TIDMSOG
RNS Number : 4751R
StatPro Group PLC
09 March 2016
9 March 2016
StatPro Group plc
StatPro Revolution annualised recurring revenue up 46%
StatPro Group plc, ("StatPro", "the Group", AIM:SOG), the AIM
listed provider of cloud-based portfolio analysis and asset pricing
services for the global asset management industry, today announces
its unaudited preliminary results for the year ended 31 December
2015.
2015 2014 Change Constant
currency
GBP30.19 GBP32.02
Revenue m m (6%) (1%)
Annualised Recurring GBP28.70 GBP29.39
Revenue (1) m m (2%) 1%
GBP2.41 GBP2.37
Profit before tax m m 2% 14%
GBP4.04 GBP4.36
Adjusted EBITDA (2) m m (7%) 1%
Earnings per share
- basic 2.4p 2.4p -
- adjusted (2) 2.6p 2.7p (4%)
Dividend per share
- total for year 2.9p 2.9p -
----------------------------------------------- --------- --------- ------- ----------
Financial highlights:
-- Group Annualised Recurring Revenue ("ARR") (1) increased to
GBP28.70 million (2014 at constant currency:
GBP28.33 million)
-- StatPro Revolution ARR (1) up 46% (4) to GBP7.80 million
(2014 at constant currency: GBP5.35 million)
-- Forward order book of contracted revenue (3) for StatPro
Revolution increased by 57% to GBP14.66 million (2014 at constant
currency: GBP9.31 million)
-- Recurring revenue from StatPro's cloud services accounts for
27% of Group ARR (2014: 18%) and 34% on
pro forma basis following Q1 2016 acquisitions
-- Adjusted EBITDA (2) up to GBP4.04 million (4) (2014 at constant currency: GBP4.02 million)
-- Full year dividend maintained at 2.9 pence per share
Operating highlights:
-- Advanced risk analysis features released in 2015 allowing
StatPro Seven Risk clients to begin migrating to
StatPro Revolution
-- Average annualised revenue from StatPro Revolution clients
increased 67% to GBP28,300 (2014: GBP17,000 (4) )
-- StatPro Revolution Performance module is on track for release in summer 2016
-- Signed new five year banking facility with Wells Fargo,
increased in January 2016 to approximately GBP24.5
million
Acquisitions in Q1 2016:
-- US based, Investor Analytics, leading cloud-based complementary risk solution business
-- 51% shareholding in South African InfoVest Consulting,
software business specialising in data warehouse,
ETL (Extract, Transform and Load) and reporting solutions
(1) Annualised Recurring Revenue is the annual value of revenue
contractually committed at year 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 5 and
7).
(3) Forward order book of StatPro Revolution contracted revenue
is the total amount of software and professional services revenue
that is contractually committed at year end including conversions
from StatPro Seven.
(4) At constant currency.
Justin Wheatley, Chief Executive of StatPro, commented:
"In 2015, we achieved our core objective of growing StatPro
Revolution's ARR by 46%. We are now close to the end of our major
investment cycle in new technology with the launch of our last
performance product module this summer.
"Our early investment in cloud technology, over eight years ago,
has positioned us as a leading innovator in the rapidly digitising
asset management industry. Indeed, StatPro Revolution is the first
entirely new full analytics platform developed in our market over
the last 10 years.
"With the acquisition of Investor Analytics, we are now able to
offer a complete suite of risk models for any asset manager. The
acquisition has also increased our cloud-based ARR to 34% of the
total ARR.
"Our forward order book is now at GBP36.6 million and the
current financial year has started well. We look forward to
improving the Group's profitability by a combination of both
organic and acquisitive growth."
- Ends -
Enquiries:
StatPro Group plc
Justin Wheatley, Chief +44 (0) 20 8410
Executive 9876
Andrew Fabian, Finance
Director
Panmure Gordon - Nomad
and Broker
Corporate Finance - Freddy
Crossley / Fred Walsh / +44 (0) 20 7886
Fabien Holler 2500
Corporate Broking - Tom
Salvesen
Instinctif Partners
Adrian Duffield / Lauren +44 (0) 20 7457
Foster 2020
A briefing for analysts on the results will be held at 11.00am
today at the offices of
Instinctif Partners, 65 Gresham Street, London, EC2V 7NQ
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 GBP32 million today (including
Investor Analytics and InfoVest acquisitions in 2016 on a pro forma
basis). The Group has operations in Europe, North America, South
Africa, Asia and Australia, with hundreds of clients in 38
countries around the world. Approximately 80% of recurring revenues
are generated outside the UK. StatPro Group plc shares are listed
on AIM.
Overview
In 2015, the Group built upon the inflexion point reached in
2014, with Annualised Recurring Revenues ("ARR") for StatPro
Revolution reaching GBP7.8 million, up from GBP5.4 million (in
constant currency) and was 27% of total Group ARR (2014:18%).
With the addition of Investor Analytics ("IA") in January 2016,
StatPro's cloud services amount to GBP11.1 million and represent
34% of ARR on a pro-forma basis.
Importantly, key measures of StatPro Revolution performance were
very strong in 2015. ARR increased by 46% (2014: 68%), the order
book grew by 57% (2014: 70%) and the average revenue per client
grew 67% (2014: 36%).
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"). StatPro's LTV/CAC ratio rose
to 16.1 (2014: 11.3).
StatPro revenues were GBP30.19 million in 2015 (2014: GBP32.02
million). As expected, professional services revenue was lower in
2015 at GBP1.64 million (2014: GBP2.76 million) reflecting the
lower cost of implementing StatPro Revolution for its clients.
