TIDMGETB
RNS Number : 8115R
GetBusy PLC
05 March 2019
5 March 2019
GetBusy plc
2018 Full-year Audited Results
Sustained recurring revenue growth and strategic progress
GetBusy plc ("GetBusy", the "Company" or the "Group") (AIM:
GETB), a leading developer of document management and productivity
software products, announces its audited results for the year ended
31 December 2018.
2018 2017 Change
GBP'000 GBP'000 Reported currency Constant currency(+)
------------------
Recurring revenue 9,468 7,960 19% 22%
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Non-recurring revenue 1,397 1,334 n/a n/a
-------- -------- ------------------ ---------------------
Total revenue 10,865 9,294 17% 19%
-------- -------- ------------------ ---------------------
Adjusted EBITDA* before development costs 1,696 1,432 18% n/a
-------- -------- ------------------ ---------------------
Development costs (2,530) (2,641) n/a n/a
-------- -------- ------------------ ---------------------
Adjusted EBITDA* (834) (1,209) 31% n/a
-------- -------- ------------------ ---------------------
Cash 2,486 2,814 n/a n/a
-------- -------- ------------------ ---------------------
Loss before tax (1,205) (2,116) 43% n/a
-------- -------- ------------------ ---------------------
Financial highlights
-- Total revenue up 17% in reported currency and 19% at constant currency
-- Recurring revenue up 19% in reported currency and 22% at constant currency
-- Increase in proportion of recurring revenue to 87%, up from 86% in 2017
-- Significant increase in UK recurring revenue growth to 17%, up from 5% for 2017
-- Adjusted EBITDA improvement of 31% to GBP(834)k
-- Statutory loss before tax reduced by 43% to GBP(1,205)k
Operational highlights
-- GetBusy public beta and new website launched
-- SmartVault launched in UK
-- Material improvement in SmartVault LTV:CAC ratio to 6:1 (2017: 3:1)
-- Paying users up 4,100 to 61,543
-- Portal users exceeded 1.2 million
-- SmartVault successfully migrated to AWS environment
-- Started transition of UK business to a pure subscription model
Daniel Rabie, CEO of GetBusy, comments:
"2018 was a successful year of growth for GetBusy, with a 22%
constant currency increase in recurring revenue. Our strategy of
building a long term sustainable growth business based on high
quality recurring subscription revenues is delivering results, with
a strong performance in each territory from our two existing
products. We also passed important milestones in the development of
GetBusy, our communication and productivity app, with the launch of
the public beta and new website.
"In 2019 we will continue to invest in customer acquisition for
SmartVault and Virtual Cabinet to drive sustained growth from each
product. As the volume of beta users for GetBusy increases we will
continue to learn from the data we gather and iterate the product
and marketing strategy accordingly. 2019 looks set to be an
exciting year."
* Adjusted EBITDA is EBITDA before IPO and demerger costs, share
option costs, net capitalised development costs 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) +44(0) 845 166 1165
Paul Haworth (Chief Financial Officer) +44(0) 845 166 1165
Grant Thornton UK LLP (Nomad)
Philip Secrett / Jamie Barklem / Seamus Fricker +44 (0)20 7383 5100
Liberum Capital Limited (Broker)
Bidhi Bhoma / Cameron Duncan +44 (0)20 3100 2000
Walbrook PR (UK PR & IR adviser)
Paul Cornelius / Nick Rome / Sam Allen +44(0)20 7933 8780
getbusy@walbrookpr.com
About GetBusy
GetBusy is an established, successful, award-winning Document
Management software business, with operations in the UK, USA,
Australia and New Zealand, providing over 61,500 customers with a
highly secure form of digital document distribution with the
flexibility to suit any business or industry. It has found
particular success in the accountancy, legal and financial services
verticals. Over 1 million users are registered to share information
through GetBusy's online client portals.
The Group has three core product offerings:
-- Virtual Cabinet is Document Management software focused on
the medium size to enterprise size markets. It is used by 27 of the
100 largest accounting firms in the UK and 25 of the top 100
accounting firms in Australia and New Zealand;
-- SmartVault is an award-winning Document Management software
targeting the professional small and medium enterprise market, long
established in the USA and subsequently launched in the UK and
Australia;
-- GetBusy (in public beta) is a new client chat and
productivity product which we anticipate will help customers create
stronger relationships with less effort, help users become more
organised and productive, and reduce their administrative
burden.
