Sopheon PLC AGM Statement (0250C)
June 13 2019 - 2:00AM
UK Regulatory
TIDMSPE
RNS Number : 0250C
Sopheon PLC
13 June 2019
SOPHEON PLC
("Sopheon" or the "Company")
AGM Statement
At today's Annual General Meeting of Sopheon, the international
provider of software, expertise, and best practices for enterprise
innovation management solutions, the Board will give shareholders
the following update and review of the business.
In recent years, we have described how we have broadened our
mission from one that helps R&D organizations to improve
innovation, to one that helps major enterprises achieve their
strategic goals. This extension of our vision into what some are
beginning to call a third major pillar of the enterprise stack -
alongside ERP and CRM - has dramatically expanded our horizons and
potential. In an increasingly digital world, organizations are
challenged to operate with more agility and velocity to survive and
thrive; this is where Sopheon can add significant value to our
customers. The potential addressable market for this opportunity is
substantial. Sopheon continues to benefit from increased market
recognition through industry business analysts such as Gartner and
Forrester Research, having been named in 22 research reports in
2018.
While executing on our growth strategy, we continued to
strengthen our financial performance. Once again, revenues, EBITDA
and other profit measures in 2018 all exceeded market expectations,
and resulted in two upward revisions. Revenues rose 19% to $33.9m
from $28.5m in 2017. EBITDA reached $8.9m, up 11% from $8m.
Substantial realignment of our debt position in 2017 fed through
into an even larger increase in profit before tax, up 25% to $6.4m
compared to $5.1m the year before. Our balance sheet ended the year
very strong, with net assets rising to $25.6m from $18.6m the year
before, and net cash rising to $16.7m from $9.5m; 100% of this
growth was generated organically. All of this was accomplished
while achieving a historically high recurring revenue retention
rate of 97 per cent.
We continued to focus on and refine our three core growth
strategies - to extend our footprint in existing customers by
expanding our enterprise platform, to target new business
acquisition with a clear vertical focus, and to develop a
partnership ecosystem. These core strategies, along with our
tremendous staff and unique culture, have been at the root of our
consistent and solid financial performance. The number of larger
opportunities in our sales pipeline continues to grow, validating
our stated strategy. As always with a mostly perpetual license
model, such deals can have a big revenue effect on the period in
which they close. In parallel, customer preference for Software as
a Service ("SaaS") rather than perpetual licensing in our market is
beginning to come through. With our strong balance sheet, we are
assessing how to accelerate this migration to an even higher
recurring revenue model. We also remain open to M&A
opportunities, provided they align with our strategic
priorities.
When we published our annual report for 2018, we announced a
proposal to increase our dividend from 2.5p to 3.25p per share,
which we will put to shareholders at today's annual general
meeting. We are delighted to be following through on the commitment
made last year to maintain a progressive dividend policy, which the
Board believes underlines our maturity as a business.
Outlook
As noted above there are several larger opportunities in our
pipeline where we are strongly positioned and that we are confident
have a high probability of closing in the coming months.
Accordingly, at the time of this AGM full year revenue visibility
from contracted business and recurring revenue streams is at
similar levels to this time last year, at $23m. We expect this to
rise sharply through the summer. In previous years we have
typically had a stronger second half and fourth quarter in
particular, and we expect 2019 to follow this pattern.
It has been very exciting over recent weeks to announce wins in
countries like Thailand and Pakistan, representative of the
potential for Sopheon of the significant Asian market. We are also
seeing traction with partners both in overseas territories and with
major management consulting firms. This morning we are delighted to
announce the release of Accolade 12.3, with new features
specifically designed to help global corporations achieve their
digital and business transformation objectives.
The Board remains confident of achieving our full year
expectations, and in continuing to deliver against Sopheon's
strategic goals and expanded vision. The Board looks forward to
providing shareholders with a more detailed update at the time of
its interim results for the 6 months to 30 June 2019, expected to
be released in late August.
For further information contact:
Barry Mence, Chairman + 44 (0) 1276
Arif Karimjee, CFO Sopheon plc 919 560
Carl Holmes/Giles Rolls (corporate
finance) + 44 (0) 20 7220
Alice Lane (ECM) finnCap 0500
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
About Sopheon. Sopheon (LSE: SPE) partners with customers to
provide complete Enterprise Innovation Management solutions
including software, expertise, and best practices, that enable them
to achieve exceptional long-term revenue growth and profitability.
Sopheon's Accolade solution provides unique, fully-integrated
coverage for the entire innovation management and new product
development lifecycle, including strategic innovation planning,
roadmapping, idea and concept development, process and project
management, portfolio management and resource planning. Sopheon's
solutions have been implemented by over 250 customers with over
60,000 users in over 50 countries. Sopheon is listed on AIM,
operated by the London Stock Exchange. For more information, please
visit www.sopheon.com.
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END
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