Whilst revenue from services was lower, the Group generated more
sales of recurring revenue.
During 2015, sterling's strength reduced Group revenues by about
5% versus 2014, which impacted the Group's profit. Following the
acquisition of IA, about 18% of the Group's ARR is sterling-based
and about 36% is US dollar-based, on a pro-forma basis.
The Board is recommending that the full year dividend is
maintained at 2.9p per share (2014: 2.9p).
Strategy
Having positioned StatPro early as a true cloud-based service,
the Group has developed a significant commercial advantage in its
market. It is not possible to repurpose traditional software as a
multi-tenant software service nor is it easy to build the vast
range of functionality from scratch to meet the needs of the
increasingly demanding asset management industry.
The Group's collective knowledge across many markets in multiple
analytics disciplines has helped build a very broad range of highly
sophisticated analytics, designed to suit the needs of all types of
asset managers across all the major markets.
Over the last 20 years, the requirements of the asset management
industry have expanded hugely, significantly increasing the cost of
doing business whilst at the same time increased competition has
applied pressure on fee income.
This combination of anticipating the market dynamics and
positioning the Group's products to offer the most productive and
efficient services to its clients has always been the focus. In
common with many rapidly maturing markets, the cost of entering the
performance and risk analytics market is growing. StatPro believes
that it has a sustainable technology lead in its market and is
benefitting from its early investment, which has helped provide
enhanced functionality for its clients.
As part of the Group's strategy, StatPro also anticipates that
it will make further acquisitions. Having created StatPro
Revolution as the upgrade for StatPro Seven, StatPro Revolution
could also be the upgrade for a number of other products in the
market. The investment cost of moving to the next generation of
technology is now so high that it makes more sense for some
companies to sell their valuable client base rather than take the
development and investment risk.
Current trading and outlook
(MORE TO FOLLOW) Dow Jones Newswires
March 09, 2016 02:01 ET (07:01 GMT)
The Group's forward order book is now GBP36.6 million, of which
GBP14.7 million is from StatPro Revolution. Trading in 2016 has
started well and the Group expects another year of good growth in
sales of StatPro Revolution.
With the forthcoming release of StatPro Revolution Performance,
StatPro will continue the process of moving its many clients of
StatPro Seven onto StatPro Revolution.
As the Group moves closer towards becoming a business with the
majority of its revenues derived from the cloud, StatPro
anticipates that its operating margins and cash generation will
improve.
Operational review
StatPro Revolution is sold on a per portfolio basis with four
service levels (Platinum, Gold, Silver and Bronze). Upsells of
additional portfolios or higher service levels require little or no
implementation, demonstrate that the client is happy with the
service and improve the marginal profitability of each client.
Upsells to existing StatPro Revolution clients represented 44% of
new StatPro Revolution sales.
In 2015, the Group migrated all the functionality of the StatPro
Seven Risk Management Module (SRM) to StatPro Revolution to create
the Advanced Risk Management module (ARM) and added some
significant new functionality not available in SRM. As a result,
the Group anticipates moving most of its SRM clients to StatPro
Revolution during the course of 2016.
The acquisition of IA will enhance this move as the Group
expects that many of its existing clients will see the combination
of IA and ARM as one of the most complete risk services available
in the market.
During 2016, StatPro will release StatPro Revolution
Performance. This is the core module that manages transaction-based
performance and enables the complete conversion of all its StatPro
Seven clients to StatPro Revolution. The unique capabilities of
StatPro Revolution Performance are its unprecedented scalability
and speed as well as the rich data management facilities.
The release of StatPro Revolution Performance will mark the end
of an eight-year investment process to redevelop all the Group's
performance and risk capabilities in the new technology of the
cloud. As a result, whilst there will always be a need to innovate,
StatPro anticipates that its development costs as a percentage of
revenues will begin to reduce over time.
Development in 2015 was focused on delivering the Advanced Risk
Management module to enable the conversion of its SRM clients to
StatPro Revolution. The Group also added significant functionality
to its Compliance module for AIFMD and UCITS IV. StatPro will add
IA to this risk platform during 2016 and in the process create one
of the most complete and cost effective risk solutions available
today in the market. This will make risk one of StatPro's key sales
themes for 2016.
In addition, StatPro has also been working on the high
performance Hadoop (R) platform for StatPro Revolution. This new
platform will enable the Group to calculate performance and risk
for the largest of portfolios in much the same time as StatPro does
for smaller portfolios thanks to parallel processing using the
"map-reduce" process. This new calculation platform will be the
basis of the benchmark management and fixed income attribution
modules. StatPro expects to see significant improvement in
calculation times as a result.
StatPro Revolution Performance remains on track to be released
to clients in the second half of the year. The Group has a number
of clients that are working with it integrating their data to test
the system. These tests are going well and the Group expects to be
engaged in a number of projects to implement StatPro Revolution
Performance as soon as it is released.
Financial review
Revenue
Group revenue decreased by 6% at actual rates to GBP30.19
million (2014: GBP32.02 million), although at constant currency the
reduction was 1%. Growth of 64% in revenue from StatPro Revolution
(at constant currency) was offset by reductions in revenue from
StatPro Seven, data, and professional services.
Contracted revenue
The forward order book of contracted revenue for StatPro
Revolution increased by 57% to GBP14.66 million (2014 at constant
currency: GBP9.31 million). The total forward order book of
contracted revenue was GBP36.57 million at 31 December 2015 (2014
at constant currency: GBP36.91 million). The proportion by value of
recurring software licences and data clients at the end of 2015
secured to the end of 2016 or beyond amounted to 71% (2014: 77%);
the weighted average length of contracts committed remained
unchanged at 16 months.