The Group has an international reach, rapidly growing existing
products, a proven business model, and strong momentum moving into
the future.
Further information on the Group is available at
www.getbusy.com.
Chairman's Statement
It's been a pleasure to chair GetBusy during its first full year
on AIM.
In 2018, the Group has delivered an excellent set of results
that has seen a 19% increase in the size of recurring monthly
subscription revenues. We ended the year with a very strong cash
position of GBP2.5m. There has been progress across all elements of
our strategy. We've seen solid growth in each region and have been
able to invest based on clear data to deliver sustained growth
through 2019 and beyond. Our new product GetBusy has entered an
exciting phase and, while it's too early to forecast any revenues
from the product, the process we have in place to gather feedback
and iterate the product is cutting-edge.
As ever, I am grateful to all of our shareholders for their
continued support this year.
Along with many AIM companies, we saw significant changes to
disclosures concerning our governance framework during 2018
following the adoption of the Quoted Companies Alliance Corporate
Governance Code. As a Board, we are fully supportive of the Code
and are committed to maintaining the highest standards of
governance.
Looking forward, the Board assesses that the fundamental
challenges of document management, information chaos, privacy and
the need for efficient, secure communication will remain prevalent
across each of our markets. Legislative changes, including BREXIT,
GDPR and similar mandates across the globe, are important catalysts
for businesses to examine their operations and select best-in-class
technology-led solutions to simultaneously address compliance
obligations and improve efficiency. Our products provide that
solution.
I would like to thank the whole team for their efforts in 2018.
2019 looks set to be another year of growth in our existing
products and a year of rapid learning for GetBusy. We're looking
forward to it.
Hope to see you at the AGM.
CEO's review
I'm incredibly proud of what our rockstar team accomplished
during our first full year as an independent company in public
markets. Whilst achieving strong total revenue growth of 17% (19%
at constant currency), 2018 saw pleasing progress in key strategic
initiatives, laying a platform for continued future growth. Our UK
business has returned to healthy levels of growth having made
substantial progress in transitioning its business model to pure
subscription. We've brought SmartVault into the UK market,
addressing the SME market and those seeking a pure cloud solution.
And we have launched the new website and public beta of our new
product, GetBusy.
During 2018, the Virtual Cabinet business celebrated its 20th
anniversary and SmartVault turned 10. This wealth of knowledge and
experience has helped us to create class-leading products that add
significant value to our customers' businesses and we are applying
that expertise in the development of GetBusy.
UK
The UK had an outstanding year, with a return to strong growth.
Recurring revenue was up 17% to GBP4.6m and total revenue increased
14% to GBP5.8m. Recurring revenue now represents 80% of the UK
total (2017: 78%) and we expect to continue increasing that
proportion as more opportunities are converted on a pure
subscription basis.
Our marketing campaign preceding the GDPR deadline in May was
very well-executed, leading to heightened awareness of document
traceability and privacy. Our GDPR e-book even made GDPR fun. GDPR
led to an increase in one-off consulting projects for existing
customers, enabled us to upsell existing customers with additional
functionality, for example our document retention packs, and
generated substantial new business leads. Our order intake has
continued to be strong even after the passing of the GDPR deadline,
with businesses that initially focussed on compliance now looking
to optimise their systems to be both compliant and efficient.
Generating high quality subscription revenue remains our
priority. Subscription revenue is predictable, sustainable,
scalable and provides a solid platform for us to make investments
for growth. During 2018 we started to shift our UK business to a
pure subscription model from a legacy upfront perpetual licence and
support model. The cash investment that is required to transition
to this model is more than compensated for by the increased
customer lifetime value.
Our cloud-based SmartVault product was launched in the UK in
June 2018. This complements our Virtual Cabinet offering, providing
choice for customers with the two products solving similar problems
in different ways. SmartVault is particularly well-suited to
smaller customers who may not have the server infrastructure needed
to support Virtual Cabinet or who mandate a cloud-first solution.
