TIDMGETB
RNS Number : 9264Q
GetBusy PLC
03 March 2021
3 March 2021
GetBusy plc
2020 Full-year Audited Results
Strong revenue growth with robust foundations to scale
GetBusy plc ("GetBusy", the "Company" or the "Group") (AIM:
GETB), a leading developer of document management and task
management software , announces its audited results for the year
ended 31 December 2020.
2020 2019 Change
GBP'000 GBP'000 Reported currency Constant currency(+)
------------------
Group total revenue 14,179 12,661 12% 12%
------------------ ---------------------
Group recurring revenue 13,017 11,388 14% 15%
-------- -------- ------------------ ---------------------
Group adjusted loss before tax* (927) (595) (56)%
-------- -------- -----------------------------------------
Group loss before tax (1,126) (1,180) 5%
-------- -------- -----------------------------------------
Net cash 2,283 1,743 31%
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Virtual Cabinet revenue 8,473 8,325 2% 2%
-------- -------- ------------------ ---------------------
Virtual Cabinet adjusted profit before tax* 3,891 3,372 15%
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SmartVault revenue 5,700 4,336 31% 32%
-------- -------- ------------------ ---------------------
SmartVault adjusted loss before tax* (1,373) (972) (41)%
-------- -------- -----------------------------------------
Financial highlights
-- Group recurring revenue up 14% in reported currency and 15% at constant currency
-- Recurring revenue comprises 92% of total revenues, up from 90% in 2019
-- SmartVault recurring revenue up 30% at constant currency
driven by strong annual revenue per user ("ARPU") and user growth,
and Virtual Cabinet up 6% driven by ARPU
-- Gross margin remained strong at 92.8% (2019: 92.5%)
-- Statutory profit after tax of GBP398k (2019: loss of GBP1.2m)
aided by research and development tax refunds of GBP1.5m
-- Net cash well ahead of market expectations, up GBP0.5m to
GBP2.3m with better than expected R&D tax receipts
-- Undrawn 3-year GBP2.0m loan facility signed with Silicon
Valley Bank to support growth investment
Operational highlights
-- Group ARPU up 10% at constant currency to GBP203
-- 2% paying user growth to 67,343 following prioritisation of
higher value users in SmartVault and churning some lower ARPU
customers in Virtual Cabinet
-- SmartVault growth investment programme started in H2 2020
leading to a very strong final quarter in 2020
-- 182 paying users for GetBusy at 31 December (2019: nil)
-- GetBusy integration partnership with NetSuite, the leading
cloud business software provider, launched in January 2021
Daniel Rabie, CEO of GetBusy, commented:
"Our mission to make people productive and happy has resonated
more in 2020 than ever before.
"As clients and prospects around the world made the transition
to remote working, our deep-rooted expertise and our class-leading
software enabled them to do so efficiently and securely. The rapid
changes to people's working lives accelerate trends towards fully
digitised, paperless work practices that our document management
and task management products enable. The surge in remote working,
and the likely transition to a hybrid office-home working mix,
requires a new software toolset for many organisations and each of
our products is a component of that toolset.
" Despite the challenges of the pandemic and its economic
consequences, we have delivered 15% growth in our high-quality
recurring subscription revenues at constant currency. Our workforce
grew by 24% in 2020 and we closed the year with 31% more cash,
while embarking upon an ambitious programme of investment to
support sustained growth in our document management business well
into the future.
"In 2021, we expect to continue to capitalise on the trends that
have been favourable to us during 2020.
"We are very clearly in the scaling phase of our document
management business comprising SmartVault and Virtual Cabinet, and
we are able to see a path to a substantial business with high
quality, predictable and valuable earnings in the medium to long
term.
"Whilst yet to be proven, we believe that our GetBusy product
has the potential to open significantly greater addressable markets
for our business. The problems it solves are universal, not
sector-specific, and solutions to those problems have become even
more valuable as businesses adopt hybrid working models on a
permanent basis.
"Our Group contains a combination of a proven, highly
cash-generative market-leader, a rapidly and predictably scaling
pure SaaS business in a large and valuable market, and a new
product that solves increasingly relevant problems and that has the
potential to open a significantly greater market.
"This unique combination gives us confidence looking to the
future."
* 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/investors
GetBusy plc
Daniel Rabie (Chief Executive Officer) investors@getbusy.com
Paul Haworth (Chief Financial Officer)
Liberum Capital Limited (Nomad and Broker)
Cameron Duncan / Lauren Kettle +44 (0)20 3100 2000
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014. THE
PERSON RESPONSIBLE FOR MAKING THIS ANNOUNCEMENT ON BEHALF OF THE
COMPANY IS PAUL HAWORTH.
About GetBusy
GetBusy's document management and task management software
enables over 67,000 professional paying users around the world to
digitise their operations and be productive while working in the
office or remotely.
Further information on the Group is available at
www.getbusy.com/investors
Chairman's Statement
It has been a privilege to chair GetBusy during what has been a
momentous year globally.
