TIDMSOG
RNS Number : 1122V
StatPro Group PLC
05 August 2015
5 August 2015
StatPro Group plc
Interim results for the six months ended 30 June 2015
StatPro Group plc (AIM: SOG), the AIM listed provider of
portfolio analysis and asset pricing services for the global asset
management industry, announces its interim results for the six
months ended 30 June 2015.
Six months Six months Change Constant
ended 30 June ended 30 June currency
2015 2014
Revenue GBP15.44 m GBP15.71 m (2%) 2%
Annualised Recurring Revenue
(1) GBP28.62 m GBP28.40 m 1% 4%
Profit before tax GBP0.82 m GBP1.08 m (24%) (15%)
Adjusted EBITDA (2) GBP1.73 m GBP2.03 m (15%) (9%)
Earnings per share - basic 0.8p 1.0p (20%)
- adjusted (2) 1.0p 1.3p (23%)
Interim dividend per share 0.85p 0.85p -
---------------------------------------------- --------------- --------------- ------- ----------
Financial highlights:
-- Group Annualised Recurring Revenue ("ARR") (1) up 4% (4) to
GBP28.62 million (2014 at constant currency: GBP27.54 million)
-- StatPro Revolution annualised recurring revenue (1) up 61%
(4) to GBP6.47 million (2014 at constant currency: GBP4.01
million)
-- Recurring revenue from StatPro Revolution accounts for 23% of Group ARR (2014: 15%)
-- As expected, continued investment in product development and
cloud technology resulted in lower adjusted EBITDA (2) of GBP1.73
million (2014 at constant currency: GBP1.90 million)
-- Forward order book of contracted revenue (3) grew by 4% (4)
to GBP37.01 million (2014 at constant currency: GBP35.60
million)
-- Free cash flow of GBP0.78 million (2014: GBP0.54 million)
-- Interim dividend maintained at 0.85 pence per share
Operating highlights:
-- Advanced Risk Management module in StatPro Revolution releases in May and September 2015
-- Continued focus on revenue per client; average annualised
revenue for StatPro Revolution clients increased 73% to GBP21,400
(2014: GBP12,400)
-- StatPro Revolution Performance module is on track for release in H1 2016
-- Signed new GBP20 million, five year banking facility with Wells Fargo
(1) Annualised Recurring Revenue is the annual value of revenue
contractually committed at period end.
(2) Adjusted EBITDA and adjusted earnings per share are EBITDA
and earnings per share after adjustment for amortisation of
acquired intangible assets, and share based payments (notes 2 and
4).
(3) Forward order book of contracted revenue is the total amount
of software and professional services revenue that is contractually
committed at period end.
(4) At constant currency.
Justin Wheatley, Chief Executive of StatPro, commented:
"We have maintained our high levels of recurring revenue and
driven sales in our cloud-based service, StatPro Revolution, to
both our existing customer base and a range of new customers.
"StatPro Revolution saw annualised recurring revenue increase by
61% over the last 12 months and now contributes 23% of the Group's
total recurring revenue.
"We have also secured a GBP20 million banking facility with
Wells Fargo which will provide us with added flexibility to support
our growth.
"With our forward order book of contracted revenue continuing to
grow and the momentum that StatPro Revolution is developing, we
remain on course to establish the Group as a lower cost, higher
margin pure cloud-based business."
Enquiries:
StatPro Group plc
Justin Wheatley, Chief Executive 020 8410 9876
Andrew Fabian, Finance Director
Panmure Gordon - Nomad and Broker
Corporate Finance - Freddy Crossley
/ Fred Walsh 020 7886 2500
Corporate Broking - Tom Salvesen
Instinctif Partners
Adrian Duffield / Lauren Foster 020 7457 2020
About StatPro
StatPro is a global provider of award winning portfolio
analytics solutions for the investment community. The Group's
cloud-based platform provides vital analysis of portfolio
performance, attribution, risk and compliance. This multi-asset
class analytics platform helps StatPro's clients increase assets
under management, improve client service, meet tough regulations
and reduce costs.
The Group's integrated and global data coverage includes over
3.2 million securities such as equities, bonds, mutual funds, FX
rates, futures, options, OTCs, sector classifications and much else
besides. StatPro also covers most families of benchmarks including
MSCI, FTSE, Russell, NASDAQ and the licence free Freedom Index.
StatPro has grown its Annualised Recurring Revenue from less
than GBP1 million in 1999 to around GBP29 million at 30 June 2015.
The Group has operations in Europe, North America, South Africa,
Asia and Australia, with hundreds of clients in 37 countries around
the world. Approximately 80% of recurring revenues are generated
outside the UK. StatPro Group plc shares are listed on AIM.
Overview
The Group reached an inflexion point at the beginning of the
current financial year in the roll out of its cloud-based product
StatPro Revolution and continues to build on this. The Annualised
Recurring Revenue ("ARR") of StatPro Revolution jumped by 61% over
the last 12 months and now contributes some 23% of the Group's
total ARR (2014: 15%). This change in the revenue mix underpins the
Group's strategy to becoming a pure cloud services provider.
The Board anticipates that the Group will continue the process
of converting its clients from its StatPro Seven product to the
StatPro Revolution platform. The Group expects the bulk of clients
will convert over the next three to four years. 52% of software
clients by value (2014: 41%) have now contracted for StatPro
Revolution.
