At the Annual General Meeting of Sopheon plc to be held later today, the chairman of the board will give shareholders an update and review of the business. This will include the following statement:
“After a very solid performance in 2012, we were pleased to report another year of growth in 2013 with revenues rising to £13.3m. Profitability continued to improve as well, with EBITDA at £1.9m and profit before tax £341,000. Our focus on vertical markets resulted in several new license wins with consumer goods companies. Our work with major consulting partners also continued to gather pace. Sopheon’s agile development methodology resulted in two milestone software releases with Accolade 8.3 and 9.0. Furthermore, a number of corporate milestones were progressed in 2013; we secured court approval for a capital reduction, reducing the deficit on the Group’s accumulated reserves and we implemented a share consolidation which reduced the number of shares in issue by a ratio of 20:1 and decreased the number of very small shareholdings by over 5,000.
As we first predicted some years ago, we believe the market in which Sopheon operates is shifting to one that is more operationally critical, with higher exposure to senior management, just as ERP and CRM shifted in earlier times. Interactions with customers such as PepsiCo, BASF, SABIC and Philips, and coverage from analysts such as Gartner, demonstrate rising acknowledgement that innovation is becoming an enterprise level priority, which requires enterprise level software. We are also seeing and participating in the first conferences aimed directly at Chief Innovation Officers. This changing environment can lead to more phased multi-year client relationships with elongated revenue profiles - but with greater and more strategic long term potential. Since the start of the year we have brought new blood into our US sales team in part to reflect these trends in the market. We are particularly pleased to announce Sheila Plunkett as the US vice president of sales. Sheila joined us in April and has extensive experience gained from both large companies such as IBM, E&Y and SAP as well as small start-up software companies, building a record of developing enterprise sales teams that deliver results.
At this time last year, we noted that we were working to close a considerable amount of license business, some of which was needed in June to enable first half revenues to exceed those in the equivalent period in 2012. Last year, we managed to achieve that goal. Revenue visibility today again stands above £8m, comparable to a year ago; and there are again plenty of deals we are striving to close by the end of June. However, looking at the current sales pipeline, and the recognition profile of closed business, we expect that revenues in 2014 will be heavily weighted to the second half of the year. As we have always emphasised, the actual timing and value of individual sales events can have a substantial impact on reported performance for a given period, as can the market developments and sales team changes mentioned above.
Looking beyond sales and operations, the high pitch of product release has continued during the last six months, with the release of Accolade® 9.1 in April, advancing our enterprise portfolio and planning capabilities. We have continued to work on our corporate restructuring program, negotiating $3.5m in new debt facilities with Silicon Valley Bank, at lower interest cost, and more recently we have secured agreement to extend the maturity of our convertible loan note by an additional two years. However, as noted before, incorrect processing of our share consolidation by certain Netherlands market participants means that the board is planning to repeat the procedure, and our current plan is to do this after publication of our interim results. Also unfortunate was Euronext’s decision to wind down the Alternext Amsterdam segment, relatively soon after we were encouraged to join it. Options available to Sopheon include a transfer of our listing back to the Euronext Amsterdam main market, a transfer to Alternext Paris or Brussels, or a consolidation solely onto our primary AIM listing in London. We will continue to explore all alternatives and will inform shareholders accordingly.”
For further information contact:
|Barry Mence, Chairman||Sopheon plc||+ 44 (0) 1483 685 735|
|Arif Karimjee, CFO||Sopheon plc||+ 44 (0) 1483 685 735|
|Charlotte Stranner / Victoria Bates||finnCap||+ 44 (0) 20 7220 0500|
|Heather Armstrong||Newgate Threadneedle||+ 44 (0) 20 7653 9842|
|Claire Verhagen||Citigate First Financial||+ 31 (0) 205 754 010|