New contracted revenue
New sales of recurring contracts were up 7% to GBP4.13 million
(2014: GBP3.87 million). Professional services revenue was lower
than prior year at GBP1.64 million (2014: GBP2.60 million at
constant currency) reflecting the lower cost of implementing
StatPro Revolution for its clients. Approximately 85% of new
recurring contracted revenue came from existing clients (2014:
78%).
Recurring revenue
The Group's business model of Software as a Service ("SaaS")
recurring revenue contracts continues to provide excellent
visibility of revenue. The ARR from software licences and data fees
at the end of December 2015 increased by 1% to GBP28.70 million
(2014: GBP28.33 million at constant currency). The net growth rate
for StatPro Revolution ARR was 46% (2014: 68%).
StatPro Seven annualised recurring revenue was resilient with a
net cancellation rate (at constant currency and excluding the
impact of conversions to StatPro Revolution of GBP1.56 million) of
3% (2014: nil). With the impact of conversions to StatPro
Revolution, the ARR for StatPro Seven reduced to GBP17.41 million
(2014: GBP19.52 million).
The ARR for Data (including overage) increased by 1% at constant
currency to GBP3.49 million (2014: GBP3.46 million).
Revenue by region
Revenue increased in the EMEAA region by 1% to GBP19.80 million
(2014 at constant currency: GBP19.59 million). In the North
American region, revenue decreased by 5% to GBP10.39 million (2014
at constant currency: GBP10.93 million), as shown below.
Revenue by region 2015 2014* Change
GBP million GBP %
million
EMEAA 19.80 19.59 1%
North America 10.39 10.93 (5%)
------------ ---------
30.19 30.52 (1%)
FX - 1.50
------------ ---------
Group revenue 30.19 32.02 (6%)
============ =========
* At constant currency
Revenue by service
Cloud revenues (incorporating StatPro Revolution, Risk and Data)
grew by 9% as shown in the table below:
Revenue by service 2015 2014* Change
GBP million GBP %
million
StatPro Revolution and
cloud-related 11.43 10.52 9%
StatPro Seven and non-cloud-related 18.76 20.00 (6%)
------------ ---------
30.19 30.52 (1%)
FX - 1.50
------------ ---------
Group revenue 30.19 32.02 (6%)
============ =========
* At constant currency
StatPro Revolution revenue
StatPro Revolution recurring revenue made up 27% of the Group
total (2014: 18%) and has grown at a higher rate than other
revenues as the service is developed on a highly scalable
technology platform. On a pro-forma basis, the Group's cloud
revenues are now 34% of total Group revenues, taking into account
the two acquisitions in early 2016.
The total recurring revenue from clients whose subscription
includes StatPro Revolution was GBP14.11 million (2014: GBP11.65
million) representing 56% (2014: 46%) of total software recurring
revenue.
StatPro continues to focus on increasing the average revenue per
client. This resulted in losing some lower value contracts whilst
overall the average revenue per StatPro Revolution client in 2015
increased by 67% (2014: 37%).
Operating expenses
Operating expenses (before amortisation of intangible assets and
exceptional items) reduced by 7% (3% at constant currency) to
GBP23.72 million (2014: GBP25.53 million). Whilst the business
continues to invest, the Group benefitted from cost efficiencies
and internal streamlining of processes the Group had implemented in
2014. The average number of employees reduced to 242 (2014:
251).
Profitability
The adjusted EBITDA was down 7% at actual rates but up 1% at
constant currency to GBP4.04 million (2014: GBP4.02 million at
constant currency).
Adjusted EBITDA
2015 2014* Change
GBP million GBP million %
StatPro Revolution and
cloud-related (5.87) (6.07) 3%
StatPro Seven and non-cloud-related 9.91 10.09 (2%)
------------ ------------
4.04 4.02 1%
FX - 0.34
------------ ------------
Adjusted EBITDA 4.04 4.36 (7%)
============ ============
Adjusted EBITDA margin
StatPro Revolution and
cloud-related (51.3%) (57.7%)
StatPro Seven and non-cloud-related 52.8% 50.5%
Adjusted EBITDA margin
- total 13.4% 13.2%
(MORE TO FOLLOW) Dow Jones Newswires
March 09, 2016 02:01 ET (07:01 GMT)
-------------------------------------- ------------ ------------ -------
* At constant currency
Gross profit margin (see note 5) 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.
StatPro Revolution contracts
only
2015 2014 2013
Average Cost of Acquiring
Customer ("CAC") (GBP'000s) 26.0 17.3 9.7
Implied Customer Lifetime
(years) 14.8 11.5 8.1
Average ARR per customer
(GBP'000s) 28.3 17.0 12.5
Implied Customer Lifetime
Value ("LTV") (GBP'000s) 418 196 101
LTV: CAC 16.1 11.3 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 16. The Cost of Acquiring Customers
has increased as the Group is focusing on larger contract values,
Implied Customer Lifetime has increased due to lower cancellation
rates and therefore the Customer Lifetime Value has also increased
significantly in the last two years by over 300%.
Finance income and expense
Net finance expense was GBP0.29 million (2014: GBP0.29 million),
and is mainly due to the finance costs of the Group's credit
facility.