We now have dedicated sales, support and delivery resource for
SmartVault in the UK and we will be expanding the sales and
marketing team in 2019. Whilst 2018 revenue from SmartVault in the
UK was not material, we have begun to build a recognisable brand
presence, we've formed alliances with national bookkeeping industry
bodies and we've identified the key additional product integrations
required to offer improved value to customers and accelerate
growth.
UK Adjusted EBITDA before corporate and development costs
increased 10% to GBP2.5m, despite significant investments in sales,
marketing and operational infrastructure improvements.
US
2018 was a pivotal year for our US operations. We made a
wholesale change to our entire sales team at the beginning of the
year, completed our digital signature integration with DocuSign,
strengthened our marketing effort with additional resource and
automation capability and made significant headway with migrating
the product to Amazon Web Services ("AWS").
Recurring revenue increased 23% at constant currency to GBP3.2m.
A strong year for new sales was augmented by a late 2017 price
increase for some customers and lower customer attrition than in
previous years. Our average Net MRR Churn in 2018 was 0.5% per
month, compared to 0.7% in 2017. Total revenue increased 20% at
constant currency to GBP3.3m.
During 2018, we saw a material improvement in the efficiency of
our sales and marketing operation. Our LTV : CAC ratio doubled from
3:1 in 2017 to an average of 6:1 in 2018. A number of factors
contributed to this, including better use of automation tools to
nurture our funnel of leads, an increasing library of informative
digital content to stimulate awareness of our product and
outstanding collaboration between our award-winning marketing team
and sales team. These improved metrics gave us the confidence to
increase our investment in sales and marketing during H2 and we
anticipate increasing investment further in 2019.
In May we announced the integration of DocuSign's e-signature
technology into our SmartVault product, having signed a global
non-exclusive partnership and reseller agreement. DocuSign's
technology is now embedded into SmartVault's Connected Desktop and
Portal, allowing customers to e-sign and archive automatically any
file stored in their SmartVault account. The integration was
completed after the end of the 2018 US "tax season", which is the
peak time for digital signature requirements, and therefore revenue
from the digital signatures in 2018 was not material. 2019 tax
season will be the first real test of the success of that
partnership.
Back in 2017, we migrated the Virtual Cabinet portal from
self-managed servers to AWS, a global cloud provider. This has
improved speed, reliability and security for customers, eliminated
the need for us to make ongoing and significant capital investments
to support the infrastructure and has ensured the product is
scalable. In H2 2018 we started to migrate our SmartVault product
to AWS. As well as bringing the user experience and cost benefits
from which we benefited with Virtual Cabinet, this will provide a
platform to more effectively develop and deploy product
enhancements in the future. This migration was successfully
completed during January 2019.
Following the increase in revenues and tight cost control, US
Adjusted EBITDA before corporate and development costs was GBP0.3m,
an improvement on the small loss in 2017.
Australia and New Zealand
Our Australia and New Zealand ("ANZ") business has delivered
revenue growth substantially higher than the group average in 2018,
from a much lower base, despite a challenging year operationally.
The combined business is now comfortably above cash breakeven.
Recurring revenue in 2018 was GBP1.6m, an increase of 35% at
constant currency. There were some significant changes to the sales
team in 2018 that impeded momentum during the year, resulting in
the slowdown in growth compared to 2017. We have reduced the cost
base in Australia accordingly and we maintain there remains
attractive growth potential in the region.
Progress with existing customers has been good. Our "land and
expand" model has proved successful, with pilots and trials of
Virtual Cabinet in one office or service line of a customer very
often leading to wins across other parts of the same firm.
During late H1 we started to test SmartVault in the ANZ market.
Based on the market response, we anticipate a launch towards the
end of 2019.
Pleasingly in 2018, the ANZ business reached cash breakeven,
reporting Adjusted EBITDA of GBP0.1m, despite having a full year of
establishment costs (such as premises and admin support) as
standalone entities following the spin-out from Reckon Limited in
August 2017.
Product development
Throughout 2018, we continued to make improvements to our
existing SmartVault and Virtual Cabinet products, to deliver
improved value to our customers and to maintain our competitive
edge.
