4m (H1 2022:
GBP2.1m), driven principally by a small headcount increase. GBP0.8m
of development costs were capitalised (H1 2022: GBP0.7m) across
Workiro and SmartVault.
Adjusted EBITDA was GBP0.2m (H1 2022: GBPnil), whilst Adjusted
Loss, which is stated before development capitalisation, was
GBP(0.6)m (H1 2022: GBP(0.7)m).
Depreciation and amortisation was down fractionally at GBP0.4m
(H1 2022: GBP0.5m) following 2022's change to the useful economic
life of capitalised development costs to 5 years (previously 3
years).
Long-term incentive costs of GBP0.3m were a little higher (H1
2022: GBP0.2m), reflecting new long-term incentive schemes
implemented in the period, offset by a reduction in the share-based
payment charge.
Non-underlying costs of GBP0.2m (H1 2022: GBP0.1m) comprise
corporate restructuring costs linked to the creation of separate
intermediate holding company structures and trading companies for
each of the Group's businesses and management support functions,
together with costs associated with the settlement of historic US
sales tax liabilities.
Non-lease finance costs relate to the Group's new GBP2m
revolving credit facility, which remained undrawn over the
period.
The loss before tax was GBP0.8m (H1 2022: GBP0.9m). The tax
credit of GBP0.1m (H1 2022: credit of GBP0.3m) reflects a
conservative estimate of the expected UK research and development
tax credit offset by overseas tax payable in the US, Australia and
New Zealand. The reduction is a result of the ongoing changes being
made to the calculation of tax credits for UK SMEs, the first of
which came into effect from 1 April 2023.
Cashflow and working capital
In addition to the GBP0.6m adjusted loss, the GBP1.3m cash
outflow comprised:
-- A deferred revenue reduction of GBP0.6m, largely reflecting
the seasonality of annual subscription renewals (which are
H2-weighted) and the timing of billing;
-- A GBP0.3m increase in payables, including employee incentive accruals;
-- GBP0.3m of capital expenditure, including in subcontracted software development work;
-- GBP0.1m of non-underlying restructuring cash costs;
-- A GBP0.6m net tax inflow, comprising GBP1.0m in research and
development tax credits in the UK offset by foreign tax
payments.
Cash at 30 June 2023 was GBP1.7m (30 June 2022: GBP2.1m),
underpinned by a GBP2m undrawn revolving credit facility committed
until February 2027, which remained undrawn over the period.
Consolidated income statement
For the six months ended 30 June 2023
H1 2023 H1 2022 FY 2022
Note GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Revenue 3 10,521 9,070 19,293
Cost of sales (1,058) (873) (1,952)
Gross profit 9,463 8,197 17,341
Operating costs (10,176) (9,010) (17,754)
Net finance costs (69) (67) (130)
Loss before tax 3 (782) (880) (543)
Loss before tax (782) (880) (543)
Depreciation and amortisation
on owned assets 408 487 563
Long-term incentive costs 262 157 329
Social security on long-term
incentives 61 130 (120)
Non-underlying costs 173 99 389
Finance costs not related
to leases 42 31 74
----------- ----------------- -----------------
Adjusted EBITDA 164 24 692
Capitalised development costs (767) (748) (1,438)
----------- ----------------- -----------------
Adjusted loss before tax (603) (724) (746)
--------------------------------- ----- ----------- ----------------- -----------------
Tax 140 332 571
(Loss)/profit for the period
attributable to owners of
the Company (642) (548) 28
=========== ================= =================
(Loss)/profit per share (pence)
Basic 4 (1.28) (1.10) 0.06
=========== ================= =================
Diluted 4 (1.28) (1.10) 0.05
=========== ================= =================
Consolidated statement of comprehensive income
For the six months ended 30 June 2023
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
(Loss)/profit for the period (642) (548) 28
----------- ----------- ----------
Other comprehensive items that
may be subsequently reclassified
to profit or loss
Exchange differences on translation
of foreign operations net of tax 168 (335) (380)
Other comprehensive income net
of tax 168 (335) (380)
----------- ----------- ----------
Total comprehensive income for
the period (474) (883) (352)
=========== =========== ==========
Consolidated balance sheet
At 30 June 2023
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Non-current assets
Intangible assets 3,144 1,591 2,486
Right of use assets - leases 995 1,463 1,184
Property, plant and equipment 345 426 382
-----------
4,484 3,480 4,052
----------- ----------- --------------
Current assets
Trade and other receivables 2,001 1,939 2,104
Current tax receivable 426 451 1,064
Cash and bank balances 1,659 2,131 2,972
----------- ----------- --------------
4,086 4,521 6,140
----------- ----------- --------------
Total assets 8,570 8,001 10,192
----------- ----------- --------------
Current liabilities
Trade and other payables (4,264) (3,865) (4,473)
Deferred revenue (6,021) (5,701) (6,659)
