Key Performance Indicators

The assessment of our KPIs, their link to our strategy, movement in the year and their progression.

Revenue (£m)

£447.7m +14%
2021 447.7
2020 393.8
2019 328.9
Definition
Revenue from sales made to all customers (excluding intra-group sales which eliminate on consolidation).
Strategic focus
Gamma monitors growth in revenue as it 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 full year trading of acquisitions in 2020 across Europe.
Outlook
Continued growth as further adoption of cloud.

Gross profit (£m)

£228.5m +14%
2021 228.5
2020 200.8
2019 166.5
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.

Gross margin (%)

51.0% +0.0%
2021 51.0
2020 51.0
2019 50.6
Definition
Gross profit as a percentage of revenue.
Strategic focus
Gross margin is a measure of the Group’s profitability.
Progress
Gross margin is in line with the prior year.
Outlook
Gross margin is expected to remain consistent as the product mix across the Group tends to an equilibrium.

Adjusted EBITDA (£m)*

£95.4m +21%
2021 95.4
2020 79.0
2018 63.5
Definition
Adjusted earnings before interest, taxation, depreciation, gains and losses on disposal of fixed assets, amortisation and exceptional items.
Strategic focus
Adjusted 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
Adjusted EBITDA has continued to grow.
Outlook
Continued growth as further adoption of cloud.
 
* Adjusted EBITDA is now being shown as a KPI rather than EBITDA as it gives a reader of the accounts a view of the underlying trading picture which is comparable year to year.

Cash (£m)

£52.8m -2%
2021 52.8
2020 53.9
2019 53.9
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
Cash has decreased slightly despite spending £49.5m on acquisitions during the year (note 18).
Outlook
The Group expects to increase the cash balance subject to any further acquisition opportunities that may arise.

Cash generated by operations (£m)

£89.8m +27%
2021 89.8
2020 70.3
2019 54.0
Definition
Net cash flows from operating activities before tax paid.
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 in line with EBITDA – cash conversion is expected to remain strong.

EPS (p)

55.2p -17%
2021 55.2
2020 66.6
2019 36.1
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 declined as a result of an exceptional item relating to the sale of The Loop in the prior year (note 8).
Outlook
Expected to grow in the absence of any unforeseen events.

Fully diluted adjusted EPS (p)

64.0p +25%
2021 64.0
2020 51.3
2019 40.8
Definition
Adjustments to earnings include in the current year amortisation arising on business combinations, change in fair value of acquisitions, exceptional items and related tax benefits.
Strategic focus
Fully diluted adjusted EPS is a measure of how successful we are in our strategy and ultimately how Gamma increases value for its shareholders.
Progress
Fully diluted adjusted EPS has continued to grow.
Outlook
EPS is expected to continue to grow.

Performance metrics

Number of UK hosted seats ('000s)

676 +12%
2021 676
2020 601
2019 522
Definition
Number of billed seats at the end of the year on Horizon (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)

1,430 +21%
2021 1,430
2020 1,185
2019 1,016
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 (%)

100.000% +0.0%
2021 100.000
2020 99.994
2019 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)

£19.6m +52%
2021 19.6
2020 12.9
2019 11.3
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 (%)

89% -2%
2021 89
2020 91
2019 93
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 a full year of the mobile focused distribution business which was acquired as part of the HFO acquisition in July 2020.
Outlook
Maintain a high proportion of recurring revenue.

Key to strategy

  1. Cloud Telephony and UCaaS Evolve our strong Cloud telephony position into the UCaaS market
  2. Fixed and Mobile Telecom Build on our fixed and mobile telecom strength to differentiate our proposition from pure OTTs
  3. Company Expansion Expand into Europe to gain continued growth and scale
  4. Digital progression Continue to build on our digital capabilities to assure agility and sustain competitiveness

Key to KPIs

  1. Revenue
  2. Gross profit
  3. Gross margin
  4. Adjusted EBITDA
  5. Cash
  6. Cash generated by operations
  7. EPS
  8. Fully diluted adjusted EPS

Key to risks

  1. Unplanned service disruption
  2. Data loss and cyber attacks
  3. Over-reliance on suppliers
  4. Inability to attract and retain top talent
  5. Uncertain competitive landscape
  6. Price erosion
  7. Legal and regulatory non-compliance
  8. Unsuccessful M&A strategies

The opportunity for UX and CX to win in the Experience economy

Hybrid here to stay

Fundamentals are more important than ever

The ESG Committee oversees the development and activity of Gamma's ESG agenda.