Profit before tax
The impact of currency movements resulted in a reduced adjusted
profit before taxation by GBP0.17 million. Profit before taxation
at constant currency was 14% higher at GBP2.41 million (2014:
GBP2.11 million at constant currency) and up 2% at actual rates.
Adjusting for amortisation of acquired intangible assets and share
based payments, the adjusted profit before taxation was GBP2.56
million (2014: GBP2.58 million).
Taxation
The tax charge was GBP0.79 million (2014: GBP0.77 million). The
overall effective tax rate was 33% (2014: 33%). 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 2.6p (2014: 2.7p). Actual and
diluted earnings per share was 2.4p (2014: 2.4p).
Dividends
The Directors are recommending maintaining the final dividend of
2.05p per share (2014: 2.05p) making a total dividend for 2015 of
2.9p per share (2014: 2.9p). The final dividend will be paid on 25
May 2016 to all shareholders on the register at the close of
business on 29 April 2016. Total dividends paid in 2015 amounted to
GBP1.96 million (2014: GBP1.89 million). The dividend cover
(calculated as adjusted eps: dividends per share) was 0.90 times
(2014: 0.93).
Balance sheet
The Group's net assets at the year end reduced to GBP41.52
million (2014: GBP45.69 million), the reduction mainly being due to
currency movements on goodwill values.
Cash flow and financing
Cash inflow from operating activities of GBP6.55 million (2014:
GBP7.71 million), was lower than the prior year, mainly due to
adverse working capital movements. The Group ended the year with
net cash of GBP1.28 million (2014: GBP2.68 million).
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. The
level of R&D expenditure was similar to the prior year at
GBP4.93 million (2014: GBP4.99 million) (an increase of 5% at
constant currency), equating to 16% of Group revenue (2014: 16%).
The total expenditure on StatPro Revolution including marketing and
other costs was GBP5.39 million (2014: GBP5.52 million).
Development costs of GBP4.05 million were capitalised in the year
(2014: GBP3.62 million) and amortisation on internal development
was GBP3.54 million (2014: GBP3.35 million). Expenditure on other
intangible assets was GBP0.08 million (2014: GBP0.44 million) and
total capital expenditure on property, plant and equipment was
GBP0.88 million (2014: GBP1.86 million).
Post Balance Sheet Events
Acquisition of Investor Analytics
On 21 January 2016, StatPro Inc. (a wholly owned subsidiary of
the Company) acquired the entire share capital of Investor
Analytics LLC, the US-headquartered, cloud-based risk analytics'
company to hedge funds and asset managers.
Acquisition of majority control of InfoVest
With effect from 1 March 2016, StatPro South Africa (Pty) Ltd.
(a wholly owned subsidiary of the Company) acquired a 51%
shareholding in InfoVest Consulting (Pty) Ltd, a South African
headquartered software provider, specialising in data warehouse,
ETL and reporting software for the asset management industry.
Further details on these acquisitions are provided in note
15.
New financing facility
The Group signed a new financing facility with Wells Fargo in
July 2015 for acquisitions, share buy backs and general corporate
purposes. The facility is committed to July 2020, subject to
compliance with agreed covenants. At 31 December 2015, the Group
had both net cash of GBP1.28 million and committed credit
facilities of GBP10.0 million available. As part of the acquisition
of Investor Analytics in January 2016, the financing facilities
were increased and the key features of the facilities now are:
-- Five year commitment period to July 2020
-- GBP10 million committed revolving credit facility
-- US$7 million committed term loan
-- US$3 million committed deferred drawdown loan
-- GBP7.5 million uncommitted additional facility available
The primary financial covenants are linked to recurring revenue
and adjusted EBITDA while allowing the Group to invest for growth.
The financing costs will be amortised over the five year term. This
new facility strengthens the Group's long-term financial structure
and therefore the Board believes that the Group is well positioned
to manage the business risks.
GROUP INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015
Notes 2015 2014
GBP'000s GBP'000s
2,
Revenue 3 30,187 32,018
Operating expenses before amortisation
of intangibles and exceptional
items (23,722) (25,529)
Amortisation of acquired intangible
assets (32) (188)
Amortisation of other intangible
assets (3,734) (3,640)
------------------------------------------- ------ --------- ---------
Operating expenses 4 (27,488) (29,357)
--------- ---------
Operating profit 2,699 2,661
Finance income 9 12
Finance expense (299) (303)
--------- ---------
Net finance expense (290) (291)
--------- ---------
Profit before taxation 2 2,409 2,370
Taxation 6 (788) (774)
--------- ---------
Profit for the year 1,621 1,596
========= =========
Earnings per share - basic 7 2.4p 2.4p
- diluted 7 2.4p 2.4p
GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31
DECEMBER 2015
2015 2014
GBP'000s GBP'000s
Profit for the year 1,621 1,596
Other comprehensive income to
be reclassified to the income
statement:
Net exchange differences (4,012) (946)
Total comprehensive (loss)/income
for the year (2,391) 650
========= =========
BALANCE SHEET AT 31 DECEMBER 2015
Notes Group Group
2015 2014
GBP'000s GBP'000s
Non-current assets
Goodwill 42,460 46,724
Other intangible assets 6,153 5,822
Property, plant and
equipment 2,233 2,470
Other receivables 8 147 109
Deferred tax assets 807 988
--------- ---------
51,800 56,113
Current assets
Trade and other receivables 8 8,264 7,722
Financial instruments
- other - 27
Current tax assets 198 -
Cash and cash equivalents 2,203 2,692
--------- ---------
10,665 10,441
Liabilities
Current liabilities
Financial liabilities
- borrowings (118) (12)
Financial instruments