I am enormously grateful to our 136 staff who have worked
tirelessly, in often very challenging personal circumstances, to
remain, and to help our customers remain, productive and happy. In
line with our company values, they have shown grit and made things
happen. Each of them has contributed to GetBusy's success over this
extraordinary period and to each of them I say "thank you".
Fully digital operations for professional services firms used to
be driven by a productivity mandate. Over just a few months,
digitisation and the software that enables it has become a critical
part of a firm's infrastructure that equips it, at its most basic
level, simply to exist. Cloud-based and mobility-enabling products
aren't just the future; they have become an essential element of
the fabric of business everywhere and are poised for rapid and
sustained growth. GetBusy has the right products in the right place
at the right time.
We are pleased with the Group's growth in 2020. The 15% constant
currency increase in recurring revenue continues our trajectory
towards significant scale, with SmartVault in particular proving
the resilience and attractiveness of cloud software products.
As we invest for future growth, we can do so from a robust
platform: a business with 91% recurring revenue, low customer
concentration, low churn, resilient end markets, 31% more cash than
a year ago and a revolving credit facility to provide additional
headroom and firepower for growth.
Group business review
2020 2019 Change
Reported Constant
currency currency
---------- ----------
Recurring revenue GBP13,017k GBP11,388k 14% 15%
----------- ----------- ---------- ----------
Total revenue GBP14,179k GBP12,661k 12% 12%
----------- ----------- ---------- ----------
Adjusted Profit / (Loss) GBP(927)k GBP(595)k (56)%
----------- ----------- ----------------------
ARR at 31 December GBP13,680k GBP12,256k 12% 12%
----------- ----------- ---------- ----------
Paying users at 31
December 67,343 65,850 2%
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ARPU at 31 December GBP203 GBP186 9% 10%
----------- ----------- ---------- ----------
During the economic and social turbulence of 2020, we have
benefitted from our resilient subscription revenue model, our low
levels of customer concentration and products that enable people to
work flexibly and productively.
Group recurring revenue grew by 15% at constant currency to
GBP13.0m, with total revenue up 12% (12% at constant currency) to
GBP14.2m. Growth was primarily driven by SmartVault, which had an
excellent year for new customer growth. Virtual Cabinet also saw
some excellent customer wins, particularly in the insolvency
sector, and another two top 100 UK accounting firms were brought on
board. ARR increased by 12% at constant currency to GBP13.7m due to
a combination of higher user numbers and 10% higher ARPU.
The deep recessions caused by COVID-19 in our main geographical
markets have inevitably led to many businesses reducing their
workforces. In that context, we are pleased with the relatively
small increase in net MRR churn that we have seen in our
businesses.
As expected, non-recurring revenue decreased by 9% to GBP1.1m
following the repositioning of Virtual Cabinet as a subscription
software business, as opposed to the upfront licence and consulting
model of 3 years ago. 89% of Virtual Cabinet revenue is now
recurring.
Gross margin of 92.6% was in line with 2019. The impact of a
higher proportion of revenue from SmartVault, which operates at
lower gross margins than Virtual Cabinet, was offset by
improvements in those margins following cost optimisation within
the Amazon Web Services environment in which SmartVault
operates.
Throughout 2020 we have increased investment in areas that we
expect to deliver significant and long-term return. SmartVault has
accounted for most of this investment, with a significant
improvement in our product development capabilities, continued
increases in customer acquisition teams and a substantial
restructuring of our customer success function. In addition, we
have had the first full year of operational costs for GetBusy as we
transition from a product in development to a business finding
product-market fit. Overall overheads have increased by 14% to
GBP14.1m, leading to an increase in our Adjusted Loss before Tax of
GBP0.3m to GBP(0.9)m.
Cashflow has been a particular highlight in 2020. Receipts from
UK research and development tax credits, the US Paycheck Protection
Program and a new equity issue in January 2020 have more than
offset the operating loss and capital expenditure on our new office
fit-outs resulting in a year-on-year cash increase of 31%. The
completion of a 3-year, as-yet undrawn, GBP2million revolving
credit facility with Silicon Valley Bank provides us with
considerable confidence and cash headroom as we invest in future
growth.
SmartVault
SmartVault is a cloud document management platform and portal
for small and medium sized businesses. Our financial objective for
SmartVault is to drive sustained growth in high quality recurring
subscription revenue.
SmartVault 2020 2019 Change
Reported Constant
currency currency
---------- ----------
Recurring revenue GBP5,433k GBP4,201k 29% 30%
------------ ---------- ---------- ----------
Total revenue GBP5,700k GBP4,336k 31% 32%
------------ ---------- ---------- ----------
Adjusted Profit / (Loss) GBP(1,373)k GBP(972)k (41)%
------------ ---------- ----------------------
ARR at 31 December GBP5,835k GBP4,779k 22% 27%
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Paying users at 31
December 23,530 20,599 14% n/a
------------ ---------- ---------- ----------
ARPU at 31 December GBP248 GBP232 7% 11%
------------ ---------- ---------- ----------
Net MRR Churn 0.8% 0.0% n/a
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Recurring revenue was up 30% at constant currency.