In the first half of 2015, approximately 82% of new sales were
upsells to existing clients. At the same time, the roll out of
StatPro Revolution has opened up a number of new markets and
opportunities, both geographically and by type of customer,
including hedge funds and private wealth asset managers. The net
growth rate for StatPro Revolution was 61% over the last 12 months
(2014: 85%).
Total Group revenues grew 2% on a constant currency basis to
GBP15.44 million (2014 at constant currency: GBP15.20 million) and
the Group's ARR as a whole grew 4% on a constant currency basis to
GBP28.62 million (2014 at constant currency: GBP27.54 million).
As expected, profits were slightly reduced in H1 2015 due to the
Group's continued investment programme to underpin future revenues
and growth potential. The Board is maintaining its interim dividend
at 0.85p (2014: 0.85p).
The Group has secured a GBP20 million banking facility with
Wells Fargo. Although the Group has cash and is cash-generative,
the Board decided to strengthen its financial position. This
facility provides the Group with added flexibility to support its
growth. Wells Fargo specialises in supporting technology growth
companies and is very familiar with recurring revenue business
models such as StatPro's.
Strategy
StatPro provides portfolio analysis and data for the
international asset management industry, a highly regulated and
expanding sector. Its sophisticated solutions address the
complexity of investment processes driven by a number of industry
factors including multi-jurisdictional compliance, regulatory
change and rising demand for cloud-based reporting and
analysis.
Globally, the total figure for assets under management is
estimated at over $87 trillion with significant compound growth
over the past 20 years. At the same time, demand from the asset
management industry for StatPro products is being driven by the
increasing requirement for more types of analysis, as well as the
need for greater levels of accuracy, faster delivery of analysis
and data and regulatory requirements.
StatPro achieves high client retention through a combination of
long term contracts and deeply embedded systems, underpinned by
superior levels of expertise, service and continuous
innovation.
In early 2011, StatPro introduced StatPro Revolution, its
cloud-based highly centralised platform with extensive data and
portfolio capabilities. Over the past four years, StatPro has
continued to service its existing client base whilst upselling the
cloud capabilities that StatPro Revolution offers.
At the same time, StatPro Revolution has opened a range of new
addressable markets to StatPro within the asset management sector,
including hedge funds, private wealth businesses and fund
administrators wishing to offer portfolio analytics as a service to
their clients.
Acceptance of cloud-based services is now almost universal with
the greatest concern for StatPro's clients being compliance with
the ever-growing list of regulations, whilst keeping IT budgets at
a reasonable level.
Current trading and outlook
The Group has some GBP37.01 million in forward order book of
contracted revenue secured over the next few years (2014 at
constant currency: GBP35.60 million). GBP11.75 million or 32% of
the forward order book (2014 at constant currency: GBP7.46 million
and 21%) is for StatPro Revolution, of which GBP4.33 million (2014:
GBP2.71 million) relates to some 60 contracts from new StatPro
Revolution clients or extensions of existing contracts signed by
the Group in H1 2015.
With recurring revenues of 93%, StatPro continues to be
profitable and cash generative and the Group's strategy remains to
return value to shareholders. At the same time, StatPro now has
increased flexibility with the new financing facility to take
advantage of opportunities for scale and earnings enhancement.
With this level of momentum and growing revenue visibility, the
Board is confident that the Group will continue to deliver against
its strategic objectives and drive further growth in StatPro
Revolution revenues.
Operational review
StatPro has seen strong growth in StatPro Revolution ARR over
the past year, up 61% to GBP6.47 million (2014: GBP4.01 million at
constant currency) and continued stability for the StatPro Seven
platform with total ARR of GBP18.67 million at the end of June 2015
(GBP19.86 million before impact of StatPro Revolution conversions)
(2014: GBP20.01 million).
The Group has made good progress in implementing a strategy to
convert clients from the StatPro Seven product to the StatPro
Revolution platform with 52% by value of software clients using
StatPro Revolution (2014: 41%). The Group has a growing list of
clients that it expects to convert to StatPro Revolution in due
course as it rolls out further functionality.
In June 2014, StatPro implemented a new pricing policy,
requiring a minimum relationship fee from new clients of $18,000
p.a. (up from $1,200 p.a.). As a result, this has increased new
revenue per client. By focusing attention and resources on more
profitable clients, StatPro has also improved its basic operating
cost model.
In H1 2015, the Group has focused on migrating those clients
that currently pay less than $18,000 p.a. to the new minimum
subscription level. As a result of the new pricing policy, the
number of clients has decreased, but the average value of
subscriptions has risen to GBP21,400 from GBP12,400 last year.
Approximately 82% of new sales in H1 2015 (2014: 73%) were upsells
to existing clients. The Group believes that StatPro Revolution is
particularly well adapted for repeat sales to clients and that
existing clients will continue to be a rich source of new business.
With a large base of clients across 37 countries, StatPro has a
ready-made market to sell additional services, portfolios and
modules.
StatPro Revolution
Development of the StatPro Revolution cloud platform has gone
well in H1 2015 with some very significant new functionality for
the Advanced Risk Management module being delivered. A key
development has been a new Australian Regulation for the SRM
(Standard Risk Measure) for Superannuation funds. The Group started
promoting this new service together with National Australia Bank in
July 2015.
StatPro received another award for "Best Performance and
Attribution System 2015" from FTF News. This is a much respected US
award that is judged by the votes of asset managers.