- other (41) (15)
Trade and other payables 9 (4,654) (6,088)
Current tax liabilities (1,106) (828)
Deferred income (13,217) (12,603)
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Provisions 10 (642) (725)
(19,778) (20,271)
--------- ---------
Net current liabilities (9,113) (9,830)
--------- ---------
Non-current liabilities
Financial liabilities (801) -
- borrowings
Other creditors and
accruals 9 (47) (76)
Deferred tax liabilities (233) (449)
Deferred income (89) (60)
Provisions 10 - (13)
(1,170) (598)
--------- ---------
Net assets 41,517 45,685
========= =========
Shareholders' equity
Share capital 678 677
Share premium 23,537 23,474
Shares to be issued 63 63
Treasury shares (249) (249)
Other reserves 2,692 6,704
Retained earnings 14,796 15,016
--------- ---------
Total shareholders'
equity 41,517 45,685
========= =========
GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER
2015
Group Group
2015 2014
GBP'000s GBP'000s
Operating activities
Cash generated from operations 11 6,548 7,705
Finance income 9 12
Finance costs (93) (22)
Tax paid (832) (1,173)
--------- ---------
Net cash flow from operating
activities 5,632 6,522
--------- ---------
Investing activities
Investment in intangible
assets (4,127) (4,053)
Purchase of property,
plant and equipment (881) (1,863)
Proceeds from the disposal
of property, plant and
equipment 9 12
Net cash flow used in
investing activities (4,999) (5,904)
--------- ---------
Financing activities
Net proceeds from bank 639 -
loan
Net proceeds from finance 269 -
leases
Proceeds from issue of
ordinary shares 64 2
Dividends paid to shareholders (1,960) (1,889)
--------- ---------
Net cash flow used in
financing activities (988) (1,887)
--------- ---------
Net decrease in cash and
cash equivalents (355) (1,269)
--------- ---------
Cash and cash equivalents
at 1 January 2,692 4,014
Effect of exchange rate
movements (134) (53)
Cash and cash equivalents
at 31 December 2,203 2,692
========= =========
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR
ENDED 31 DECEMBER 2015
Share Share Shares Treasury Other Retained Total
capital premium to shares reserves earnings equity
be
issued
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
year - - - - - 1,596 1,596
Other comprehensive
income - - - - (946) - (946)
--------- --------- --------- --------- ---------- ---------- ---------
Total comprehensive
income - - - - (946) 1,596 650
--------- --------- --------- --------- ---------- ---------- ---------
Transactions with
owners:
Share based payment
transactions - - - - - 26 26
Tax relating to
share option scheme - - - - - (12) (12)
Shares issued - 2 - - - - 2
Dividends - - - - - (1,889) (1,889)
--------- --------- --------- --------- ---------- ---------- ---------
- 2 - - - (1,875) (1,873)
--------- --------- --------- --------- ---------- ---------- ---------
At 31 December
2014 677 23,474 63 (249) 6,704 15,016 45,685
========= ========= ========= ========= ========== ========== =========
Share Share Shares Treasury Other Retained Total
capital premium to shares reserves earnings equity
be
issued
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
year - - - - - 1,621 1,621
Other comprehensive
income - - - - (4,012) - (4,012)
--------- --------- --------- --------- ---------- ---------- ---------
Total comprehensive
income - - - - (4,012) 1,621 (2,391)
--------- --------- --------- --------- ---------- ---------- ---------
Transactions with
owners:
Share based payment
transactions - - - - - 121 121
Tax relating to
share option scheme - - - - - (2) (2)
Shares issued 1 63 - - - - 64
Dividends - - - - - (1,960) (1,960)
--------- --------- --------- --------- ---------- ---------- ---------
1 63 - - - (1,841) (1,777)
--------- --------- --------- --------- ---------- ---------- ---------
At 31 December
2015 678 23,537 63 (249) 2,692 14,796 41,517
========= ========= ========= ========= ========== ========== =========
Other reserves include merger reserves of GBP2,369,000 (2014:
GBP2,369,000) and translation reserve of GBP323,000 (2014:
GBP4,335,000). The merger reserve arose on acquisitions and
represents the difference between the fair value of shares issued
and the nominal value of the shares. 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 treated as part of equity.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER
2015
1 Announcement
This announcement was approved by the Board of directors on 8
March 2016. The preliminary results for the year ended 31 December
2015 are unaudited. The financial information set out in this
announcement does not constitute the Company's statutory accounts
for the years ended 31 December 2015 or 31 December 2014. The
financial information set out in the announcement has been prepared
on the basis of the accounting policies set out in the statutory
accounts of StatPro Group plc for the year ended 31 December 2014.
This condensed consolidated financial information does not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. The auditor's report on the financial
statements for the years ended 31 December 2014 was unqualified and
did not contain a statement under Section 498 of the Companies Act
2006. The financial statements for the year ended 31 December 2014
have been delivered to the Registrar of Companies.
2 Segmental information
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The Group's operating segments have been determined based on the
information regularly reviewed by the Group Executive Board, which
has been identified as the Chief Operating Decision Maker ("CODM").
The Group Executive Board considers the business to be split into
two primary geographical markets: EMEAA and North America. Central
costs relate to the expenses related to the Group's headquarters
and costs directly associated with the parent Company, which are
managed by the Group management team. The external debt is held
within Central.
