FOR MAY 2022
Dear Streamline Business Group shareholders,
It’s hard to believe we’ve reached May 2022 already, and definitely time to provide an overdue report to you all. Since the report you received in August 2021 – with the milestone headline of our first million dollar quarter – you will have also received updates associated with the Annual General Meeting – including the review copy of AGM minutes sent to you on 17 November.
FINANCE REPORT – Consolidated 2022 Year end results
Our Group Revenue budget for the 2022 Financial year was $4,709,418 against actual revenues of $4,610,185 so 97.89% of budget, which was a very gratifying end position, given Auckland’s protracted lockdown and its financial impacts.
Total Group revenue growth was 32% year on year and we finally broke through the 4 million barrier, which had been proving a difficult task.
It is expected that May 2022 will be our first $500,000 month, with many more to follow. Key points to note are:
- The Secret Source acquisition contributed $356,070 and was 111.04% of their expected revenue contribution.
- Streamline Solutions, including Charities and Acume Revenue in 2022, was 102.39% of budget at $3,501,298 against a budget of $3,419,570.
- Admin Army had a huge year growing 91% year on year, to revenues of $752,817, which was 77.67% of their stretch budget of $969,202.
Our 2022 Ebidta result was $596,531, against our 2021 result of $903,607.
Let’s take a look at the numbers: CRAIG CAN POPULATE if this table is used and check this
This is nearly a 34% decline year on year due to three key factors: Increased costs, a drop in depreciation by some 15% year on year and the absence of the wage subsidy in the 2022 year.
Increased costs, particularly in respect to payroll costs, were up 43% year on year. This reflects increases for existing staff, but also considerable growth in staff numbers across the Group.
Some of our product development costs, particularly for the Acume finance suite, have not yet started to be depreciated as they have not been available for sale until the current financial year.
To help mitigate the impacts of cost increases, the business had an across the board increase for all client work, effective on the 1st April 2022 of 5%. This is expected to positively impact bottom line performance by about NZD250.000. We have organised the business into a timetable now to allow such increases to be more of an expected outcome each year, passed onto clients at the beginning of each new financial year.
REVENUE BUDGETS – 2023
Budgeted Revenue for the 2023 financial year would see total Group revenue rise to $6.8 million, a projected increase of 55% year on year.
While most budgeted opportunities are well down the track of either implementation or commitments gained, resourcing the team to onboard these clients remains our key risk.
All businesses / brands within the Group, now operate and function almost as stand-alone entities. This gives much more visibility to the financial performance of each and enables a clear line of sight to on-target performance and delivery.
MOVING BEYOND COVID
Now that the clouds of Covid-19 are lifting, I think it’s worth repeating a statement I made on 3 May 2020: “We don’t get to choose our crises, but we can most certainly choose how we respond to them. That has been the guiding principle for the team’s response to the Covid-19 pandemic. We are not ones to give up and go home!”
At this time two years ago we had dubbed FY2020 as a year of ‘Setting the Stage for Growth’ and were positioning FY2021 as a year of ‘Bouncing Back’. I’m pleased to say that for our next phase, FY2022 is all about ‘Focused Delivery’.
It’s exciting to note that we have now entered our fourth year evolving and operating as Streamline and with it our staff numbers have just broken through 100 people – almost evenly located in New Zealand, Fiji and India.
The growth in team size has come with challenges in maintaining our positive culture and good communications. In March we held our first Virtual Town Hall event, hosted by the NZ team members. This provided a way for many of the Global team to interact with colleagues that they would not usually have had the opportunity to do. Fiji will be hosting a Town Hall in July and India in November.
In July our new Global HR Manager [name?] will start with us, based out of Fiji. He will be a huge help with the considerable demands of recruitment, training and career planning that a business our size now has.
WHAT, HOW, WHY
A key part of our future mapping emerged on 16th December 2021 when we finally agreed on our Group’s What, How, Why. This has delivered something for everyone to identify with, both clients and teams alike.
It is having a profound impact as we grow into and shape the business around these statements.
- What – The right information, at the right time, to the right people, to make the right decisions
- How – Exceptional people, working together, designing efficient processes, using enabling technologies
- Why – We believe everyone should be unleashed to operate in their zone of genius
The Board remains on a very considered path regarding succession planning for my role as CEO. I signalled mid-2021 that the business needed to plan for a new CEO to be in place before the end of 2023, so the criteria and the search has begun. I plan to continue my association with the business as a director beyond 2023, but look forward to handing over the CEO reigns in the not too distant future.
THE FUTURE FOR SHAREHOLDERS
The business life cycle of the Group continues to evolve. Allied to this there is an awareness that some shareholders are looking to sell their shares and that some staff are keen to be involved at a Shareholder level. The Board is actively looking at how to enable this process via a willing seller / willing buyer construct.
The preferred option at present would see us using the Orchestra platform, which maintains our share register. We envisage having two trading windows each year, lasting for 2 weeks each. These trading windows would be preceded by a Shareholder Communication, so that all shareholders are in possession of the same company information related to performance and opportunity for the business. During this trading window sellers could nominate the price they are looking for and sellers could agree or propose an alternative.
Another update on this will follow our next board meeting on the 28th July.
PAYMENT OF A DIVIDEND
At our Board meeting on 28 April, it was agreed that in respect of the 2022 Financial Year, a dividend of $0.005 per share be issued. Paying a dividend was regarded by a majority of the board as a sensible way to reward shareholders, many of whom have been on a very long journey to this point, as well as sending a very clear message that the business is going well. We are working with our accountants Grant Thornton to put the mechanics in place for the dividend. You can expect a further update after the July Board meeting to advise on the specifics of the payment date.
In his new role as CIO, Jeremy Tee, is helping us move towards ISO 27001 accreditation. This will enable some client decision-making boxes to be ticked early in the sales cycle and thus help with a quicker sales and onboarding cycle.
As you can see there is a lot going on. As the business navigates its way into 2023 and beyond, the Board and I are genuinely excited about the opportunities we can see ahead for the Group.
There will be turbulence and raiks to navigate as there always are, be that in terms of resourcing, an inflationary environment or the impacts of global unknowns such as the Russia / Ukraine war. As with our path through the Covid-19 pandemic we believe we have the necessary resilience and a firm direction to bring further growth and success.
The next Board meeting is scheduled for Thursday 28 July and the date set for this year’s AGM is Thursday 22 September. If you have not received your AGM invitation please let me know.
Your Chair – Craig Pellett
m: +64 21740235
p: +64 9 9091030