Whilst these recurring term licence sales require the support of a level of services, the proportion of total revenue from term licences is expected to increase, and revenue from perpetual licences is likely to continue to decrease. Recurring revenue also includes support and maintenance from customers with perpetual licences; this revenue is expected to transition in time to being part of the subscription licences.
ARR
The Annualised Recurring Revenue (“ARR”) (annualised value at the year-end of committed recurring contracts for licences and support & maintenance) increased in the year by 10% from £10.2m to £11.2m as at 31 January 2021. The growth rates varied by region as shown in the table below with the US growing at the fastest rate of 24%. The overall renewal rate was 90%.
|
ARR by region |
|||
|
FY 2021 |
FY 2020 |
% growth |
|
|
UK/Ireland |
3.88 |
3.32 |
17% |
|
Europe |
5.04 |
4.96 |
2% |
|
US |
1.24 |
1.00 |
24% |
|
Australia |
1.05 |
0.90 |
17% |
|
Total ARR |
11.21 |
10.18 |
10% |
Committed revenue
The level of committed revenue (revenue for future services, licences and support contracts committed contracted at the balance sheet date) increased significantly in the year from the business focus of extending the commitment periods and duration of contracts, as well as signing some higher value service contracts. The level of committed project services revenue increased by 26% from £4.5m to £5.7m.
The combination of committed revenue and a strong and growing pipeline of prospects means that the business starts the current financial year with a good likelihood of making further progress on its revenue growth plan. With the business focus on developing and selling repeatable software solutions under a SaaS model, there is an increased level of revenue visibility, which allows the Board to plan future investment with confidence.
Regional revenue
Revenue growth by region is shown in the table below:
|
Regional revenue |
|||
|
FY 2021 |
FY 2020 |
% change |
|
|
UK/Ireland |
8.44 |
8.81 |
(4%) |
|
Europe |
11.15 |
10.24 |
9% |
|
US |
2.91 |
2.25 |
29% |
|
Australia |
2.10 |
2.08 |
1% |
|
Total revenue |
24.60 |
23.38 |
5% |
Revenue in the UK/Ireland region fell by 4% but this was largely due to timing of closing some contracts as total sales orders signed grew in the year. Revenue in the European business was lower on a like for like basis mainly due to Covid-19-related project delays (following the postponement of the French local elections in H1), although overall revenues in Europe grew by 9%, benefitting from three additional months of acquired revenues. Pleasingly, there was a pick-up in revenue in the European operations in H2 FY 2021. Revenue in the US, which now represents 12% of Group revenue, had the highest growth rate at 29%.