All revenue, profit/(loss) before taxation and total assets are
attributable to the principal activity of the Group, being the
development, marketing and distribution of software, data solutions
and related professional services to the global asset management
industry. Segment assets represent those assets arising from the
operating activities of those segments. Segment results exclude the
impact of any intercompany recharges of revenues or costs.
For the year ended 31 December 2015:
EMEAA North Central Total
America
GBP'000s GBP'000s GBP'000s GBP'000s
Revenue 19,802 10,385 - 30,187
Segment expense (15,621) (9,330) (2,537) (27,488)
--------- --------- --------- ---------
Operating profit/(loss) 4,181 1,055 (2,537) 2,699
Finance net income/(expense) 6 (5) (291) (290)
--------- --------- --------- ---------
Profit/(loss) before
taxation 4,187 1,050 (2,828) 2,409
========= ========= ========= =========
Statement of financial
position
Assets 28,785 32,844 836 62,465
Liabilities (13,220) (4,803) (2,925) (20,948)
--------- --------- --------- ---------
Net assets 15,565 28,041 (2,089) 41,517
========= ========= ========= =========
Other
Purchase of property,
plant and equipment 392 489 - 881
Net investment in
intangible assets 3,926 201 - 4,127
Depreciation of property,
plant and equipment 569 427 - 996
Amortisation of intangibles 3,455 311 - 3,766
For the year ended 31 December 2014:
EMEAA North Central Total
America
GBP'000s GBP'000s GBP'000s GBP'000s
Revenue 20,820 11,198 - 32,018
Segment expense (16,453) (10,810) (2,094) (29,357)
--------- --------- --------- ---------
Operating profit/(loss) 4,367 388 (2,094) 2,661
Finance net income/(expense) 3 1 (295) (291)
--------- --------- --------- ---------
Profit/(loss) before
taxation 4,370 389 (2,389) 2,370
========= ========= ========= =========
Statement of financial
position
Assets 29,162 36,444 948 66,554
Liabilities (13,698) (5,452) (1,719) (20,869)
--------- --------- --------- ---------
Net assets 15,464 30,992 (771) 45,685
========= ========= ========= =========
Other
Purchase of property,
plant and equipment 1,198 665 - 1,863
Net investment in
intangible assets 2,786 602 665 4,053
Depreciation of property,
plant and equipment 557 635 - 1,192
Amortisation of intangibles 3,504 324 - 3,828
3 Further revenue analysis
The movement in Annualised Recurring Revenue ("ARR") in the year
was as follows:
Annualised Recurring Revenue ARR 2015 ARR 2014
GBP million GBP million
As at 31 December 2014 29.39 28.72
Net impact of exchange
rates (1.06) (0.42)
------------- -------------
At 1 January 2015 (at Dec
2015 rates) 28.33 28.30
New contracted revenue 4.13 3.87
Cancellations / reductions
/ conversions (3.76) (2.78)
------------- -------------
Net increase 0.37 1.09
ARR at 31 December 2015 28.70 29.39
============= =============
Revenue by type of service was as follows:
2015 2014 Change
GBP million GBP million %
Revenue
Software licences -
StatPro Seven 19.49 21.65 (10%)
Software licences -
StatPro Revolution 5.72 3.66 56%
------------ ------------
Software licences -
Total 25.21 25.31 (0%)
Data fees 3.34 3.95 (15%)
------------ ------------
Total recurring revenue 28.55 29.26 (2%)
Professional services
and other revenue 1.64 2.76 (41%)
------------ ------------
Total revenue 30.19 32.02 (6%)
============ ============
Percentage of total
revenue that is recurring 95% 91%
The revenue distribution profile for StatPro Revolution is as
follows:
StatPro Revolution Annualised Number Average Annualised Number Average
revenue of revenue revenue* of revenue
clients per clients per
client client
Annualised revenue 2015 2015 2015 2014 2014 2014
bands
GBP'000s Number GBP'000s GBP'000s Number GBP'000s
<GBP2k 73 69 1.1 146 127 1.1
GBP2k - GBP10k 344 73 4.7 430 97 4.4
GBP10k-GBP50k 1,812 85 21.3 1,386 62 22.4
GBP50k-GBP100k 2,158 29 74.4 1,324 19 69.7
>GBP100k 3,409 19 179.4 2,066 10 206.6
----------- --------- ----------- ---------
Total 7,796 275 28.3 5,352 315 17.0
-------------------- ----------- --------- --------- ----------- --------- ---------
*At constant currency
4 Operating expenses
2015 2014
GBP'000s GBP'000s
Operating expenses relate
to:
Staff costs
- Research and development 4,930 4,985
- Other staff costs 9,633 10,962
- Share based payment 121 26
- Internal development costs
capitalised (4,052) (3,615)
--------- ---------
Total staff costs 10,632 12,358
Depreciation of property,
plant and equipment 996 1,192
Amortisation of intangible
assets 3,766 3,828
Operating lease rentals in
respect of:
- Land and buildings 1,512 1,670
- Other 19 57
Auditors' remuneration 199 172
Other operating expenses 10,384 10,097
Exchange differences (20) (17)
Total operating expenses 27,488 29,357
========= =========
5 Adjusted profit before taxation, adjusted operating profit
margin and adjusted EBITDA
In order to provide the reader of the accounts with profit
measures that more clearly demonstrate the underlying business
performance from year to year a number of adjusted profit measures
are shown below.
a) Adjusted profit before taxation
2015 2014
GBP'000s GBP'000s
Profit before taxation 2,409 2,370
Add back: Amortisation on
acquired intangible assets 32 188
Add back: Share based payments 121 26
Adjusted profit before tax 2,562 2,584
========= =========
b) Adjusted operating profit
2015 2014
GBP'000s GBP'000s
Operating profit 2,699 2,661
Add back: Amortisation
on acquired intangible
assets 32 188
Add back: Share based payments 121 26
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Adjusted operating profit 2,852 2,875
========= =========
c) Adjusted EBITDA
2015 2014
GBP'000s GBP'000s
Operating profit 2,699 2,661
Add back: Depreciation
of property, plant and
equipment 996 1,192
Add back: Amortisation
on purchased intangible
assets 196 292
Add back: Amortisation
on acquired intangible
assets 32 188
Add back: Share based
payments 121 26
Adjusted EBITDA 4,044 4,359
========= ==================
Adjusted EBITDA margin 13.4% 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.