Significantly, annual contract value from new customers was up 50%
compared to 2019 at GBP1.7m, of which 90% was in the US and 10% in
the UK. Whilst volume of new accounts was the biggest contributor
to this increase, we also saw a 9% increase in the average account
size following initiatives to broaden the appeal of SmartVault to
larger firms. 2020 has been the first year in which the UK has
contributed meaningfully to new revenue in SmartVault, with solid
business from our partnership with TaxCalc, a leading UK supplier
of practice management, client management and compliance software
to accountants and tax advisers.
Net MRR churn of 0.8% was notably higher than 2019, which
included a significant plan rationalisation and price increase.
This increase in net churn has been caused by softer expansion
activity and a higher volume of downgrades, potentially caused by
customers reducing costs during the pandemic.
Encouragingly, gross churn (from customers who have closed their
accounts) declined in 2020 and especially during H2. The average
gross MRR churn during H2 2019 was 1.5% per month; during H2 2020
it was 1.1% per month, demonstrating that more customers regard
SmartVault as a core component of their technology and workflow
stack. This reflects the investments that we have started to make
into the product as well as the restructuring of the customer
success function.
Recurring revenue increased by 29% (30% at constant currency) to
GBP5.4m with closing ARR up 22% (27% at constant currency) to
GBP5.8m. Non-recurring revenue, which includes services and sales
of seasonal licences and e-signatures, was up 97% to GBP0.3m, a
reflection of the larger user base and targeted efforts by the
newly created customer success team.
Gross margin improved by 3% to 85.3%. This follows the migration
of SmartVault to the Amazon Web Services environment in early 2019
and the subsequent cost optimisation work undertaken.
Throughout 2020 we have increased our investments to support
growth in SmartVault. The primary driver of this investment case is
the compelling LTV : CAC ratio, which provides a measure of the
return expected from incremental customer acquisition spend. This
ratio has averaged 4:1 globally over 2020, similar to that seen in
2019; encouragingly during H2 we have seen the ratio improve,
especially within the US. Our investments go beyond short-term
customer acquisition, but the consistency and robustness of this
ratio provides us with confidence in the scalability of the
SmartVault business.
Product development costs nearly doubled to GBP1.7m as we built
out the in-house team to increase the velocity of new feature
introduction. We also partnered with a design house to create a
refreshed user interface, which will be implemented over the course
of 2021 with the aim of improving usability for paying users and
portal users, reducing churn rates and reducing the load on our
customer support teams.
Other overheads increased by 25% to GBP4.5m. Customer
acquisition costs were increased by 50%, including higher sales
commissions, higher marketing spend and an increase in our in-house
sales and marketing teams to support future growth. We also
restructured our customer success function, bringing the first-line
support team back in-house into the US and introducing more
sophisticated software tools to improve the speed and efficiency of
how customer queries are handled, including automation to improve
scalability.
During 2021 our aim is to embed the investments we have been
making, increase that investment and continue along the growth
path.
In customer acquisition, we shall target progressively larger
customers as we improve the enterprise functionality of the
SmartVault product. We shall also test new vertical markets to
diversify our base from the accounting and bookkeeping sectors;
these are likely to be in the broader financial services sector,
particularly niches that are currently underserved by technology
providers.
Our customer success teams will focus on reducing churn and
expanding our business with existing customers. We shall explore
packaging additional functionality as enhanced subscriptions to
increase our ARPU and improve the value of SmartVault within the
workflows of our clients' operations.
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. Virtual Cabinet's financial
objective is sustained growth in profit and cash generation.
Virtual Cabinet 2020 2019 Change
Reported Constant
currency currency
---------- ----------
Recurring revenue GBP7,578k GBP7,187k 5% 6%
---------- ---------- ---------- ----------
Total revenue GBP8,473k GBP8,325k 2% 2%
---------- ---------- ---------- ----------
Adjusted Profit / (Loss) GBP3,891k GBP3,372k 15%
---------- ---------- ----------------------
ARR at 31 December GBP7,854k GBP7,466k 5% 4%
---------- ---------- ---------- ----------
Paying users at 31
December 43,631 45,251 (4)%
---------- ---------- ----------------------
ARPU at 31 December GBP180 GBP165 9% 7%
---------- ---------- ---------- ----------
Net MRR Churn 0.2% 0.1% n/a
---------- ---------- ----------------------
2020 was a year of two halves. As previously announced, H1 was
challenging for new customer acquisition at Virtual Cabinet.
COVID-19 lockdowns in the UK and Australia had a significant impact
on our ability to sell into new customers because the product often
requires on-premise implementation and training; remote
implementations tended to be for smaller, less complex customers.
From June, however, we have seen a sustained and encouraging
increase in new customer orders, assisted by the offer of
subscription-free periods to improve order close rates.
Additionally, we have improved our ability to deliver entirely
remote implementations even for more complex sites. We have seen
particular strength within the buoyant insolvency sector, driven by
our deep integration into the leading insolvency practice
management software.
Recurring revenue increased by 5% (6% at constant currency) to
GBP7.6m, while ARR increased by 5% to GBP7.9m. Revenue growth was
adversely impacted by higher than usual customer downgrades during
scheduled annual renewals. Whilst we have no material direct
exposure to severely troubled industries such as tourism, leisure
and retail, the clients we do have in those sectors have tended to
ask for support through contract suspensions or deferred payments,
which we have accommodated where possible.