Virtual Cabinet introduced sophisticated document retention
capabilities, allowing customers to implement GDPR-driven document
retention policies with ease, saving significant administrative
time and reducing compliance risks. We are also progressing well
with the development of our VC mobile app, which will bring a
feature-rich mobile experience for Virtual Cabinet users,
overcoming the significant technical complexities of securely and
seamlessly working with different customer VPNs. This allows users
to work successfully on the move without logging into laptops and
remote servers.
It has been a busy year for the SmartVault development team. A
major improvement in security was introduced with the roll-out of
multi-factor authentication. Our DocuSign integration provides a
seamless customer experience, further enhancing the time efficiency
benefits of using SmartVault as part of a suite of best-of-breed
apps. Finally, in H2 we started the complex migration to AWS, which
was completed in January 2019.
And throughout the year, we've been working on our new
baby...
GetBusy
In 2018, we broke cover.
Our new website and public beta went live in December. This
exciting development marks the start of our search for
product-market fit for GetBusy and allows us to significantly
increase the volume of beta users from whom we are obtaining
feedback to iterate the product.
Our approach to developing GetBusy is to constantly obtain
feedback from users. We examine the value propositions that
resonate most strongly before a user signs up to the app. We
monitor the way in which users travel through our onboarding
process and the reasons why they might drop-off. We look at usage
data - the number of new contacts created, messages sent, tasks
requested, documents transferred, how often a user logs back into
the app. We do this using industry-leading tools to obtain as much
data as possible about what's working and what's not working. And
we complement this with one-to-one video interviews with users.
And then we iterate the product. We want to make sure we're
building something that customers actually want and need, rather
than what we think they want and need. Updates to the product are
released at least every fortnight. Our development culture is one
of failing fast, learning fast, and then improving.
Over the course of 2019 we aim to learn more about what users
want out of the product, which features are offering the most
value, which features need work, what makes users stick and what
makes them leave. We will run marketing campaigns across a broad
spectrum of messages, value propositions and target markets to
acquire users. It's an inevitable part of the development journey
that many of these users will drop out of the product. We only see
that as failure if we don't learn something from each of those
users. We've created the right technology stack to make sure every
user, no matter how long or short their stay is with us,
contributes to our knowledge and understanding of what customers
want.
Team
We've strengthened our rockstar team across each business during
2018. Our focus has been on improving our customer acquisition team
in the US, adding to our development capabilities across the group
and bringing on board finance and analytical skillsets to help us
optimise each business. Our team is committed, highly capable and
customer-focussed. Our culture and values really means something to
each of our people and the success in 2018 is a real credit to
them. We're proud of the fact that 85% of our people told us they
would recommend working here to a friend.
Outlook
The UK and US are currently enduring significant political and
macro-economic uncertainty. Whilst this may present risks to the
customers of our customers, we believe that, on balance,
uncertainty is an opportunity for many of our professional services
clients to advise their clients on navigating that uncertainty.
Other than with the foreign currency translation of our overseas
earnings, we do not anticipate that uncertainty having a material
effect on our business.
During 2019 we will continue our focus on growing our base of
high quality recurring subscription revenue for SmartVault and
Virtual Cabinet in the UK, US and ANZ. This will include increased
investment in customer acquisition for SmartVault in the UK and US
and the continuation of our transition to a pure subscription model
for Virtual Cabinet in the UK. We will make investments in user
acquisition for GetBusy and as the volume of beta users increases,
we will continue to learn from the data we gather and iterate the
product and marketing strategy accordingly.
2019 promises to be an exciting year.
Financial review
Revenue
Total revenue for the Group rose 17% to GBP10.9m, an increase of
19% at constant currency. Both the US Dollar and Australian Dollar
were around 5% weaker on average in 2018 than 2017.
Recurring revenue, which comprises subscriptions and support
contracts, increased by 19% to GBP9.5m, with a strong performance
across each of our regions. Non-recurring revenue, which includes
revenue from upfront perpetual licences, consulting and hardware,
increased by 5%, reflecting our focus on increasing our proportion
of high quality recurring subscription revenues.
Geographically, the UK saw its share of Group recurring revenue
reduce from 51% to 49% (at constant currency), while ANZ increased
from 15% to 17%. The US maintained its share at 34%.
We saw progress in our drive to increase recurring revenue as a
proportion of our total revenue. The UK increased its share from
78% to 80% and the US increased from 96% to 98%. ANZ dropped back
slightly from 92% to 91%. As a Group, recurring revenue now
comprises 87% of the total, up from 86% in 2017.
