Key Performance Indicators
The assessment of our KPIs, their link to our strategy, movement in the year and their progression.
Revenue (£m)
£393.8m +20%
2020 393.8
2019 328.9
2018 284.9
Definition
Revenue from sales made to all customers (excluding intra-group sales which eliminate on consolidation).
Strategic focus
Gamma monitors growth in revenue as this shows how successful Gamma has been in expanding its markets and growing its customer base.
Progress
Revenue has grown in the year due to continued growth in our key products in the UK as well as new acquisitions across Europe.
Outlook
Continued growth as further adoption of cloud and full year trading of newly acquired overseas entities.
Gross profit (£m)
£200.8m +21%
2020 200.8
2019 166.5
2018 132.2
Definition
Revenue less cost of sales.
Strategic focus
Gross profit is the measure used to evaluate the performance of the Group as well as each of the operating segments.
Progress
Gross profit has continued to grow as a result of increased revenue and efficiencies achieved across the Group.
Outlook
Continued growth as further adoption of cloud and full year trading of newly acquired European entities.
Gross margin (%)
51.0% +0.4%
2020 51.0
2019 50.6
2018 46.4
Definition
Gross profit as a percentage of revenue.
Strategic focus
Gross margin is a measure of the Group’s profitability.
Progress
Continued growth.
Outlook
Gross margin growth is expected to slow as the product mix across the Group tends to an equilibrium.
EBITDA (£m)
£98.6m +58%
2020 98.6
2019 62.6
2018 48.3
Definition
Earnings before interest, taxation, depreciation, gains and losses on disposal of fixed assets and amortisation, but after exceptional items.
Strategic focus
EBITDA is the measure used to evaluate the performance of the Group as well as each of the operating segments, including their support functions.
Progress
EBITDA has continued to grow but also includes exceptional items relating to the disposal of The Loop during the year (note 9).
Outlook
Continued growth as further adoption of cloud and full year trading of newly acquired European entities.
Cash (£m)
£53.9m +0%
2020 53.9
2019 53.9
2018 35.5
Definition
Cash and cash equivalents held at the end of the year.
Strategic focus
Cash demonstrates financial strength and the ability to pay sustainable dividends to our shareholders.
Progress
Outlook
The Group intends to maintain a cash balance at this level subject to any further acquisition opportunities that may arise.
Cash generated by operations (£m)
£70.3m +30%
2020 70.3
2019 54.0
2018 40.6
Definition
Net cash flows from operating activities before tax.
Strategic focus
Cash generated by operations is a measure of the quality of Gamma’s earnings. It provides financial strength and the ability to pay sustainable dividends to our shareholders.
Progress
Cash generated by operations has continued to grow.
Outlook
Cash generated by operations is expected to grow inline with EBITDA – cash conversion is expected to remain strong.
EPS (p)
66.6p +84%
2020 66.6
2019 36.1
2018 30.0
Definition
Earnings after tax divided by the full diluted number of shares.
Strategic focus
Long-term growth in EPS is a fundamental driver to increasing shareholder value.
Progress
EPS has continued to grow; however includes exceptional items relating to the sale of The Loop (note 18).
Outlook
Expected to grow in the absence of any unforeseen events.
Adjusted EPS (p)
51.3p +26%
2020 51.3
2019 40.8
2018 30.3
Definition
Adjustments to earnings include in the current year amortisation arising on business compensation, exceptional and related tax benefits.
Strategic focus
Adjusted EPS is a measure of how successful we are in our strategy and ultimately how Gamma increases value for its shareholders.
Progress
EPS has continued to grow
Outlook
EPS is expected to continue to grow
Performance metrics
Number of UK hosted seats ('000s)
601 +15%
2020 601
2019 522
2018 435
Definition
Number of billed seats at the end of the year on all UK Cloud PBX products.
Strategic focus
Growth in this metric demonstrates the ability of the sales force to win new customers while also retaining existing relationships.
Progress
We have achieved growth from prior year as planned.
Outlook
Continued growth.
Number of UK SIP Channels ('000s)
1,185 +17%
2020 1,185
2019 1,016
2018 856
Definition
Number of billed UK SIP channels at the end of the year.
Strategic focus
Growth in this metric demonstrates the ability of the sales force to win new customers while also retaining existing relationships.
Progress
We have continued to grow our number of SIP channels during the year.
Outlook
Continued growth.
UK Network Availability (%)
99.994% -0.0%
2020 99.994
2019 99.997
2018 99.997
Definition
Availability of UK strategic platforms.
Strategic focus
By having a stable, available network this helps to attract and retain customers.
Progress
The network has continued to have strong availability throughout the year.
Outlook
To continue to have strong availability.
R&D Spend (£m)
£12.9m +14%
2020 12.9
2019 11.3
2018 10.0
Definition
The sum of research costs expensed through the statement of comprehensive income and capital expenditure on development costs in intangibles during the year.
Strategic focus
New and continued development on our products contribute strongly to overall growth, maintaining high returns and strengthens our overall market position.
Progress
We have continued to invest in research and development.
Outlook
Continued investment.
Recurring Revenue (%)
91% -2%
2020 91
2019 93
2018 92
Definition
The percentage of revenue recognised over time over total revenue. See note 5 in the financial statements.
Strategic focus
Recurring revenue gives an indication of future performance of the business.
Progress
Recurring revenue remains at a high level though showing a slight decline as a result of the mobile focused distribution business which was acquired as part of the HFO acquisition.
Outlook
Maintain a high proportion of recurring revenue.
In previous years, we have reported metrics regarding the Direct customer profile, Indirect strategic and enabling as a percentage of total revenue, Net Promoter Score (Direct) and Net Promoter Score (Indirect). These have been excluded in the current year while more relevant KPIs are established for the whole Group.
Also in this section
Risk management
Understanding the risks that affect the Group.
Principal risks
Our principal risks and how we mitigate them.
How we communicate with our stakeholders
Engaging with our stakeholders and acting in a way that promotes the long-term success of the Company.