Net MRR Churn averaged 0.2% per month (2019: 0.1%). This
reflects strong upsell revenue from customers and higher ARPU
arising from annual price increases. Upgrade sales have been driven
by add-on modules such as the portal or mobile apps as customers
have pushed these modules to a higher number of users that are now
working remotely. These upgrades and ARPU improvements were offset
by slightly higher customer churn, particularly in H1, including
two larger customers who were taken over by other firms that had
mandated an alternative document management solution. Paying users
decreased by 4% to 43,631 over the period, a reflection of the
higher customer churn, however this was offset by an ARPU increase
of 9% to GBP180.
Non-recurring revenue, which includes consulting and perpetual
licence sales, decreased 21% to GBP0.9m. We expected a reduction
due to the transition of the revenue model from an upfront,
perpetual licence model to a higher value recurring subscription
model. In addition, however, the volume of chargeable consulting
work was down significantly during H1 in particular because of
access restrictions to client sites.
Overheads were 8% lower than 2019. This is largely a result of
changes made in Australia during 2019 to reduce the size of our
sales and consulting team to match delivery capacity with expected
order intake. In addition, we have redeployed certain operational
staff to other areas of the business following efforts to use
technology to automate internal processes.
During 2021, we are targeting continued profit growth through
increased recurring revenues and higher levels of operational
leverage generated by disciplined cost control. We expect our
customer acquisition efforts to be increasingly geared towards
online lead generation rather than outbound enterprise sales. This
transition was in progress before the COVID-19 outbreak but we have
accelerated it during 2020, including a complete rebrand of the
product and a new website, which is being optimised for lead
conversion. As a group, we are very familiar with inbound,
transactional customer acquisition models. We shall also capitalise
on our strengthening position in the insolvency market, a sector
that is expected to see significant additional demand in 2021 and
beyond.
GetBusy
GetBusy 2020 2019 Change
Total revenue GBP6k GBP- n/a
------------- ------------- -------
Adjusted Profit / (Loss) GBP(1,975)k GBP(1,377)k (44)%
------------- ------------- -------
ARR at 31 December GBP17k GBP- n/a
------------- ------------- -------
Paying users at 31 182 - n/a
December
------------- ------------- -------
ARPU at 31 December GBP81 - n/a
------------- ------------- -------
GetBusy is our new product that helps people organise, manage
and collaborate around tasks. 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.
In 2020 we have continued the journey of finding product-market
fit for GetBusy via concurrent testing of different channels and
value propositions. These channels include digital inbound lead
generation, developing relationships with integration partners to
enable GetBusy to be sold into another product's installed user
base, and upselling the product into our existing document
management customer base. Product improvements, integrations and
new features have continued to be released regularly and we have
introduced a new brand and website to better reflect our target
market.
Notably, since the year-end we have agreed a partnership with
NetSuite, the leading cloud business software suite with more than
24,000 enterprise customers globally, to embed GetBusy's document
handling, task management and e-signature capability directly into
the NetSuite interface. This integration, which will be available
as a paid add-on within NetSuite's app store, provides integrated
document and signature capability within the NetSuite experience -
a unique proposition for users - together with the core GetBusy
task management functionality.
Our financial and strategic objective remains proving a viable
and scalable customer acquisition model that meets our payback
criteria. To achieve those objectives, we have clear internal
targets for each component of the customer acquisition funnel.
Relative to those internal targets, lead generation costs had
been volatile and too high. Towards the end of H1 those costs
started to decrease. The launch of our new brand and website in
mid-November, with much clearer messaging on the problems the
product solves, has been a trigger for a step-change in the cost of
leads. The proportion of visitors to the website that are signing
up for a free trial has more than doubled, and those leads seem to
be of good quality.
Conversion of leads into new customers remains a challenge. We
have had some months of strong demo-to-customer conversion rate,
but we have not yet been able to keep those rates consistent.
However, we have been encouraged by the average selling price to
customers since the new website launch, which is a combination of
the price per user and the team size.
Churn is volatile, as can be expected from such an early-stage
product. We are gathering good data on the reasons for customers
leaving as well as the reasons they are staying. That data helps us
to prioritise the product roadmap and provides feedback into our
customer acquisition messaging and onboarding processes.
Importantly, we launched our inbuilt digital signature solution,
allowing documents to be simply and legally electronically signed.
This combined with the NetSuite partnership has the potential to
provide significant opportunity in these rapidly growing markets.
We have assembled an outstanding and highly motivated team whose
experience and data-focused approach means they are well equipped
to find a path to a scalable customer acquisition model.
Given the value potential within GetBusy, and its potential
applicability to a significant addressable market, in 2021 we shall
continue our current rate of spend, on both the customer
acquisition side and in product development. Our objective remains
to create a scalable and repeatable customer acquisition model that
meets our payback criteria.
Our 2020 net spend of GBP2.0m was 43% higher than 2019,
reflecting the sales and marketing and operational infrastructure
that we have put in place in 2020.