We came into 2018 with Annualised MRR of GBP8.7m. The impact of
new business on 2018's recurring revenue was GBP0.9m and we
benefitted by GBP0.1m from price increases to the existing customer
base. Churn eroded our performance by around GBP0.2m, leading to
reported recurring revenue of GBP9.5m for the year.
Our Annualised MRR at 31 December 2018 was up 19% at constant
currency to GBP10.3m. If we stopped acquiring new customers, and
our existing customers remained with us on the same terms for the
next 12 months, this would be the recurring revenue recognised in
2019.
GBP4.0m of the total revenue recognised in 2018 arose from the
unwind of deferred revenue in the balance sheet at 31 December
2017. As we enter 2019, approximately GBP4.4m of the GBP4.8m
deferred revenue will unwind into revenue in the next 12
months.
Annual Revenue Per User ("ARPU") for SmartVault increased by 14%
to GBP193, with a number of factors contributing. ARPU for new
accounts was 50% higher than ARPU for the accounts that churned,
meaning that new customers tend to be worth more to us. We also saw
the full-year impact of a price rise that was typically around the
10% range and was implemented for some customers towards the end of
2017.
Virtual Cabinet's ARPU increased 9% to GBP156. The increase is
chiefly the result of the shift to a pure subscription model for
new customers.
Virtual Cabinet's ARPU is lower than that of SmartVault because
of the large base of installed users who are on legacy support
contracts, having paid for an upfront perpetual licence. As we
transition the business to a pure subscription model, we would
expect ARPU to increase because the proportion of legacy customers
will diminish.
Over time, as we shift the UK model to pure subscription, we
would expect to see a decline in non-recurring revenue although
ad-hoc consulting projects for existing customers, which might
include data migrations and server moves, are likely to
continue.
Gross margin
Gross margin increased slightly to 95% during 2018. Our cost of
sales includes the costs of operating our product infrastructure,
credit card payment fees and third party integration fees.
As we move SmartVault to AWS, we would expect a reduction in
gross margin in the medium term. The first priority is to ensure
the product is operating properly within the AWS environment and
that there is no detrimental impact on the customer experience.
Once it is operating to our satisfaction, we will start the process
of cost optimisation. That process will likely take the duration of
2019.
Operating costs
Total operating costs have increased by GBP1.3m (13%) in 2018.
GBP0.3m of the increase was due to a full year of corporate costs,
including the costs of being a public company, given that 2017 only
included 5 months of such costs. There was a GBP0.3m increase in
non-corporate staff costs, due to a combination of changes to the
make-up of our team and routine salary increases, a GBP0.4m
increase in sales incentives, due to the very successful year for
new business and a GBP0.1m increase in marketing costs across the
business.
Development costs of GBP2.5m (2017: GBP2.6m) on the face of the
income statement are stated before any adjustments for
capitalisation under IAS38 Intangible assets. This is to provide a
transparent view of the cash development spend before the
application of judgement in applying IAS 38. GBP1.6m was spent on
existing products (2017: GBP1.6m) while GBP0.9m was spent on
GetBusy (2017: GBP1.0m). The reduction in the overall cash spend
reflects team reorganisations that started in 2017 and have
continued in 2018, to better align our skillsets with the needs of
our development pipeline in order to continue investing heavily in
our products. This included transferring some of the SmartVault
development function from the US to the UK. 2017 also included c.
GBP0.2m of spend with a leading outside design agency to assist
with the user experience for GetBusy.
Adjusted EBITDA before development costs was GBP1.7m, an
increase of 18% compared to 2017. Adjusted EBITDA was GBP(0.8)m,
which was a 31% improvement on 2017.
Items reconciling Adjusted EBITDA to Operating Loss
On an IFRS basis, we have capitalised GBP0.4m of development
spend in 2018. This relates solely to work carried out on our
existing products. It includes the creation of document retention
packs and a mobile app for Virtual Cabinet and for SmartVault it
includes the introduction of multi-factor authentication
capability, to improve security, the integration with DocuSign and
the ongoing work to migrate to AWS. 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.