As planned, during the second half of 2015, StatPro will launch
the final elements of the Advanced Risk Management module within
StatPro Revolution, which offers significantly more functionality
than the risk module in StatPro Seven. The Group anticipates that
many of its risk clients using StatPro Seven will convert to this
service in due course.
The Group is also building a new high volume calculation
platform using Apache(TM) Hadoop(R) technology which will enable it
to offer StatPro Revolution to clients with extremely large
portfolios and benchmarks. This will form an integral part of
StatPro's advanced fixed income attribution module planned for
release in 2016.
The StatPro Revolution performance module is progressing as
planned and StatPro will be releasing the full replacement of
StatPro Seven to several clients on a beta basis in the second half
of 2015 and will go live in 2016.
The Group markets its data services in StatPro Revolution as
part of a bundled service, and continues to expand the depth and
quality of data for StatPro Revolution. In order to make the user
experience as smooth as possible, StatPro has woven together raw
data with its very large pricing library to produce further data
for risk and fixed income analysis.
Each market has different conventions and habits and StatPro
Revolution is able to cater for hundreds of methodologies to give
users the view of their portfolio to suit their specific
requirements. This is one of the ways that StatPro Revolution is a
considerable enhancement on StatPro Seven. StatPro Revolution
provides software, IT and data in a combined service that enables
StatPro to offer a significantly enhanced service.
StatPro Seven
Repeat revenue from StatPro Seven was very stable in H1 2015
with new sales largely offsetting reductions. New sales tend to
come from existing clients buying additional modules and user
licences as well as new sales of StatPro Composites.
StatPro continues to support its clients on the StatPro Seven
product, offering upgrades and maintenance. StatPro Seven provides
essential services for the Group's clients by delivering accurate
and comprehensive analysis for reporting to their clients.
Client feedback indicates that the operators of StatPro Seven
want greater control over their data giving higher confidence that
they will always publish accurate analysis. Whereas in the past,
sending out approximately correct performance numbers was common
practice, the new regulatory environment makes this unacceptable.
This in turn has led to clients expanding the use of accurate
systems like StatPro Seven to a broader range of portfolios such as
private wealth mandates. StatPro Revolution offers the crucial
solution: complete control of data and huge scale and speed
compared to StatPro Seven and other systems using older
technology.
Financial review
Revenue
Group revenue increased by 2% at constant currency to GBP15.44
million, and was 2% lower at actual rates (2014: GBP15.71 million).
93% of Group revenue in H1 2015 was recurring revenue (2014:
92%).
Contracted revenue
The forward order book of contracted revenue increased by 4% at
constant currency (1% at actual rates) to GBP37.01 million (2014 at
constant currency: GBP35.60 million).
The proportion by value of recurring revenue contracts at the
end of June 2015 secured to the end of June 2016 or beyond amounted
to 72% (2014: 75%); the weighted average length of contracts
committed remained at 16 months.
New contracted revenue
New sales of recurring contracts were up 14% to GBP2.09 million
(2014: GBP1.84 million). Professional services revenue reduced
slightly to GBP1.04 million (2014: GBP1.18 million).
Approximately 82% of new recurring contracted revenue came from
existing clients (2014: 73%).
Recurring revenue
The Group's business model of Software as a Service ("SaaS") and
recurring revenue contracts continues to provide excellent
visibility of revenue.
The annualised recurring revenue at the end of June 2015
increased by 4% over the previous 12 months at constant currency to
GBP28.62 million (2014: GBP27.54 million). The net growth rate for
StatPro Revolution was 61% over the same period (2014: 85%).
The recurring revenue for StatPro Seven before the impact of
conversions to StatPro Revolution was GBP19.86 million, less than
1% reduction at constant currency (2014: 1% reduction). After the
impact of conversions to StatPro Revolution, StatPro Seven
annualised recurring revenue reduced to GBP18.67 million (2014:
GBP20.01 million).
Revenue by segment
Revenue increased in the EMEAA region by 4% at constant currency
to GBP9.98 million (2014 at constant currency: GBP9.60 million). In
the North American region, revenue reduced by 2% at constant
currency to GBP5.46 million (2014 at constant currency: GBP5.60
million), as shown below:
Unaudited Unaudited Change
Six months Six months
to 30 to 30
June June
2015 2014
*
GBP million GBP million %
Revenue
EMEAA 9.98 9.60 4%
North America 5.46 5.60 (2%)
------------ ------------
15.44 15.20 2%
FX - 0.51
------------ ------------
Group revenue 15.44 15.71 (2%)
============ ============
* At constant currency
Revenue by service
Cloud revenues (incorporating StatPro Revolution, Risk and Data)
grew by 7% as shown in the table below:
Six months Six months Change
Revenue to to
30 June 30 June
2015 2014*
GBP million GBP million %
StatPro Revolution,
Risk and Data 5.38 5.05 7%
StatPro Seven and
non-cloud 10.06 10.15 (1%)
------------ ------------
15.44 15.20 2%
FX - 0.51
------------ ------------
Group revenue 15.44 15.71 (2%)
============ ============
* At constant currency
StatPro Revolution recurring revenue is now 23% of the Group
total (2014: 15%) and has grown at a higher rate than other
revenues as the service is developed on a highly scalable
technology platform.
The total recurring revenue from clients whose subscription,
includes StatPro Revolution, was GBP13.10 million (2014: GBP9.83
million at constant currency) representing 52% (2014: 41%) of total
software recurring revenue.