Lease liabilities (373) (373) (371)
Current tax payable (361) (280) (536)
----------- --------------
(11,019) (10,219) (12,039)
----------- ----------- --------------
Non-current liabilities
Lease liabilities (904) (1,465) (1,131)
----------- ----------- --------------
(904) (1,465) (1,131)
----------- ----------- --------------
Total liabilities (11,923) (11,684) (13,170)
----------- ----------- --------------
Net assets (3,353) (3,683) (2,978)
=========== =========== ==============
Equity
Share capital 76 74 75
Share premium account 3,018 3,018 3,018
Demerger reserve (3,085) (3,085) (3,085)
Retained earnings (3,362) (3,690) (2,986)
----------- ----------- --------------
Equity attributable to shareholders
of the parent (3,353) (3,683) (2,978)
=========== =========== ==============
Consolidated statement of changes in equity
For the six months ended 30 June 2023
Share
Share premium Demerger Retained
capital account reserve earnings Total
2023 Unaudited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2023 75 3,018 (3,085) (2,986) (2,978)
---------- --------- ----------- ----------- --------
Loss for the period - - - (642) (642)
Exchange differences on intercompany
balances shown in reserves - - - 168 168
Total comprehensive income
for the period - - - (474) (474)
Issue of ordinary shares 1 - - - 1
Long-term incentive costs - - - 98 98
---------- --------- ----------- ----------- --------
Total transactions with owners
of the Company 1 - - 98 99
At 30 June 2023 76 3,018 (3,085) (3,362) (3,353)
========== ========= =========== =========== ========
Share
Share premium Demerger Retained
capital account Reserve earnings Total
2022 Unaudited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2022 74 3,018 (3,085) (2,963) (2,956)
---------- --------- ----------- ----------- --------
Loss for the period - - - (548) (548)
Exchange differences on translation
of foreign operations, net
of tax - - - (335) (335)
Total comprehensive income
for the period - - - (883) (883)
Long-term incentive costs - - - 156 156
---------- --------- ----------- ----------- --------
Total transactions with owners
of the Company - - - 156 156
At 30 June 2022 74 3,018 (3,085) (3,690) (3,683)
========== ========= =========== =========== ========
Share
Share premium Demerger Retained
capital account Reserve earnings Total
2022 Audited 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 - - - 329 330
At 31 December 2022 75 3,018 (3,085) (2,986) (2,978)
========== ========= =========== =========== ========
Consolidated cash flow statement
For the six months ended 30 June 2022
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
(Loss)/profit for the period (642) (548) 28
Finance costs 42 31 130
Income tax credit (140) (332) (571)
Depreciation of - property, plant
and equipment 82 87 163
Depreciation on right of use asset
- leases 179 194 277
Amortisation on intangible assets 326 400 400
Long-term incentive costs 323 287 329
Decrease/(increase) in receivables 103 (31) (197)
(Decrease)/increase in payables (235) (288) 428
(Decrease)/increase in deferred
income (639) 228 1,187
Cash used in operations (601) 28 2,174
Net income taxes received 628 790 675
Interest paid (42) (25) (74)
----------- ----------- ---------
Net cash from operating activities (15) 793 2,775
----------- ----------- ---------
Purchases of property, plant and
equipment (45) (76) (118)
Purchases of other intangible assets (217) (143) (339)
Capitalised internal development
costs (767) (748) (1,438)
----------- ----------- ---------
Net cash used in investing activities (1,029) (967) (1,895)
----------- ----------- ---------
Principal portion of lease payments (179) (130) (306)
Interest on lease liabilities (27) (36) (56)
Proceeds on issue of shares 1 - 1
----------- ----------- ---------
Net cash from financing activities (205) (166) (361)
----------- ----------- ---------
Net increase/(decrease) in cash (1,249) (340) 519
Cash and bank balances at beginning
of period 2,972 2,670 2,670
Effects of foreign exchange rates (64) (199) (217)
----------- ----------- ---------
Cash and bank balances at end
of period 1,659 2,131 2,972
=========== =========== =========
Net cash reconciliation
At 1 January Cash Interest Foreign At 30
2023 flow accretion exchange June 2023
movement
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Finance lease
liability (1,502) 206 (27) 46 (1,277)
Cash and cash
equivalents 2,972 (1,251) - (62) 1,659
------------- -------- ----------- ---------- -----------
Net cash (including
lease liabilities) 1,470 (1,045) (27) (17) 381
============= ======== =========== ========== ===========
Notes to the financial information
1. General information
These interim financial statements are for the six months ended
30 June 2023. They do not require all the information required for
full annual financial statements and should be read in conjunction
with the consolidated financial statements of the Group for the
year ended 31 December 2022.
