We thought the questions asked in the discussions area in our Crowdfunding Raise were superb so we wanted to replicate them here. Please let’s keep the discussions going and put forward your ideas to keep growing Crunch (and therefore your investment!)
Investor query (originally posted on Seedrs):
Hi there, impressive software and traction to date. Quick question, how come revenue and ebitda in 2021 is down from 2020 and then 2022 only at the level of 2020
Our response:
Thank you for your positive comments on software and traction and your question on Ebitda.
The industry has had a number of issues to deal with over the past few years, Brexit, IR35, and not forgetting the Pandemic. 2021 was a hard trading year where the businesses needed to move quickly to address a changing economy and Crunch was no different. However, we used the time well and accelerated our pivot to an accountancy and tax platform (essentially we were a highly ‘teched up accountancy firm with a ceiling on scalability before). As part of this, we nailed the final area, the accountancy side, and proved the super scalability of the Crunch Accountancy Network with our 3rd model. This has worked fantastically and by January 80% of the accounts production will be in our network. Due to the power of our platform, customers are unaware of this and only deal with Crunch Accountants and our Client Managers. The positive for clients is the market-beating quality and fantastic service levels.
As you can see from the pitch deck (slide 22) we started the new platform build in 2016 and ensured the business delivered a ‘business sustaining’ level of growth until we launch our new platform in 2020 with its super scaling capabilities. The old Crunch model delivered great cash generation but could not scale easily past 300 new customers per month.
From 2018 to 2020 we have seen a Year On Year growth of over 9%. FY21 and FY22 take account of the impact on the industry as we recover from the effects of the pandemic. Although we will post reduced turnover we have adjusted our cost base to ensure we are fit and exceptionally agile for the next phase of Crunch.
Stephen Paynter
Head of Finance