Corporate and central costs
Corporate and central costs were down 9% to GBP1.5m, mainly as a
result of lower travel costs and professional adviser fees.
Items reconciling Adjusted Loss with Loss before Tax
On an IFRS basis, we have capitalised GBP0.6m of development
costs in 2020, which relates solely to work carried out on Virtual
Cabinet and SmartVault. Capitalised amounts in 2020 relate to,
amongst other things, the development of the VC Go suite of
mobility apps, the introduction of multiple branding within the
Virtual Cabinet portal, the user interface improvements for
SmartVault and the integration of the SmartVault with a 3rd party
billing system, which will support expansion and monetisation
efforts within SmartVault in the future. 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.
In the light of the impact of the COVID-19 pandemic on the use
of our offices, we have conducted a review of the carrying value of
the related lease assets and concluded that the asset related to
our Sydney office lease, which expires in September 2021, is
impaired as there is no reasonable possibility of its value being
recovered during the remaining lease term given local restrictions
and the reduced number of staff in our Australian business. This
has led to an impairment charge of GBP0.1m within non-underlying
items.
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 GBP0.7m is a result of the
replacement incentive plans implemented last January and an
increase in the provision for employment taxes due if options are
exercised, driven by the Company's share price, which increased by
54% over the year.
Other income of GBP0.6m relates to the full forgiveness of the
Paycheck Protection Program loan that we received in April in the
US (GBP0.4m) and the income credit for the "RDEC" portion of our
2017 UK research and development tax claim.
The loss before tax for the year was GBP1.1m, a reduction of 8%
compared to 2019.
During 2021, we will carry out work to align the statutory
structure of the Group with our brands and we expect to incur
non-underlying adviser costs in respect of that project.
Tax
We have recorded a tax credit of GBP1.5m in 2020, driven by
successful research and development tax credit claims in the UK,
slightly offset by tax payable in Australia and New Zealand where
we are locally profitable. The Group still has sizeable carried
forward tax losses in the UK and US.
Profit after tax
The Group recorded a profit after tax of GBP0.4m (2019: loss of
GBP1.2m), largely as a result of research and development tax
credits relating to previous years and the recognition of other
income in respect of the Paycheck Protection Program ("PPP") loan
forgiveness in the US, which would not be expected to recur.
Foreign currency exposure
The Group's subsidiaries do not have material foreign currency
exposures. Most revenue and expenditure transactions are conducted
in the functional currency of the individual subsidiary entity.
The Group's reported results, however, are impacted by the
translation of the results of foreign-denominated subsidiaries into
GBP. Most notably this impacts on the reported revenue figure;
exposure at the Adjusted Profit / (Loss) level is relatively minor.
It is for this reason that the Group reports constant currency
growth figures alongside reported currency.
At 31 December 2020, 42% of the Group's annualised recurring
revenue was denominated in USD, 11% in AUD and 3% in NZD. It is
expected that the proportion of recurring revenue denominated in
USD will increase to c. 46% of the total over the course of 2021,
based on the exchange rates in effect at 31 December 2020. This is
driven by the expected increase in revenue from SmartVault in the
US.
Cashflow and working capital
A number of items have contributed to the net cash inflow of
GBP0.5m in 2020, which has been achieved despite the Adjusted Loss
before Tax of GBP(0.9)m and capital expenditure on new office
fit-outs of GBP0.3m:
-- GBP0.3m was received from the director share subscription in January;
-- GBP0.4m was received as a loan from the PPP in the US, which was subsequently forgiven; and
-- GBP1.2m was received in the UK from research and development
tax credits in respect of the three years to 2019.
Net cash at 31 December 2020 was GBP2.3m, an increase of GBP0.5m
from 31 December 2019. The GBP2m revolving credit facility has
remained entirely undrawn since its completion in September
2020.
Balance sheet
The GBP0.2m increase in intangible assets in 2020 to GBP0.8m is
a result of an excess of capitalised development costs over the
related amortisation. Capitalised development costs relate solely
to the Virtual Cabinet and SmartVault products. The commercial
viability of the GetBusy product is not yet considered to be
sufficiently certain to meet the criteria for capitalisation within
IAS38 Intangible Assets; the timing of when that situation may
change is inherently uncertain.
Over the course of 2020 we have fitted-out two new offices, in
the UK and the US, which has led to an GBP0.3m increase in
property, plant and equipment. The fit-out of the US office has
been completed in early 2021. This has also led to a GBP1.6m
increase in right-of-use assets, which all relate to our office
leases. As discussed above, the remaining right-of-use asset
related to our Sydney office was impaired at 31 December 2020,
leading to a GBP0.1m charge within non-underlying costs.
Trade and other receivables increased by GBP0.5m to GBP1.8m, a
product of the timing of annual subscription renewals, a very
strong December for new business in SmartVault, and GBP0.1m of
upfront fees related to the loan facility with Silicon Valley Bank.
The current tax receivable of GBP0.7m relates to the UK research
and development tax credit due for the 2020 financial year, with
GBP0.3m of tax payable or refundable in the UK, Australia and New
Zealand, which is recorded within current liabilities.