The increase in depreciation and amortisation is due to the
impact of continued capitalisation of development costs.
Share option costs have increased to GBP0.3m (2017: GBP0.1m).
The long-term incentive plan has only been in place since IPO in
August 2017, so that year contains only 5 months of costs. There
has also been an additional grant of options in 2018.
The 2017 demerger, flotation and other non-underlying costs
related solely to the demerger from Reckon and the related IPO. In
2018, costs of GBP0.2m include a GBP0.1m provision for an onerous
contract for data centre costs in the US following the decision to
migrate SmartVault from self-managed servers to AWS. GBP28k relates
to the costs of relocation for the Group's Chief Executive Officer
from Australia to the UK and related advice, a move which was
planned at the time of IPO.
Tax
The 2018 tax credit of GBP0.2m is largely the result of the
reversal of a deferred tax charge in previous years arising on
capitalised development costs. Overall the Group is currently
loss-making and, in those Group companies in which profits arise,
we have brought forward tax losses that offset them. We have taken
no credit for UK research and development tax benefits in 2018 or
2017; we are in the process of assessing what claims might be
available following the 2017 demerger.
Loss after tax
The loss after tax for the year was GBP1.0m, a reduction of
GBP1.3m compared to 2017, which contained GBP0.9m of costs related
to the demerger and IPO and a GBP0.4m higher tax charge. Basic and
diluted loss per share was 56% lower at 2.09p.
Balance sheet and cashflow
Movements in non-current assets are mainly due to the net
capitalised development costs in the period. Until we are
sufficiently satisfied with the commercial viability of GetBusy, we
would expect the level of capitalisation to continue broadly in
line with 2018's rate. Additions to tangible fixed assets over the
period largely relate to IT equipment replacements and
upgrades.
Within our current assets is GBP1.6m of trade and other
receivables, which is marginally higher than at 31 December 2017
although no meaningful movements within the constituent parts.
Overall trade debtor ageing has improved during 2018, with a
reduction in unprovided debts more than 60 days overdue from 37% of
the total to 7%. 85% of our trade debtors are in the UK business,
reflecting the legacy upfront model with many customers invoiced
annually.
The 11% increase in deferred revenue is due to a combination of
the higher overall revenue number, offset by the impact of a higher
proportion of new UK customers paying monthly subscriptions rather
than annual.
In late 2019 and early 2020, our UK business will be moving into
new premises. The business currently occupies three separate
buildings on a business park. The improved collaboration
opportunities afforded by everyone being under the same roof,
together with a modern, fun working environment, should be
significant benefit to that business. We will incur a degree of
fit-out costs for the new building starting in late 2019 and will
also have approximately 7 months of overlapping rent and associated
costs, depending on the date of completion of the new office.
Cashflow performance during 2018 has been very strong given the
operating loss. A large contributor to this has been the GBP0.4m
increase in deferred revenue. This is a product of higher sales
invoiced annually in advance and deposits received for significant
projects completing in early 2019, for which no revenue has yet
been recognised. Year-end accruals are also GBP0.4m higher than
2017 due to a combination of higher sales commissions that have not
yet been paid, the GBP0.1m onerous contract provision for
SmartVault's self-managed server architecture and other timing
differences.