2015 2014
-------------------------- -------- --------
Revenue 100.0% 100.0%
Cost of services (38.6%) (37.7%)
-------------------------- -------- --------
Gross profit margin 61.4% 62.3%
R&D costs (4.2%) (4.2%)
Sales & Marketing costs (11.3%) (11.0%)
General & Administration
costs (32.9%) (33.6%)
-------------------------- -------- --------
(48.4%) (48.8%)
Share based payments 0.4% 0.1%
-------- --------
Adjusted EBITDA 13.4% 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. These are
analysed in further details below.
General & Administration
costs
Finance, HR & Administration (4.6%) (5.6%)
IT & Internal projects (5.1%) (3.7%)
Executive management (2.3%) (2.3%)
Employee related costs including
travel (5.8%) (8.3%)
-------- --------
(17.8%) (19.9%)
Property & communications (10.3%) (9.9%)
Professional fees, insurance
and other (4.8%) (3.8%)
-------- --------
(15.1%) (13.7%)
-------- --------
Total G&A (32.9%) (33.6%)
-------- --------
e) Free cash flow
2015 2014
GBP'000s GBP'000s
Cash generated from operations 6,548 7,705
Net interest paid (84) (10)
Net tax paid (832) (1,173)
Purchase of property, plant
and equipment (881) (1,863)
Investment in intangible assets (4,127) (4,053)
--------- ---------
Free cash flow 624 606
========= =========
6 Taxation
2015 2014
GBP'000s GBP'000s
Current tax
Current tax on profits for the
year (1,223) (1,303)
Adjustments in respect of prior
years 272 (125)
--------- ---------
Total current tax (951) (1,428)
Total deferred tax 163 654
Income tax expense (788) (774)
========= =========
The tax on the Group's profit before tax differs from the
standard rate of corporation tax in the UK of 20.25% (2014: 21.5%)
as follows:
2015 2014
GBP'000s GBP'000s
Profit before tax 2,409 2,370
--------- ---------
Tax charge on profit before tax at standard
rate of corporation tax in the UK of
20.25% (2014: 21.5%) (488) (510)
Tax effects of:
Non-taxable income and non-deductible
expenses (552) 272
Unrecognised deferred tax movement (183) (232)
Recognition of previously unrecognised
deferred tax asset 260 523
Adjustments in respect of prior
years 272 (125)
Effect of overseas taxes on current
taxes (157) (311)
Effect of overseas taxes on deferred
taxes 60 (391)
--------- ---------
Tax charge (788) (774)
========= =========
7 Earnings per share
Earnings per share - basic and diluted
Earnings Weighted Earnings Earnings Weighted Earnings
average per average per
number share number share
of of
shares shares
2015 2015 2015 2014 2014 2014
GBP'000s '000s pence GBP'000s '000s pence
Earnings per share
- basic 1,621 67,568 2.4 1,596 67,479 2.4
Potentially dilutive
shares - 551 (0.0) - 60 (0.0)
--------- --------- --------- --------- --------- ---------
Earnings per share
- diluted 1,621 68,119 2.4 1,596 67,539 2.4
---------------------- --------- --------- --------- --------- --------- ---------
Earnings per share - adjusted
Earnings Weighted Earnings Earnings Weighted Earnings
average per average per
number share number share
of of
shares shares
2015 2015 2015 2014 2014 2014
GBP'000s '000s pence GBP'000s '000s pence
Earnings per share
- basic 1,621 67,568 2.4 1,596 67,479 2.4
Add back: amortisation
of acquired intangibles 32 - 0.0 188 - 0.3
Add back: share
based payments 121 - 0.2 26 - 0.0
--------- --------- --------- --------- ---------
Adjusted earnings
per share 1,774 67,568 2.6 1,810 67,479 2.7
Potentially dilutive
shares - 551 (0.0) - 60 (0.0)
--------- --------- --------- --------- --------- ---------
Adjusted earnings
per share - diluted 1,774 68,119 2.6 1,810 67,539 2.7
-------------------------- --------- --------- --------- --------- --------- ---------
The adjusted earnings per share information has been provided in
order to assist the reader to understand the underlying performance
of the business on a comparable basis. Potentially dilutive shares
exclude any anti-dilutive share options.
8 Trade and other receivables
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Current assets: trade and other receivables
2015 2014
GBP'000s GBP'000s
Trade receivables 6,219 5,794
Other receivables 111 58
Prepayments 1,464 1,376
Accrued income 286 228
VAT recoverable 109 121
Rental deposits 75 145
--------- ---------
8,264 7,722
========= =========
Non-current assets: other receivables
2015 2014
GBP'000s GBP'000s
Rental deposits 147 109
--------- ---------
147 109
========= =========
9 Trade and other payables
Current liabilities: trade and other payables
2015 2014
GBP'000s GBP'000s
Trade creditors 1,416 1,433
Other creditors and accruals 2,053 2,903
Other taxation and social
security 1,185 1,752
4,654 6,088
========= =========
Non-current liabilities: other creditors
2015 2014
GBP'000s GBP'000s
Other creditors 47 76
47 76
========= =========
The non-current "Other creditors and accruals" of GBP0.05
million (2014: GBP0.08 million) relates to lease inducements, which
are amortised over the period of the relevant lease.