The GBP0.3m increase in trade and other payables mostly relates
to working capital timing differences, most notably in the payment
of supplier invoices around the end of the year and in an increase
in accruals related to sales commissions following the strong final
quarter.
Deferred revenue, which is mostly derived from annual
subscriptions paid in advance has increased by GBP0.2m to GBP4.7m.
A GBP0.5m increase in SmartVault has been offset by a GBP0.3m
reduction in Virtual Cabinet, partly caused by an increase in the
proportion of customers opting to pay monthly by direct debit.
The lease liability of GBP2.1m has increased by GBP1.8m since
the prior year as a result of the two new office premises.
Over the course of 2020, 1,025,272 new shares were issued as a
result of new investments from directors and the exercise of share
options, leading to a GBP0.3m increase in share premium.
Outlook
In 2021, we expect to continue to capitalise on the trends that
have been favourable to us during 2020.
The product, sales, marketing and customer success investments
we started to make in 2020, and that we plan to accelerate in 2021,
will drive our growth in recurring subscription revenue,
particularly in SmartVault. We can make these investments
confidently in the light of favourable leading indicators and the
significantly enhanced cash headroom that we currently enjoy.
We are very clearly in the scaling phase of our document
management business comprising SmartVault and Virtual Cabinet, and
we are able to see a path to a substantial business with high
quality, predictable and valuable earnings in the medium to long
term.
Whilst yet to be proven, we believe that our GetBusy product has
the potential to open significantly greater addressable markets for
our business. The problems it solves are universal, not
sector-specific, and solutions to those problems have become even
more valuable as businesses adopt hybrid working models on a
permanent basis.
Our Group contains a combination of a proven, highly
cash-generative market-leader, a rapidly and predictably scaling
pure SaaS business in a large and valuable market, and a new
product that solves increasingly relevant problems and that has the
potential to open a significantly greater market.
This unique combination gives us confidence looking to the
future.
Environmental, social and governance matters
The Group strives to be a good corporate citizen, contributing
positively to the communities with which it interacts.
Operating in a sector that is generally environmentally benign,
our people are encouraged nonetheless to devise and implement ways
to reduce our impact on the climate and on the world's natural
resources. Document management and digital signature software can
be a core component of our customers' action plans to reduce their
use of paper and the reduced need for journeys to and from offices
reduces their carbon footprint.
Our culture is one of inclusivity, where each of our people is
valued for who they are and treated with dignity and respect. We
have the same approach to each our customer and suppliers and
expect them to share our values.
We place significant importance on the quality of our
governance. We have in place policies to ensure we go about
business in the right way, with the right counterparties and
partners, that we are managing our risks appropriately and that are
attentive to our fiscal responsibilities.
Related party transaction: alteration to director incentive
arrangements
On 7 January 2020, the Company received shareholder approval for
granting awards to Daniel Rabie, Paul Haworth and Ben Oliver under
new incentive arrangements, including the Company's Value Creation
Plan (the "VCP").
The VCP rewards share price performance above 46p by sharing a
varying proportion of incremental value created with the
executives, rewarding 3.5% of incremental value at a price of 46p
and increasing linearly to a maximum of 8.75% of value created at
100p and above, capped at 120p. The awards made to Daniel Rabie,
Paul Haworth and Ben Oliver were announced on 28 January 2020 and
were also set out in the Company's annual report and accounts for
the year ended 31 December 2019.
On 2 March 2021, following consultation with shareholders, the
Company and the participants amended the terms of the VCP so that
instead of measuring incremental value at the end of the four year
period following implementation of the VCP, participants can
jointly choose to crystallise their awards at any time in the six
months following the end of the four year period. Awards will be
measured by reference to the market capitalisation of the Company
on the date of crystallisation.
The original awards under the VCP to Daniel Rabie were subject
to a waiver of the obligations of Rule 9 of the City Code on
Takeovers and Mergers (the "Code"), which was approved by
independent shareholders of the Company on 7 January 2020 (the
"Rule 9 Waiver"). The Company notes, following consultation with
the Takeover Panel, that this amendment to the terms of the VCP
does not represent a material change to the Rule 9 Waiver and, as
such, that such waiver remains valid and no further waiver or
approval is required for the purposes of Rule 9 of the Code in
respect of the proposed amendment to the terms of the VCP. The
potential voting rights granted to Daniel Rabie by way of the
awards under the VCP remain unchanged.
In accordance with best practice and as with the January 2020
awards, the Remuneration Committee consulted the Company's largest
institutional shareholders before amending the VCP. Having
consulted its shareholders, it is the opinion of the Remuneration
Committee that the amendment to the VCP better aligns the long-term
interests of all stakeholders in the business.
Daniel Rabie and Paul Haworth, by virtue of being directors of
the Company, and Ben Oliver, by virtue of being a director of a
subsidiary of the Company, are each considered to be related
parties of the Company. The amendment to the terms of the VCP is
considered to be a related party transaction for the purposes of
Rule 13 of the AIM Rules for Companies.