Consolidated income statement
For the year ended 31 December 2018
2018 2017
Note GBP'000 GBP'000
Revenue 3 10,865 9,294
Cost of sales (537) (659)
Gross profit 10,328 8,635
Development costs (2,530) (2,641)
Sales, general and admin costs (8,632) (7,203)
Adjusted EBITDA 3 (834) (1,209)
Capitalised development costs 412 259
Depreciation and amortisation (317) (119)
Share option costs (297) (105)
Demerger, flotation and other non-underlying
costs (164) (911)
Operating loss (1,200) (2,085)
Net finance costs (5) (31)
Loss before tax (1,205) (2,116)
Tax 195 (183)
Loss for the period attributable to owners
of the Company (1,010) (2,299)
======== ========
Loss per share (pence)
Basic and diluted (2.09) (4.75)
======== ========
Consolidated statement of comprehensive income
For the year ended 31 December 2018
2018 2017
GBP'000 GBP'000
Loss for the period (1,010) (2,299)
-------- --------
Other comprehensive income / (expense)
Items that may be reclassified subsequently
to profit or loss
Tax recognised in equity - 4
Exchange differences on translation
of foreign operations (41) 92
Other comprehensive income / (expense)
net of tax (41) 96
-------- --------
Total comprehensive income for the period (1,051) (2,203)
======== ========
Consolidated balance sheet
At 31 December 2018
2018 2017
GBP'000 GBP'000
Non-current assets
Intangible assets 569 302
Property, plant and equipment 218 298
Deferred tax asset - -
787 600
-------- --------
Current assets
Trade and other receivables 1,606 1,554
Current tax receivable 74 95
Cash and bank balances 2,486 2,814
-------- --------
4,166 4,463
-------- --------
Total assets 4,953 5,063
-------- --------
Current liabilities
Trade and other payables (2,067) (1,694)
Deferred revenue (4,382) (3,952)
Current tax payable - -
(6,449) (5,646)
-------- --------
Non-current liabilities
Deferred revenue (449) (409)
Deferred tax liabilities (6) (205)
(455) (614)
-------- --------
Total liabilities (6,904) (6,260)
-------- --------
Net assets (1,951) (1,197)
======== ========
Equity
Share capital 73 73
Share premium account 2,756 2,756
Demerger reserve (3,085) (3,085)
Retained earnings (1,695) (941)
-------- --------
Equity attributable to shareholders
of the parent (1,951) (1,197)
======== ========
Consolidated statement of changes in equity
For the year ended 31 December 2018
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)
========== ========= ========== =========== ========
Share Share Demerger Retained Total
capital premium Reserve earnings
account
2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2017 57 - 882 (4,503) (3,564)
---------- --------- ---------- ----------- --------
Loss for the period - - - (2,299) (2,299)
Exchange differences on translation
of foreign operations, net
of tax - - - 92 92
Tax recognised in equity - - - 4 4
---------- --------- ---------- ----------- --------
Total comprehensive loss attributable
to equity holders of the parent - - - (2,203) (2,203)
---------- --------- ---------- ----------- --------
Proceeds from issue of shares 16 2,756 - - 2,772
Share option costs, net of
tax - - - 105 105
Funding from related party - - (3,967) 5,660 1,693
16 2,756 (3,967) 5,765 4,570
At 31 December 2017 73 2,756 (3,085) (941) (1,197)
========== ========= ========== =========== ========
Consolidated cash flow statement
For the year ended 31 December 2018
2018 2017
GBP'000 GBP'000
Adjusted EBITDA (834) (1,209)
Increase in receivables 140 (448)
Increase in payables 120 701
Increase in deferred income 469 329
Cash used in operations (105) (627)
Non-underlying costs (34) -
Income taxes received / (paid) 17 (21)
Interest received / (paid) 5 (30)
-------- --------
Net cash used in operating activities (117) (678)
-------- --------
Purchases of property, plant and equipment (78) (172)
Proceeds on disposal of property, plant 24 -
and equipment
Purchases of other intangible assets (35) -
-------- --------
Net cash used in investing activities (89) (172)
-------- --------
Net funding provided prior to demerger - 664
Proceeds on issue of shares - 3,000
Net cash used in financing activities - 3,664
-------- --------
Net (decrease) / increase in cash (206) 2,814
Cash and bank balances at beginning 2,814 -
of period
Effects of foreign exchange rates (122) -
-------- --------
Cash and bank balances at end of period 2,486 2,814
======== ========
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, communication and productivity.
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 2018 were authorised for issue by the Board of Directors
on 4 March 2019. 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 EBITDA. This is calculated as operating profit / loss
before certain items, which are listed below along with an
explanation as to why they are excluded:
Depreciation and amortisation. These non-cash charges to the
income statement are subject to significant judgement. Excluding
them from this measure removes the impact of that judgement and
provides a measure of profit that is more closely aligned with
operating cashflow.
Share option costs. Significant judgement is applied in
calculating the fair value of share options and subsequent charge
to the income statement, which has no cash impact. The impact of
potentially dilutive share options is also taken into account in
diluted earnings per share. Therefore, excluding share option costs
from Adjusted EBITDA removes the impact of that judgement and
provides a measure of profit that is more closely aligned with
cashflow.