These financial statements are presented in pounds sterling
because that is the currency of the country in which the Group has
its stock market listing and where most of its investors
reside.
2. Basis of preparation and accounting policies
The financial information set out above does not constitute
statutory accounts within the meaning of section s434(3) of the
Companies Act 2006 or contain sufficient information to comply with
the disclosure requirements of UK-adopted International Accounting
Standards ("IFRS").
The financial statements of GetBusy plc for the year ended 31
December 2022 were authorised for issue by the Board of Directors
on 28 February 2023. The auditors have reported on these accounts
and their reports were unqualified, did not draw attention to any
matters by way of emphasis and did not contain any statements under
s498 (2) or (3) of the Companies Act 2006.
These interim financial statements are prepared on the same
basis as the financial statements for the year ended 31 December
2022, in which our full set of accounting policies, including
critical judgements and key sources of estimation uncertainty, can
be found.
Alternative performance measures and glossary of terms
The Group uses a series of non-IFRS alternative performance
measures ("APMs") in its narrative and financial reporting. These
measures are used because we believe they provide additional
insight into the performance of the Group and are complementary to
our IFRS performance measures. This belief is supported by the
discussions that we have on a regular basis with a wide variety of
stakeholders, including shareholders, staff and advisers.
The APMs used by the Group, their definition and the reasons for
using them, are provided below:
Recurring revenue . This includes revenue from software
subscriptions and support contracts. A key part of our strategy is
to grow our high-quality recurring revenue base. Reporting
recurring revenue allows shareholders to assess our progress in
executing our strategy.
Adjusted Profit / Loss before Tax . This is calculated as profit
/ loss before tax and before certain items, which are listed below
along with an explanation as to why they are excluded:
Depreciation and amortisation of owned assets. These non-cash
charges to the income statement are subject to judgement. Excluding
them from this measure removes the impact of that judgement and
provides a measure of profit that is more closely aligned with
operating cashflow. Only depreciation on owned assets is excluded;
depreciation on leased assets remains a component of adjusted
profit / loss because, combined with interest expense on lease
liabilities, it is a proxy for the cash cost of the leases.
Long-term incentive costs. Judgement is applied in calculating
the fair value of long-term incentives, including share options,
and the subsequent charge to the income statement, which may differ
significantly to the cash impact in quantum and timing. The impact
of potentially dilutive share options is also considered in diluted
earnings per share. Therefore, excluding long-term incentive costs
from Adjusted Loss before Tax removes the impact of that judgement
and provides a measure of profit that is more closely aligned with
cashflow.
Capitalised development costs . There is a very broad range of
approaches across companies in applying IAS38 Intangible assets in
their financial statements. For transparency, we exclude the impact
of capitalising development costs from Adjusted Loss before Tax in
order that shareholders can more easily determine the performance
of the business before the application of that significant
judgement. The impact of development cost capitalisation is
recorded within operating costs.
Non -underlying costs. Occasionally, we incur costs that are not
representative of the underlying performance of the business. In
such instances, those costs may be excluded from Adjusted Profit /
Loss before Tax and recorded separately. In all cases, a full
description of their nature is provided.