Following the decision in June 2014 to raise the minimum client
fee, the average revenue per StatPro Revolution client has
increased by 73% at constant currency to GBP21,400 (2014:
GBP12,400). The total number of clients for StatPro Revolution has
also reduced following this decision to focus on profitable client
relationships.
Revenues from StatPro Seven and non-cloud products reduced by 1%
to GBP10.06 million (2014 at constant currency: GBP10.15
million).
Operating expenses
Operating expenses (before amortisation of intangible assets)
increased by 1% (4% at constant currency) to GBP12.74 million
(2014: GBP12.57 million). The increase in expenditure related to
the investment in cloud technology, including additional employee
costs, data costs, software and communications costs and cloud
infrastructure. The average number of employees was 245 (2014:
253).
Profitability
As a result of the continued planned investment in cloud
technology, the adjusted EBITDA was lower at GBP1.73 million (2014:
GBP2.03 million).
Six months Six months Change
to 30 to 30
Adjusted EBITDA June 2015 June 2014*
GBP million GBP million %
StatPro Revolution,
Risk and Data (3.60) (3.09) (17%)
StatPro Seven and
non-cloud 5.33 4.99 7%
------------ ------------
1.73 1.90 (9%)
FX - 0.13
------------ ------------
Adjusted EBITDA 1.73 2.03 (15%)
============ ============
Adjusted EBITDA margin
StatPro Revolution,
Risk and Data (66.9%) (61.1%)
StatPro Seven and
non-cloud 52.9% 49.1%
Adjusted EBITDA margin
- total 11.2% 12.9%
------------------------- ------------ ------------ -------
* At constant currency
Gross profit margin (see note 4) for the period was 61% (2014:
62%).
SaaS-based KPIs
One of the key metrics used by SaaS businesses is to estimate
the costs of acquiring each customer (Cost of Acquiring Customers
or "CAC") and compare that with the Lifetime Value of the customer
contracts (Life Time Value or "LTV"), and the results for StatPro
are presented below. The calculations are on twelve month trailing
basis.
StatPro Revolution contracts Unaudited Unaudited Unaudited
only
Year Year to Year to
to 31 December 31 December
30 June
2015 2014 2013
Average Cost of Acquiring Customer
("CAC") (GBP'000s) 37.9 17.0 9.6
Implied Customer Lifetime (years) 16.7 11.9 8.2
Average ARR per customer (GBP'000s) 21.4 16.6 12.2
Implied Customer Lifetime Value
("LTV") (GBP'000s) 358 197 99
LTV: CAC 9.5 11.6 10.4
Generally a value of three or higher for the ratio of LTV:CAC is
considered acceptable for a successful SaaS business and for
StatPro it is currently around nine. The slight reduction over the
last six months (on a rolling 12 month comparative basis) is linked
to the decision to raise the price point for StatPro Revolution in
June 2014. This has reduced the number of new customers, increased
the average CAC and increased the overall ARR per customer.
Finance income and expense
Net finance expense was GBP0.16 million (2014: GBP0.13 million),
and is mainly the finance costs of the Group's credit facility (see
below).
Profit before tax
Adjusting for amortisation of acquired intangible assets and
share based payments, the adjusted profit before taxation was
GBP0.93 million (2014: GBP1.26 million). Currency movements reduced
adjusted profit before taxation by GBP0.10 million. Profit before
taxation was GBP0.82 million (2014: GBP1.08 million).
Taxation
The tax charge is GBP0.27 million (2014: GBP0.38 million). The
overall effective tax rate is 32% (2014: 35%). This is higher than
the prevailing UK rate mainly due to the impact of operations in
countries with higher tax rates than the UK.
Earnings per share
Adjusted earnings per share was 1.0p (2014: 1.3p). Actual and
diluted earnings per share was 0.8p (2014: 1.0p).
Interim dividend
An interim dividend of 0.85 pence per ordinary share (2014: 0.85
pence) will be paid on 4 November 2015 to shareholders on the
register at the close of business on 9 October 2015 (ex-div date
will be 8 October 2015).
Balance sheet
The Group's net assets at the period end were GBP42.49 million
(2014: GBP45.64 million). The reduction was primarily due to the
currency impact on revaluation of goodwill.
Cash flow and financing
StatPro continues to be cash generative with cash generated from
operations of GBP3.69 million (2014: GBP4.49 million), although
lower than the prior year, mainly due to lower operating profits
and lower working capital movements. The free cash flow increased
to GBP0.78 million (2014: GBP0.54 million), and the Group ended the
period with net cash of GBP2.03 million (2014: GBP3.18
million).
New financing facility - post balance sheet event
The Group has signed in July 2015 a new GBP20 million financing
facility with Wells Fargo. The key features of the facility
are:
-- Five year commitment period to July 2020
-- GBP10 million committed revolving credit facility
-- GBP10 million uncommitted additional facility available for
acquisitions, share buy backs and general corporate purposes
The primary financial covenants are linked to recurring revenue
and adjusted EBITDA while allowing the Group to invest for growth.
The financing costs of approximately GBP0.4 million will be
amortised over the five year term.
This new facility strengthens the Group's long-term financial
structure.
Research and development and capex
The research and development team is now focused solely on the
Group's cloud-based solutions, the StatPro Revolution platform.
R&D expenditure increased overall by 11% to GBP2.55 million as
planned (2014: GBP2.30 million), equating to 17% of Group revenue
(2014: 15%).