Capitalised development costs. There is a very broad range of
approaches across companies in applying IAS38 Intangible assets in
their financial statements. There are also many examples of
companies being criticised for using the capitalisation and
amortisation of development costs as a method of manipulating
profit, due to the substantial management judgement involved in
applying the standard. To assist transparency, we exclude the
impact of capitalising development costs from Adjusted EBITDA in
order that shareholders can more easily determine the performance
of the business before the application of that significant
judgement. The impact of development cost capitalisation is
recorded after Adjusted EBITDA and before operating profit. The
cashflow statement reconciles from Adjusted EBITDA, 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 EBITDA
and recorded separately. In all cases, a full description of their
nature is provided.
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 interim financial
statements:
MRR. Monthly recurring revenue. That is, the monthly value of
subscription and support revenue, both of which are classified as
recurring revenue.
Annualised MRR. For a given month, the MRR multiplied by 12.
CAC. Customer acquisition cost. This is the average cost to
acquire a customer account, including the costs of marketing staff,
content, advertising and other campaign costs, sales staff and
commissions.
LTV. Life time value, calculated as the average revenue per
account multiplied by the average gross margin and divided by gross
MRR churn.
MRR churn. The average percentage of MRR lost in a month due to
customers leaving our platforms.
Net MRR churn. The average percentage of MRR lost or gained (if
negative) in a month due to the combined impact of customers
leaving our platforms, customers upgrading or downgrading their
accounts and price increases or reductions.
3. Revenue and operating segments
Our single operating segment is the development and sale of
document management software products across several countries. Our
Chief Executive Officer assesses Group performance on that
basis.
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
========= ========= ========= =========
Adjusted EBITDA before
development and corporate
costs 2,509 271 84 2,864
Development costs (2,530)
Corporate costs (1,168)
---------
Adjusted EBITDA (834)
=========
2017 UK USA Aus / NZ Total
GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 3,975 2,721 1,264 7,960
Non-recurring revenue 1,118 131 85 1,334
--------- --------- --------- ---------
Revenue from contracts
with customers 5,093 2,852 1,349 9,294
========= ========= ========= =========
Adjusted EBITDA before
development and corporate
costs 2,277 (36) 68 2,309
Development costs (2,641)
Corporate costs (877)
---------
Adjusted EBITDA (1,209)
=========
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.
4. Loss per share
The calculation of loss per share is based on the loss for the
period of GBP1,010k (2017: GBP2,299k). There is a material
departure from the requirements of IAS 33 in the calculation of
earnings per share ("EPS") for the year ended 31 December 2017 due
to the carve-out basis of preparation. To provide a meaningful
measure of performance, the directors have assumed that the number
of shares and the number of potentially dilutive shares have
remained constant throughout that period.
Weighted number of shares calculation 2018 2017
'000 '000
Weighted average number of ordinary shares 48,400 48,400
Effect of potentially dilutive share options
in issue 5,434 4,770
------- -------
Weighted average number of ordinary shares (diluted) 53,834 53,170
======= =======
Loss per share 2017 2016
pence pence
Basic and diluted (2.09) (4.75)
======= =======
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.
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 2018 2017 as Constant 2017 at Change Change
originally currency constant at reported at constant
reported adjustment exchange exchange exchange
rates rates rates
--------------------- ----------- ------------ ------------ ---------- ------------ ------------
Group recurring
revenue GBP9,468k GBP7,960k GBP(169)k GBP7,791k 19% 22%
Group total revenue GBP10,865k GBP9,294k GBP(134)k GBP9,160k 17% 19%
US recurring revenue GBP3,226k GBP2,721k GBP(92)k GBP2,629k 19% 23%
US total revenue GBP3,309k GBP2,852k GBP(102)k GBP2,750k 16% 20%
ANZ recurring
revenue GBP1,598k GBP1,264k GBP(76)k GBP1,188k 26% 35%
ANZ total revenue GBP1,758k GBP1,349k GBP(55)k GBP1,294k 30% 36%
Group Annualised
Recurring Revenue GBP10.3m GBP8.8m GBP(0.1)m GBP8.7m 17% 19%
--------------------- ----------- ------------ ------------ ---------- ------------ ------------
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 CKQDPKBKBQNK
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