Finance costs / (income) not related to leases . These are
finance costs and income such as interest on bank balances. It
excludes the interest expense on lease liabilities under IFRS16
because, combined with depreciation on leased assets, it is a proxy
for the cash cost of the leases.
Adjusted EBITDA . This is calculated as Adjusted Profit / Loss
before Tax with capitalised development costs added back.
Constant currency measures . As a Group that operates in
different territories, we also measure our revenue performance
before the impact of changes in exchange rates. This is achieved by
re-stating the comparative figure at the exchange rate used in the
current period.
Glossary of terms
The following terms are used within these financial
statements:
MRR. Monthly recurring revenue. That is, the monthly value of
subscription and support revenue, both of which are classified as
recurring revenue.
ARR . Annualised MRR. For a given month, the MRR multiplied by
12.
CAC . Customer acquisition cost. This is the average cost to
acquire a customer account, including the costs of marketing staff,
content, advertising and other campaign costs, sales staff and
commissions.
LTV. Lifetime value, calculated as the average revenue per
account multiplied by the average gross margin and divided by gross
MRR churn.
MRR churn . The average percentage of MRR lost in a month due to
customers leaving our platforms.
Net revenue retention . The average percentage retained after a
month due to the combined impact of customers leaving our
platforms, customers upgrading or downgrading their accounts and
price increases or reductions.
ARPU . Annualised MRR per paid user at a point in time.
3. Revenue and operating segments
The Group's chief operating decision maker is considered to be
the Board of Directors. Performance of the business and the
deployment of capital is monitored on a group basis. Additional
revenue analysis is presented by territory.
H1 2023 Unaudited UK USA AUS/NZ Total
GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 3,941 5,179 982 10,102
Non-recurring
revenue 155 251 13 419
--------- --------- --------- ---------
Revenue from
contracts with
customers 4,096 5,430 995 10,521
Cost of sales (1,058)
---------
Gross profit 9,463
Sales, general
and admin costs (7,701)
Development
costs (2,365)
---------
Adjusted loss
before tax (603)
Capitalisation of development
costs 767
---------
Adjusted EBITDA 164
Depreciation and amortisation on
owned assets (408)
Long-term incentive
costs (262)
Social security on long-term incentives (61)
Non-underlying
costs (173)
Other finance
income / (costs) (42)
---------
Loss before
tax (782)
=========
H1 2022 Unaudited UK USA AUS/NZ Total
GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 3,207 4,330 982 8,519
Non-recurring
revenue 275 233 43 551
--------- --------- --------- ---------
Revenue from
contracts with
customers 3,482 4,563 1,025 9,070
Cost of sales (873)
---------
Gross profit 8,197
Sales, general
and admin costs (6,792)
Development
costs (2,129)
---------
Adjusted loss
before tax (724)
Capitalisation of development
costs 748
---------
Adjusted EBITDA 24
Depreciation and amortisation on
owned assets (487)
Long-term incentive
costs (157
Social security on long-term incentive
costs (130)
Non-underlying
costs (99)
Other finance
income / (costs) (31)
---------
Loss before
tax (880)
=========
2022 Audited UK 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 costs on share options 120
Non-underlying
costs (389)
Other finance
income / (costs) (74)
---------
Loss before
tax (543)
=========
4. Loss per share
The calculation of loss per share is based on the loss for the
period of GBP642k (H1 2022: loss of GBP548k, 2022: profit of
GBP28k).
Weighted number of shares calculation H1 2023 H1 2022 FY 2022
'000 '000 '000
Unaudited Unaudited Audited
Weighted average number of ordinary
shares 50,175 49,580 49,621
Effect of potentially dilutive
share options in issue n/a n/a 7,341
----------- ----------- ---------
Weighted average number of ordinary
shares (diluted) 50,175 49,580 56,962
=========== =========== =========
Loss per share H1 2023 H1 2022 FY 2022
pence pence pence
Unaudited Unaudited Audited
Basic (1.28) (1.10) 0.06
=========== =========== =========
Diluted (1.28) (1.10) 0.05
=========== =========== =========
At 30 June 2023 there were 7,058,705 shares under option. As
required by IAS33 (Earnings per Share), the impact of potentially
dilutive options was disregarded for the purposes of calculating
diluted loss per share in the Period as the Group was loss
making.
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