Included within investment in intangible assets are capitalised
development costs of GBP1.67 million (2014: GBP1.80 million) and
amortisation on internal development was GBP1.57 million (2014:
GBP1.67 million).
Capital expenditure on property, plant and equipment was GBP0.51
million (2014: GBP1.19 million); this was lower than the prior
year, which included a number of office relocation projects.
Principal risks and uncertainties
The directors continue to evaluate the principal business risks
and uncertainties affecting the Group and further discussion of the
principal risks and uncertainties can be found on pages 25 to 27 of
the 2014 Annual Report.
Group Income Statement
For the six months ended 30 June 2015
Notes Unaudited Unaudited Audited
Six months Six months Year to
to to 31 December
30 June 30 June
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Revenue 15,444 15,709 32,018
Operating expenses before amortisation
of intangible assets and exceptional
items (12,741) (12,574) (25,529)
Amortisation of acquired intangible
assets (32) (94) (188)
Amortisation of other intangible
assets (1,688) (1,825) (3,640)
-------------------------------------------- ------ ----------- ----------- -------------
Operating expenses (14,461) (14,493) (29,357)
----------- ----------- -------------
Operating profit 983 1,216 2,661
Finance income 5 8 12
Finance expense (167) (142) (303)
Net finance expense (162) (134) (291)
----------- ----------- -------------
Profit before taxation 821 1,082 2,370
Taxation (266) (384) (774)
----------- ----------- -------------
Profit for the period 555 698 1,596
=========== =========== =============
Earnings per share - basic 2 0.8p 1.0p 2.4p
- diluted 2 0.8p 1.0p 2.4p
Group Statement of Comprehensive Income
For the six months ended 30 June 2015
Unaudited Unaudited Audited
Six months Six months Year to
to to 31 December
30 June 30 June
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Profit for the period 555 698 1,596
Other comprehensive income to be reclassified
to the income statement:
Net exchange differences (2,504) (747) (946)
Total comprehensive (loss)/income for
the period (1,949) (49) 650
=========== =========== =============
Group Balance Sheet
At 30 June 2015
Notes Unaudited Unaudited Audited
At 30 At 30 At 31 December
June June
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Non-current assets
Goodwill 9 43,644 46,737 46,724
Other intangible assets 9 5,788 5,885 5,822
Property, plant and equipment 2,375 2,498 2,470
Other receivables 101 145 109
Deferred tax assets 1,138 535 988
---------- ---------- ---------------
53,046 55,800 56,113
Current assets
Trade and other receivables 6,607 6,468 7,722
Financial instruments - other 58 26 27
Current tax assets - 11 -
Cash and cash equivalents 2,192 3,193 2,692
---------- ---------- ---------------
8,857 9,698 10,441
Liabilities
Current liabilities
Financial liabilities - borrowings (63) (12) (12)
Financial instruments - other (8) - (15)
Trade and other payables (4,942) (4,510) (6,088)
Current tax liabilities (608) (398) (828)
Deferred income (12,323) (13,179) (12,603)
Provisions 10 (705) (769) (725)
(18,649) (18,868) (20,271)
---------- ---------- ---------------
Net current liabilities (9,792) (9,170) (9,830)
---------- ---------- ---------------
Non-current liabilities
Financial liabilities - borrowings (102) - -
Other creditors (60) (129) (76)
Deferred tax liabilities (503) (644) (449)
Deferred income (101) (94) (60)
Provisions - (120) (13)
---------- ---------- ---------------
(766) (987) (598)
---------- ---------- ---------------
Net assets 42,488 45,643 45,685
========== ========== ===============
Shareholders' equity
Share capital 11 678 677 677
Share premium 23,537 23,472 23,474
Shares to be issued 63 63 63
Treasury shares 11 (249) (249) (249)
Other reserves 4,200 6,903 6,704
Retained earnings 14,259 14,777 15,016
---------- ---------- ---------------
Total shareholders' equity 42,488 45,643 45,685
========== ========== ===============
Group Statement of Cash Flows
For the six months ended 30 June 2015
Unaudited Unaudited Audited
Notes Six months Six months Year to
to to 31 December
30 June 30 June
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Operating activities
Cash generated from operations 6 3,690 4,492 7,705
Finance income 5 8 12
Finance costs (25) (8) (22)
Tax received - 79 -
Tax paid (669) (626) (1,173)
----------- ----------- -------------
Net cash flow from operating activities 3,001 3,945 6,522
----------- ----------- -------------
Investing activities
Investment in intangible assets (1,708) (2,209) (4,053)
Purchase of property, plant and equipment (513) (1,192) (1,863)
Proceeds from the disposal of property,
plant and equipment - 5 12
----------- ----------- -------------
Net cash flow used in investing activities (2,221) (3,396) (5,904)
----------- ----------- -------------
Financing activities
Proceeds from issue of ordinary shares 64 - 2
Net proceeds from finance leases 153 - -
Dividends paid to shareholders (1,386) (1,316) (1,889)
----------- ----------- -------------
Net cash flow used in financing activities (1,169) (1,316) (1,887)
----------- ----------- -------------
Net decrease in cash and cash equivalents (389) (767) (1,269)
----------- ----------- -------------
Cash and cash equivalents at start
of period 2,692 4,014 4,014
Effect of exchange rate movements (111) (54) (53)
----------- ----------- -------------