10 Provisions
Total movement on provisions for the Group is as follows:
Provisions - Group 2015 2015 2015 2014
Contingent Onerous Total Total
consideration contracts
GBP'000s GBP'000s GBP'000s GBP'000s
At 1 January 676 62 738 980
Utilised in the
year - (55) (55) (190)
Exchange differences (34) (7) (41) (52)
At 31 December 642 - 642 738
=============== =========== ========= =========
The contingent consideration is the consideration on the SiSoft
acquisition and is now expected to be utilised in 2016 although it
is possible that it will fall beyond twelve months.
11 Reconciliation of profit before tax to net cash inflow from
operating activities
2015 2014
GBP'000s GBP'000s
Profit before taxation 2,409 2,370
Net finance expense 290 291
--------- ---------
Operating profit 2,699 2,661
Depreciation of property,
plant and equipment 996 1,192
Loss on disposal of property,
plant and equipment 11 42
Amortisation of intangible
assets 3,766 3,828
(Increase)/decrease in
receivables (782) (1,597)
(Decrease)/increase in
payables and provisions (1,402) 1,364
Increase/(decrease) in
deferred income 1,139 189
Share based payments 121 26
--------- ---------
Net cash inflow from operating
activities before exceptional
items 6,548 7,705
========= =========
12 Analysis of changes in net cash
At 1 Cash Non-cash Exchange At
January flow changes differences 31
2015 December
2015
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
Cash and cash equivalents
(per balance sheet) 2,692 (355) - (134) 2,203
Overdrafts - - - - -
--------- --------- --------- ------------- ----------
Cash and cash equivalents
(per statement of cash
flows) 2,692 (355) - (134) 2,203
Finance leases - (269) - - (269)
Bank and other loans (12) (639) - 1 (650)
Net cash 2,680 (1,263) - (133) 1,284
========= ========= ========= ============= ==========
At 1 Cash Non-cash Exchange At
January flow changes differences 31
2014 December
2014
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
Cash and cash equivalents
(per balance sheet) 4,014 (1,269) - (53) 2,692
Overdrafts - - - - -
--------- --------- --------- ------------- ----------
Cash and cash equivalents
(per statement of cash
flows) 4,014 (1,269) - (53) 2,692
Bank loans (net of issue
costs deferred) (12) - - - (12)
Net cash 4,002 (1,269) - (53) 2,680
========= ========= ========= ============= ==========
13 Reconciliation of net cash flow to movement in net cash
2015 2014
GBP'000s GBP'000s
Increase in cash and cash equivalents
in the year (355) (1,269)
Movement on bank loans (639) -
Movement on finance leases (269) -
Exchange movements (133) (53)
--------- ---------
Movement in net cash (1,396) (1,322)
Net cash at beginning of year 2,680 4,002
Net cash at end of year 1,284 2,680
========= =========
14 Contingent liabilities
As is normal for a group of this size and scope of operations,
Group companies are involved in a number of potential legal claims
and disputes from time to time arising from our activities, none of
which are expected to have a material impact on the Group's
financial results.
The Board expects the remaining contingent consideration payable
to the 45% minority shareholder (22% of total shares) in Sisoft to
be in the range of EUR0.7 million - EUR1.1 million (approximately
GBP0.6 million - GBP0.9 million). It is possible that it will not
be fully resolved during 2016. There is also a risk that the final
consideration determined by the Court including related costs will
be higher than the amount provided, although the Board's estimate
of the measurement of the liability has not changed (allowing for
fluctuations in exchange rates).
15 Post Balance Sheet Events
Acquisition of Investor Analytics
On 21 January 2016, StatPro Inc. (a wholly owned subsidiary of
the Company) acquired the entire share capital of Investor
Analytics LLC, the US-headquartered, cloud-based risk analytics'
company to hedge funds and asset managers for a cash consideration
of $10 million. There is an additional contingent payment of up to
$6 million, payable after one year, which is dependent on securing
a number of new contract wins.
Highlights of the acquisition are:
-- Complementary Risk Factor and Monte Carlo models to add to
StatPro's Historical Simulation risk model
-- Significantly increases StatPro's US presence, enhancing geographical reach
-- Annualised Recurring Revenue ("ARR") of $4.85 million (GBP3.3 million)
-- Increases StatPro's cloud-based ARR to 34% of total Group ARR from 27%
-- Expected to be earnings enhancing in 2016 on a pro-forma
basis following completion of the integration programme
-- 53 client contracts - all new client relationships for StatPro
-- Cash consideration:
o $7 million on closing
o Two deferred payments - $2 million after one year and $1 million after two years
o Additional contingent payment - up to $6 million after one
year, dependent on securing a number of new contract wins
Based on unaudited results for the year ended 31 December 2015,
IA is expected to report revenue of $5.0 million (of which
approximately 94% was recurring) and an EBITDA loss of
approximately $0.3 million. Cost synergies are expected to be
approximately $1.0 million per annum (GBP0.7 million) for data
feeds, administrative services and other costs.
Acquisition of majority control of InfoVest
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