The Directors (with the exception of Daniel Rabie and Paul
Haworth who are participating in the VCP) consider, having
consulted with Liberum, that the amendment of the terms of the VCP
is fair and reasonable insofar as shareholders of the Company are
concerned.
Consolidated income statement
For the year ended 31 December 2020
2020 2019
Note GBP'000 GBP'000
Revenue 3 14,179 12,661
Cost of sales (1,044) (948)
Gross profit 13,135 11,713
Operating costs (14,783) (12,854)
Other income 588
Net finance costs (66) (39)
Loss before tax (1,126) (1,180)
Loss before tax (1,126) (1,180)
Capitalised development costs (558) (331)
Depreciation and amortisation on owned
assets 558 456
Share option costs 416 286
Social security costs on share options 236 113
Non-underlying costs 126 62
Other income (588) -
Finance (income) / costs not related
to leases 9 (1)
Adjusted loss before tax 3 (927) (595)
------------------------------------------- ----- --------- ---------
Tax 1,524 (25)
--------- ---------
Profit/(Loss) for the period attributable
to owners of the Company 398 (1,205)
========= =========
Profit/(Loss) per share (pence)
Basic 4 0.81p (2.49)p
Diluted 4 0.71p (2.49)p
========= =========
Consolidated statement of comprehensive income
For the year ended 31 December 2020
2020 2019
GBP'000 GBP'000
Profit/(Loss) for the period 398 (1,205)
-------- --------
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 92 14
Other comprehensive income / (expense)
net of tax 92 14
-------- --------
Total comprehensive income for the period 490 (1,191)
======== ========
Consolidated balance sheet
At 31 December 2020
2020 2019
GBP'000 GBP'000
Non-current assets
Intangible assets 807 646
Right of use assets - leases 1,842 220
Property, plant and equipment 375 143
3,024 1,009
-------- --------
Current assets
Trade and other receivables 1,815 1,353
Current tax receivable 763 -
Cash and bank balances 2,283 1,743
-------- --------
4,861 3,096
-------- --------
Total assets 7,885 4,105
-------- --------
Current liabilities
Trade and other payables (2,614) (2,265)
Deferred revenue (4,608) (4,233)
Lease liabilities (263) (219)
Current tax payable (272) (30)
(7,757) (6,747)
-------- --------
Non-current liabilities
Deferred revenue (58) (200)
Deferred tax liabilities - (6)
Lease liabilities (1,845) (96)
(1,903) (302)
-------- --------
Total liabilities (9,660) (7,049)
-------- --------
Net assets (1,775) (2,944)
======== ========
Equity
Share capital 74 73
Share premium account 3,018 2,756
Demerger reserve (3,085) (3,085)
Retained earnings (1,782) (2,688)
-------- --------
Equity attributable to shareholders
of the parent (1,775) (2,944)
======== ========
Consolidated statement of changes in equity
For the year ended 31 December 2020
Share
Share premium Demerger Retained
capital account Reserve earnings Total
2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2020 73 2,756 (3,085) (2,688) (2,944)
Profit for the period - - - 398 398
Exchange differences on translation
of foreign operations, net
of tax - - - 92 92
---------- --------- ----------- ----------- --------
Total comprehensive loss attributable
to equity holders of the parent - - - 490 490
Issue of ordinary shares 1 262 - - 263
---------- --------- ----------- ----------- --------
Total transactions with owners
of the Company 1 262 - - 263
Share option costs - - - 416 416
---------- --------- ----------- ----------- --------
- - - 416 416
At 31 December 2020 74 3,018 (3,085) (1,782) (1,775)
========== ========= =========== =========== ========
Share
Share premium Demerger Retained
capital account Reserve earnings Total
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)
========== ========= =========== =========== ========
Consolidated cash flow statement
For the year ended 31 December 2020
2020 2019
GBP'000 GBP'000
Adjusted loss before tax (927) (595)
Depreciation of right of use asset
- leases 365 296
Income statement cost of interest on 56 -
finance leases
(Increase)/decrease in receivables (239) 268
(Decrease) in payables (37) (51)
Increase / (decrease) in deferred income 233 (397)
Cash used in operations (549) (479)
Income taxes received 1,076 74
Interest received 5 1
-------- --------
Net cash used in operating activities 532 (404)
-------- --------
Purchases of property, plant and equipment (368) (63)
Purchases of intangible assets (29) (68)
-------- --------
Net cash used in investing activities (397) (131)
-------- --------
Principal portion of lease payments (226) (256)
Interest on lease liabilities (56) (40)
Proceeds on issue of shares 263 -
Income from forgiven PPP loan 384 -
Transaction costs related to loans (94) -
and borrowings
Net cash used in financing activities 271 (296)
-------- --------
Net increase/(decrease) in cash 406 (831)
Cash and bank balances at beginning
of period 1,743 2,486
Effects of foreign exchange rates 134 88
-------- --------
Cash and bank balances at end of period 2,283 1,743
======== ========
Notes to the financial information
1. General information
GetBusy plc is a public limited company ("Company") and is
incorporated in England under the Companies Act 2006. The company's
shares are traded on the Alternative Investment Market ("AIM"). The
Company's registered office is Suite 8, The Works, Unity Campus,
Pampisford, Cambridge, CB22 3FT. The Company is a holding company
for a group of companies ("Group") whose document management and
task management software enables over 67,000 professional paying
users around the world to digitise their operations and be
productive while working in the office or remotely.