Cash and cash equivalents at end
of period 2,192 3,193 2,692
----------- ----------- -------------
Group Statement of Changes in Shareholders' Equity
For the six months ended 30 June 2015
Shares Other
Share Share to be Treasury reserves Retained Total
Unaudited capital premium issued shares * earnings equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
At 1 January 2014 677 23,472 63 (249) 7,650 15,295 46,908
--------- --------- --------- --------- ---------- ---------- ---------
Profit for the period - - - - - 698 698
Other comprehensive
income - - - - (747) - (747)
Total comprehensive
income - - - - (747) 698 (49)
--------- --------- --------- --------- ---------- ---------- ---------
Transactions with
owners:
Share based payment
transactions - - - - - 88 88
Tax relating to share
option scheme - - - - - 12 12
Dividends - - - - - (1,316) (1,316)
---------- ---------
At 30 June 2014 677 23,472 63 (249) 6,903 14,777 45,643
--------- --------- --------- --------- ---------- ---------- ---------
Shares Other
Share Share to be Treasury reserves Retained Total
Unaudited capital premium issued shares * earnings equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
At 1 January 2015 677 23,474 63 (249) 6,704 15,016 45,685
--------- --------- --------- --------- ---------- ---------- ---------
Profit for the period - - - - - 555 555
Other comprehensive
income - - - - (2,504) - (2,504)
Total comprehensive
income - - - - (2,504) 555 (1,949)
--------- --------- --------- --------- ---------- ---------- ---------
Transactions with
owners:
Share based payment
transactions - - - - - 77 77
Tax relating to share
option scheme - - - - - (3) (3)
Shares issued 1 63 - - - - 64
Dividends - - - - - (1,386) (1,386)
--------- --------- --------- --------- ---------- ---------- ---------
At 30 June 2015 678 23,537 63 (249) 4,200 14,259 42,488
--------- --------- --------- --------- ---------- ---------- ---------
* Other reserves includes a merger reserve of GBP2,369,000
(2014: GBP2,369,000) and a translation reserve surplus of
GBP1,831,000 (2014: GBP4,534,000). The merger reserve arose on
acquisitions and represents the difference between the fair value
and the nominal value of the shares issued. The translation reserve
incorporates the gains and losses on revaluation of the net assets
and liabilities of subsidiary undertakings and other currency gains
and losses that are presented in equity.
Notes to the interim financial information
For the six months ended 30 June 2015
1. This interim report was approved by the Board of directors on
4 August 2015. The financial information set out in this interim
report has been prepared under IFRS as adopted by the European
Union and on the basis of the accounting policies set out in the
statutory accounts of StatPro Group plc for the year ended 31
December 2014, amended as explained below. The following new IFRIC
interpretation is mandatory for the first time in the current
period and has no significant impact on the Group consolidated
results or financial position.
International Accounting Standards ("IAS/IFRS")
IFRIC 21 Levies
This report is not prepared in accordance with IAS 34, which is
not mandatory. This interim report has not been audited but has
been reviewed in accordance with ISRE 2410 by the Company's
auditors, Ernst & Young LLP. The financial information does not
constitute statutory accounts within the meaning of section 435 of
the Companies Act 2006. Statutory accounts for StatPro Group plc
for the year ended 31 December 2014 reported under IFRS have been
delivered to the Registrar of Companies. The auditors' report on
those accounts was unqualified, did not draw attention to any
matters by way of emphasis and did not contain a statement under
Section 498 (2) or (3) of the Companies Act 2006. Copies of this
report will be posted or provided electronically to shareholders.
Further copies are available free of charge on request from the
Company Secretary at the Company's registered office, Mansel Court,
Mansel Road, London SW19 4AA.
Basis of preparation - going concern
After making appropriate enquiries, the directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. For
these reasons, the Board continues to adopt the going concern basis
in preparing the interim report.
2. Earnings per share
Basic earnings per share has been calculated based on the profit
after taxation of GBP0.56 million (2014: GBP0.70 million) and the
weighted average number of shares of 67.55 million (2014: 67.48
million). The diluted earnings per share were 0.8p (2014: 1.0p)
based on potentially dilutive shares outstanding of 0.39 million
(2014: 0.07 million).
Weighted Weighted
average Earnings average Earnings
number per number per
Earnings of shares share Earnings of shares share
Six Six Six Six Six Six
months months months months months months
to 30 to 30 to 30 to 30 to 30 to 30
June June June June June June
2015 2015 2015 2014 2014 2014
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
GBP'000s '000s pence GBP'000s '000s pence
Earnings per share
- basic 555 67,548 0.8 698 67,479 1.0
Potentially dilutive
shares - 389 (0.0) - 67 (0.0)
---------- ----------- ---------- ---------- ----------- ----------
Earnings per share
- diluted 555 67,937 0.8 698 67,546 1.0
========== =========== ========== ========== =========== ==========
Adjusted earnings per share are shown in the table below.
