GetBusy – 94% annual recurring revenue, a little winner in the making

This time last year the shares of this Cambridge-based technology and software services group were flying high at 112p, that was just before the announcement of its 2020 final results on 1 March.

They are now trading at around the 68p level and could well be in for another run upwards ahead of and after the 2021 year’s results are released on 1 March this year.

The business

Developing and selling documents and task management software products is the business of GetBusy (LON:GETB).
It has a declared mission ‘to make people productive and happy’ – which is, of course, a very good basis for any business.

The group’s suite of software applications helps to streamline complex administration tasks for over 70,000 fee-earning professionals, enabling enhanced productivity and security anytime, anywhere.

The company, which was set up in 2017, has operations across the UK, the US, Australia and New Zealand.

Its products

Principally the company provides highly secure forms of digital document distribution, workflows and client chat.
Its main product offering includes ‘Virtual Cabinet’, ‘SmartVault’ and GetBusy.

Focused upon the medium size to enterprise size content management (ECM) markets, the Virtual Cabinet is a desktop document management, workflow and Cloud portal tool.

It is used by 27 of the top 100 accounting firms in the UK and 22 of the top 100 firms in Australia and New Zealand.
While the SmartVault product is a Cloud-based document management software which targets the professional small and medium enterprise (SME) market.

And finally, the GetBusy offering, is a team and client task management, and signatures application.

Make your work life easier and build exceptional working relationships

The GetBusy groups specialist productivity software solutions enable growing businesses to work securely and efficiently with their customers, suppliers and teams anytime, anywhere.

Its solutions can be delivered flexibly across cloud, mobile, hosted and on-premise platforms, whilst integrating seamlessly with a wide variety of other class-leading core business systems.

They enable users to digitise their operations and be productive while working in the office or remotely.

With over 70,000 paying users across multiple market sectors and jurisdictions, GetBusy is an established and fast-growing SaaS business delivering sustained double-digit growth in high-quality recurring subscription revenue over the long term.

The group, which has over 136 employees, has 1.5m portal users.

Equity

There are some 49.58m shares in issue.

The larger shareholders include Clive Rabir, Non-Exec Dir (18.6%), BGF Investment Management (14.4%), Canaccord Genuity Wealth (9.08%), Gregory Wilkinson (7.44%), Burgundy Asset Management (6.71%), Herald Investment Management (5.92%), Fidelity Management and Research (5.11%), Gresham House Asset Management (4.58%), River and Mercantile Asset Management (4.09%) and Daniel Rabie, CEO (3.20%).

Recent Trading Update

Less than three weeks ago the group issued a Trading Update ahead of announcing its 2021 year-end results on 1 March.

The loss-making group made very good progress over the year to end December.

Broker’s View

William Larwood, analyst at Liberum Capital, has estimated that the 2021 year will have seen revenues rise to £15.1m (£14.2m) with fractionally deeper losses at £1.2m (£0.9m).

He is going for £16.2m revenues in this year to end December, with slightly lower losses of £1.1m.

He does rate the shares as a ‘buy’ looking for 130p.

My View

With and annual recurring revenue of around 94% this little group is a winner in the making, as far as I am concerned.
That its is still loss-making does not disturb me at all – it is, after all, still in its early development stages and its net cash balances are more than double expected losses.

It is bringing on and progressing new models of business, like its Certified Vault which has massive upside.

The group’s shares have the potential to climb back up to their previous 112p High and even further.

In the meantime I set a new Target Price of 85p for the shares.

(Profile 05.05.20 @ 60p set a Target Price of 75p*)