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 2020 were authorised for issue by the Board of Directors
on 2 March 2021. 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.
Other income . This is income that is derived from activities
outside of the underlying business and which is generally one-off
in nature. In 2020 this included the forgiveness of a loan granted
under the US Paycheck Protection Programme and notional income
received under the UK Research and Development Expenditure Credit
scheme.
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.
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 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.
2020 Document Task
Management Management
---------------------------- ------------ ----------- ----------
Virtual Corporate
SmartVault Cabinet GetBusy & central Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 5,433 7,578 6 - 13,017
Non-recurring revenue 267 895 - - 1,162
--------------- ----------- ------------ ----------- ----------
Revenue from contracts with
customers 5,700 8,473 6 - 14,179
Cost of sales (838) (168) (38) - (1,044)
--------------- ----------- ------------ ----------- ----------
Gross profit 4,862 8,305 (32) - 13,135
Sales, general and admin
costs (4,550) (3,422) (1,058) (1,470) (10,500)
Development costs (1,685) (992) (885) - (3,562)
--------------- ----------- ------------ ----------- ----------
Adjusted profit / (loss)
before tax (1,373) 3,891 (1,975) (1,470) (927)
Capitalisation of development
costs 558
Depreciation and amortisation
on owned assets (558)
Share option costs (416)
Social security on share
option costs (236)
Non-underlying costs (126)
Other income 588
Other finance income / (costs) (9)
----------
Loss before tax (1,126)
==========
2019 Document Task
Management Management
---------------------------- ------------ ----------- ----------
SmartVault Virtual Corporate
GBP'000 Cabinet GetBusy & central Total
GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 4,201 7,187 - - 11,388
Non-recurring revenue 135 1,138 - - 1,273
--------------- ----------- ------------ ----------- ----------
Revenue from contracts with
customers 4,336 8,325 - - 12,661
Cost of sales (770) (178) - - (948)
--------------- ----------- ------------ ----------- ----------
Gross profit 3,566 8,147 - - 11,713
Sales, general and admin
costs (3,640) (4,033) (472) (1,618) (9,763)
Development costs (898) (742) (905) - (2,545)
--------------- ----------- ------------ ----------- ----------
Adjusted profit / (loss)
before tax (972) 3,372 (1,377) (1,618) (595)
Capitalisation of development
costs 331
Depreciation and amortisation
on owned assets (456)
Share option costs (286)
Social security on share
option costs (113)
Non-underlying costs (62)
Other finance income / (costs) 1
----------
Loss before tax (1,180)
==========
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.
2020 UK USA Aus / NZ Total
GBP'000 GBP'000 GBP'000 GBP'000
Recurring revenue 5,880 5,211 1,926 13,017
Non-recurring revenue 822 256 84 1,162
--------- --------- --------- ---------
Revenue from contracts
with customers 6,702 5,467 2,010 14,179
========= ========= ========= =========
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
========= ========= ========= =========
4. Earnings / (loss) per share
The calculation of loss per share is based on the profit for the
period of GBP378k (2019: loss of GBP1,210k).
Weighted number of shares calculation 2020 2019
'000 '000
Weighted average number of ordinary
shares 49,219 48,400
Effect of potentially dilutive
share options in issue 7,251 5,557
------- -------
Weighted average number of ordinary
shares (diluted) 56,470 53,957
======= =======
Earnings / (Loss) per share 2020 2019
pence pence
Basic 0.81 (2.49)
======= =======
Diluted 0.71 (2.49)
======= =======
At 31 December 2020, there were 7,117,276 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 prior year as the Group
was loss making. At 31 December 2019 there were 5,557,643 shares
under option that would have become dilutive if the Group had been
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 2020 2019 as Constant 2019 at Change Change
originally currency constant at reported at constant
reported adjustment exchange exchange exchange
rates rates rates
--------------------- ----------- ------------ ------------ ----------- ------------ ------------
Group recurring
revenue GBP13,017k GBP11,388k GBP(51)k GBP11,337k 14% 15%
Group total revenue GBP14,179k GBP12,661k GBP(53)k GBP12,608k 12% 12%
SmartVault recurring
revenue GBP5,433k GBP4,201k GBP(26)k GBP4,175k 29% 30%
SmartVault total
revenue GBP5,700k GBP4,336k GBP(25)k GBP4,311k 31% 32%
Virtual Cabinet
recurring revenue GBP7,578k GBP7,187k GBP(24)k GBP7,163k 5% 6%
Virtual Cabinet
total revenue GBP8,473k GBP8,325k GBP(27)k GBP8,298k 2% 2%
Group Annualised
Recurring Revenue GBP13.7m GBP12.3m GBP(0.1)m GBP12.2m 11% 12%
--------------------- ----------- ------------ ------------ ----------- ------------ ------------
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