Weighted Weighted
average average Earnings
number Earnings number per
Earnings of shares per share Earnings of shares share
Six months Six months Six months Six Six Six
to 30 to 30 to 30 months months months
June June June to 30 to 30 to 30
June June June
2015 2015 2015 2014 2014 2014
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
GBP'000s '000s pence GBP'000s '000s pence
Earnings per share - basic 555 67,548 0.8 698 67,479 1.0
Add back: amortisation
of acquired intangibles 32 - 0.1 94 - 0.2
Add back: share based
payments 77 - 0.1 88 - 0.1
----------- ----------- ----------- ---------- ----------- ----------
Adjusted earnings per
share 664 67,548 1.0 880 67,479 1.3
Potentially dilutive shares - 389 (0.0) - 67 (0.0)
----------- ---------- ----------- ----------
Adjusted earnings per
share - diluted 664 67,937 1.0 880 67,546 1.3
=========== =========== =========== ========== =========== ==========
3. Revenue analysis
Revenue for the period is analysed as follows:
Unaudited Unaudited Audited
Six months Six months Year to
to 30 to 30 31 December
June June
2015 2014 2014
GBP'000s GBP'000s GBP'000s
EMEAA 9,983 10,157 20,820
North America 5,461 5,552 11,198
Total 15,444 15,709 32,018
=========== =========== =============
Revenue increased in the EMEAA region by 4% at constant currency
to GBP9.98 million (2014 at constant currency: GBP9.60 million). In
the North American region, revenue reduced by 2% at constant
currency to GBP5.46 million (2014 at constant currency: GBP5.60
million).
The movement in recurring revenue in the period was as
follows:
Annualised Recurring Revenue 2015 2014
GBP million GBP million
At 31 December 2014 29.39 28.72
Net impact of exchange rates (1.30) (0.80)
At 1 January 2015 (at 30 June
2015 rates) 28.09 27.92
New contracted revenue 2.09 1.84
Cancellations/reductions (1.56) (1.36)
Net increase 0.53 0.48
At 30 June 2015 28.62 28.40
-------------------------------- ------------ ------------
Revenue by type of service was as follows:
Six months Six months Year to
to to
30 June 30 June 31 December
2015 2014 2014
GBP million GBP million GBP million
Revenue
Software licences - StatPro Seven 10.27 10.92 21.65
Software licences - StatPro Revolution 2.45 1.70 3.66
------------ ------------ ------------
Software licences - total 12.72 12.62 25.31
Data fees 1.68 1.91 3.95
------------ ------------ ------------
Total recurring revenue 14.40 14.53 29.26
Professional services and other revenue 1.04 1.18 2.76
------------ ------------ ------------
Total revenue 15.44 15.71 32.02
============ ============ ============
The Annualised Recurring Revenue profile of StatPro Revolution
clients was as follows:
StatPro Revolution Annualised Number Average Annualised Number Average
revenue of clients revenue revenue* of clients revenue
per client per client
*
Annualised revenue June June June June June June
bands 2015 2015 2015 2014 2014 2014
GBP'000s Number GBP'000s GBP'000s Number GBP'000s
<GBP2k 109 101 1.1 165 155 1.1
GBP2k - GBP10k 394 87 4.5 403 99 4.1
GBP10k-GBP50k 1,585 72 22.0 1,046 44 23.8
GBP50k-GBP100k 2,111 30 70.4 1,206 17 70.9
>GBP100k 2,269 12 189.1 1,188 7 169.7
----------- ------------ ----------- ------------
Total 6,468 302 21.4 4,008 322 12.4
-------------------- ----------- ------------ ------------ ----------- ------------ ------------
* at constant currency
4. Adjusted profit before taxation, adjusted operating profit,
adjusted EBITDA and gross margin analysis
a) Adjusted profit before taxation
Unaudited Unaudited Audited
Six months Six months Year to
to to 31 December
30 June 30 June
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Profit before taxation 821 1,082 2,370
Add back: Amortisation on acquired intangible
assets 32 94 188
Add back: Share based payments 77 88 26
----------- ----------- -------------
Adjusted profit before tax 930 1,264 2,584
=========== =========== =============
b) Adjusted operating profit
` Unaudited Unaudited Audited
Six months Six months Year to
to to 31 December
30 June 30 June
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Operating profit 983 1,216 2,661
Add back: Amortisation on acquired intangible
assets 32 94 188
Add back: Share based payments 77 88 26
----------- ----------- -------------
Adjusted operating profit 1,092 1,398 2,875
=========== =========== =============
c) Adjusted EBITDA
Unaudited Unaudited Audited
Six months Six months Year to
to to 31 December
30 June 30 June
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Operating profit 983 1,216 2,661
Add back: Depreciation of property, plant
and equipment 517 479 1,192
Add back: Amortisation on purchased intangible
assets 117 152 292
Add back: Amortisation on acquired intangible
assets 32 94 188
Add back: Share based payments 77 88 26
----------- ----------- -------------
Adjusted EBITDA 1,726 2,029 4,359
=========== =========== =============
Adjusted EBITDA margin 11.2% 12.9% 13.6%
d) Gross profit margin analysis
Gross profit margin analysis helps us assess the profitably of
incremental revenue as the business evolves into a pure cloud
business and the costs drivers begin to change. As there are a
number of methodologies for allocating costs, we have described how
we have allocated the cost elements. The cloud segment currently
has a lower margin than the non-cloud part given the investment
that is being undertaken, however, the Board's view is that, as the
business grows, the inherent scalability of cloud technology will
lead to greater profitability in the future.
