At today’s Annual General Meeting of Sopheon, the international provider of software and services that help organizations generate more revenues and profits from new products, the Board will give shareholders an update and review of the business.
It gives us great pleasure to report another year of excellent financial and operational progress, as we continue to advance our strategy of being the world’s leading solution provider of enterprise-class innovation management software solutions. A year ago we were pleased to report solid strategic and financial progress, and we are delighted to say the same applies today, one year later. Last year we grew revenues to $23.2m from $20.9m in 2015 and $18.3m in 2014, and we delivered another substantial increase in profitability, with EBITDA rising to $5.2m before exchange gains ($5.6m including exchange gains) from $4.1m the year before, which was itself more than triple the 2014 performance. Profit before tax rose to $3.0m from $1.2m in 2015. In 2016 we also initiated partial recognition of our substantial deferred tax asset, which resulted in a profit after tax of $4.3m. Net assets nearly doubled to $10.4m from $5.5m in 2015.
The revenue growth was underpinned by a rise to 49 license transactions from 42 the year before, of which 17 were new customers, up from 14 in 2015. We continued to invest in and show traction with the two elements of our go-to-market strategy – both the global end-to-end enterprise solution, and the “out-of-the-box” Accolade Express solution for quicker time to value. Our market strength in the consumer products industry was again recognized, with Sopheon being voted a “top ten software vendor” for the seventh consecutive year by the CGT magazine readership. In addition to this progress, we also saw strong traction in the aerospace and defense and chemicals sectors. Sopheon’s commercial success is being achieved in parallel with strategic and operational initiatives aimed at underpinning our continued growth for the next three to five years. We maintained our rapid pace of product development releases, with another three in 2016, further advancing our platform for enterprise utilization and flexibility, followed by version 11.1 which we released in February this year.
This continued investment supports our growth strategy in two areas. One is to capitalize on existing client demand to expand their Accolade investment beyond product innovation to support Enterprise Initiative Management tracking and decision making. This market opportunity has been validated by Gartner’s 2016 Market Guide for Strategy Execution Software and their recognition of Sopheon in this emerging space. We are also delighted to announce Sopheon’s inclusion in Gartner’s Magic Quadrant for Project Portfolio Management, just last week. Sopheon is the only vendor referenced in both the Market Guide for Strategy Execution Software and the Magic Quadrant for Project Portfolio Management. In Sopheon’s view, this provides strong validation of our unique position and strength in the enterprise portfolio management, enterprise initiative management, and product development markets. The second growth area we continue to invest in is our vertical industry focus on chemical, consumer goods, food and beverage, aerospace and defense, and high-tech. In addition, we are researching the insurance, service and automobile industries as we have recently signed customers in these areas. Such customers help us to understand the value proposition Accolade can bring to new vertical markets, and to determine if these represent further new growth opportunities for the Company.
Following several years of clarifying our debt, equity and listing structure, our corporate activity has been relatively quiet in the past year, other than extension of the maturity of our debt facilities to January 2019.
Sopheon has a market-leading solution, global reach, solid financials, a clear corporate structure, an accelerating market, and most importantly great people – a real platform for growth. Full year revenue visibility for 2017 from contracted business and recurring revenue streams is now at $17.5m, compared to just under $17.0m at this time last year. This includes 20 license orders, up from 14 for the same period last year. This is a different mix compared to this time last year, which included a very substantial order from an existing enterprise tier customer. This is further evidence of the increased adoption of the Company’s software and services from a broader range of businesses, including several with expected upside revenue later this year. Sopheon also continues its focus on working with and growing relationships with global admired blue chip customers such as Electrolux, PepsiCo, Proctor & Gamble and Merck. These factors, together with a strong sales pipeline, give the Board confidence in meeting our strategic and financial plans for the year, and in delivering continued positive development in our performance for 2017 and beyond.
For Further Information Contact:
|Barry Mence, Chairman
Arif Karimjee, CFO
|Sopheon plc||+ 44 (0) 1276 919 560|
|Carl Holmes / Giles Rolls (corporate finance)
Mia Gardener (corporate broking)
|finnCap||+ 44 (0) 20 7220 0500|
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
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 200 customers with over 60,000 users in over 50 countries. Sopheon is listed on AIM, operated by the London Stock Exchange.