(Sharecast News) - Management software and services provider Sopheon reported a fall in revenue to $13.7m in its first half on Thursday, from $15.9m a year earlier.
The AIM-traded firm said its EBITDA for the six months ended 30 June totalled $2.5m, down from $4.1m a year earlier, while its net cash increased to $18.7m from $15.5m.
It said recurring revenue for the half-year came to an annual run rate of $15.3m, which compared favourably to the $13.7m it stated at the interim a year ago.
The board said that in line with what it said in its July trading update, in conjunction with an "unusually strong" first half comparative from 2018, several factors had contributed to a shift back to a "more traditional" second-half weighting, alongside a "rapidly advancing" sales pipeline.
It said the underlying market and commercial momentum was increasing, with expanded sales resources contributing to a 48% growth in sales pipeline value between January and June, expected to drive a strong second-half weighted revenue profile.
Both the volume of deals and the number of larger deals in the pipeline had risen to all-time highs, the board claimed.
The proportion of software-as-a-service (SaaS) business in the expanded pipeline had risen sharply, it added, potentially accelerating Sopheon's desired transition to a higher recurring revenue model and greater lifetime customer revenue.
Revenue visibility for the full year was now at $25.4m, down from $27.2m at the same time last year, with the directors adding that the company's cash generation and balance sheet remained "strong".
"The future prospects of the business have never been brighter, and we do not believe this first half pause in the impressive financial performance of the past several years has a bearing on Sopheon's unique potential and growth opportunity," said chairman Barry Mence.
"The business remains profitable and cash generative, and our balance sheet is stronger than ever.
"With unprecedented activity and higher value in our sales funnel, we continue to anticipate rising deal flow and traction through the balance of the year."
Mence said the board saw the shift to SaaS as reflective of a change in procurement behavior, and not a change in commercial momentum, which he said was rising.
"The board believes that this development will drive shareholder value and remains confident that Sopheon is well positioned to build on its leadership position in the new and exciting space of strategy execution management."
9 Jun 2016 08:20