Unaudited Unaudited Unaudited
Six months Six months Year to
to to 31 December
30 June 30 June
2015 2014 2014
% % %
Revenue 100.0% 100.0% 100.0%
Cost of services (38.9%) (38.0%) (38.1%)
----------- ----------- -------------
Gross profit margin 61.1% 62.0% 61.9%
R&D costs (5.1%) (4.7%) (4.6%)
Sales & Marketing
costs (11.9%) (12.2%) (11.0%)
General & Administration
costs (33.4%) (32.8%) (32.8%)
----------- ----------- -------------
(50.4%) (49.7%) (48.4%)
Share based payments 0.5% 0.6% 0.1%
----------- ----------- -------------
Adjusted EBITDA 11.2% 12.9% 13.6%
=========== =========== =============
Definition of cost category for gross margin analysis:
Cost of services includes Clients Services employee salaries,
Data employee salaries, Development employee salaries related to
support, contractors costs, data costs, costs of software and
hardware maintenance.
R&D includes the element of Development employee salaries
that relates to new research and development.
Sales & marketing includes Sales and Marketing employee
salaries, external marketing costs and sales commissions.
General & administration includes the Finance, HR and IT
employee salaries, communications costs, occupancy costs,
professional fees, travel and expenses, and other costs.
5. Free cash flow
Unaudited Unaudited Audited
Six months Six months Year
to 30 to 30 to
June June 31 December
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Cash generated from operations 3,690 4,492 7,705
Net interest paid (20) - (10)
Net tax paid (669) (547) (1,173)
Purchase of property, plant and equipment (513) (1,192) (1,863)
Investment in intangible assets (1,708) (2,209) (4,053)
----------- ----------- -------------
Free cash flow 780 544 606
=========== =========== =============
6. Reconciliation of profit before tax to net cash inflow from operating activities
Unaudited Unaudited Audited
Six months Year to
to 30 Six months 31
June to 30 June December
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Profit before taxation 821 1,082 2,370
Net finance expense 162 134 291
----------- ------------ ----------
Operating profit 983 1,216 2,661
Depreciation of property, plant and
equipment 517 479 1,192
Loss on disposal of property, plant
and equipment - 53 42
Amortisation of intangible assets 1,720 1,919 3,828
Decrease/(increase) in receivables 1,058 (305) (1,597)
(Decrease)/increase in payables and
provisions (961) 174 1,364
Increase in deferred income 296 868 189
Share based payments 77 88 26
----------- ------------ ----------
Net cash inflow from operating activities 3,690 4,492 7,705
=========== ============ ==========
7. Reconciliation of net cash flow to movement in net cash
Unaudited Unaudited Audited
Six months Six months Year
to 30 to 30 June to
June 31 December
2015 2014 2014
GBP'000s GBP'000s GBP'000s
Decrease in cash and cash equivalents
in the period (389) (767) (1,269)
Movement on finance leases (153) - -
Exchange movements (111) (54) (53)
----------- ------------ -------------
Movement in net cash (653) (821) (1,322)
Net cash at beginning of period 2,680 4,002 4,002
Net cash at end of period 2,027 3,181 2,680
=========== ============ =============
8. Dividend
An interim dividend for 2015 of 0.85 pence per Ordinary Share
(2014: 0.85 pence) will be paid on 4 November 2015 to shareholders
on the register on 9 October 2015. A final dividend for 2014 of
2.05 pence per ordinary share was paid on 27 May 2015.
9. Goodwill and other intangible assets
The decrease in goodwill since 31 December 2014 of GBP3.08
million relates to exchange losses on revaluation of goodwill
denominated in foreign currencies. Other intangible assets comprise
internally generated development costs capitalised, acquired
intangible assets (client contracts) and purchased intangible
assets.
10. Provisions
Provisions of GBP0.71 million at 30 June 2015 (2014: GBP0.89
million) relates to deferred contingent consideration for the
acquisition of the non-controlling interest in SiSoft Sarl and
onerous contracts.
11. Share capital and treasury shares
106,000 shares were issued during the period (2014: nil). At 30
June 2015, there were 67,813,650 shares (Dec 2014: 67,707,650
shares) in issue including 225,000 (2014: 225,000) held in treasury
(67,588,650 excluding treasury shares). The treasury shares do not
accrue dividends and are excluded from the earnings per share
calculation.
12. Post balance sheet event - New financing facility
The Group has signed in July 2015 a new GBP20 million financing
facility with Wells Fargo. The key features of the facility
are:
-- Five year commitment period to July 2020
-- GBP10 million committed revolving credit facility
-- GBP10 million uncommitted additional facility available for
acquisitions, share buy backs and general corporate purposes
The primary financial covenants are linked to recurring revenue
level and EBITDA while allowing the Group to invest for growth. The
financing costs of approximately GBP0.4 million will be amortised
over the five-year term.
This new facility strengthens the Group's long-term financial
structure.
Independent review report to StatPro Group plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2015, which comprises the Group Income
Statement, Group Statement of Comprehensive Income, Group Balance
Sheet, Group Statement of Cash Flows, Group Statement of Changes in
Shareholders' Equity and the related notes 1 to 12. We have read
the other information contained in the half yearly financial report
and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the Interim Report in accordance with the AIM Rules
issued by the London Stock Exchange which require that it is
presented and prepared in a form consistent with that which will be
adopted in the Company's annual accounts having regard to the
accounting standards applicable to such annual accounts.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRS's as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with the AIM Rules issued by the London Stock
Exchange.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2015 is not prepared, in all material respects, in accordance
with the accounting policies outlined in Note 1, which comply with
IFRS's as adopted by the European Union and in accordance with the
AIM Rules issued by the London Stock Exchange.
Ernst & Young LLP
London
4 August 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PKQDDCBKDOFK
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