Sopheon plc, the international provider of software and services that improve the financial return from innovation and product development investments, announces that it now expects 2011 revenues to be of a similar magnitude to the previous year. In such circumstances, preliminary estimates are that the same would be true of EBITDA.
Revenue visibility* for 2011 stands above £10 million today, and a number of deals are being worked for closure during the remaining days of the year, as is typical in the software industry.
Results in 2011 have been impacted by factors the directors believe are temporary and symptomatic of the sensitivity of our results to individual sales events. These factors include slippage in deals originally slated for closure during December; the introduction of contract contingency terms that prevent recognition in the current year; a revival of interest in rental license arrangements that shift recognition forward, but also improve the profile of recurring revenue; and a resurgence of larger scale opportunities characterized by the introduction of proof of concept phases prior to license commitment. Looking ahead, our sales pipeline remains very active and includes a number of substantial opportunities which we expect to bear fruit in 2012.
*A definition of how visibility is calculated was provided in our half- yearly report published on 24 August 2011.
Barry Mence, Chariman, commented:
“Although disappointed that our results are now unlikely to demonstrate the growth we had hoped for, and indeed that we feel in our daily engagement with the market, we remain positive about the group’s performance in these uncertain economic times. We are working on several interesting opportunities with substantial potential, and will continue to position and drive the business for growth.”
Sopheon (LSE: SPE) is an international provider of software and services that help organisations improve the business impact of product innovation. Sopheon’s solutions automate and govern the innovation process, enabling companies to increase revenue and profits from new products. Sopheon’s solutions are used by industry leaders throughout the world, including BASF, Cadbury, Corning, Electrolux, General Motors, Honeywell, Motorola and SABMiller. Sopheon is listed on the AIM Market of the London Stock Exchange and on the Euronext in the Netherlands