Last checked at 22 Jan 2024 07:00
22 January 2024
Aptitude Software Group plc
("Aptitude" or the "Group")
Full Year Trading Update and Notice of Results
Aptitude (LSE:APTD), a market-leading provider of finance transformation software solutions, specialising in fully autonomous finance, today provides an update for the financial year ended 31 December 2023 and the current financial year.
Trading Update
Aptitude made good progress in 2023 delivering profits in line with expectations. In addition to several new business successes across the Group's product suite, including the number one Japanese bank, the Group achieved a series of key milestones with Fynapse, Aptitude's next generation digital finance platform.
Key milestones for Fynapse included:
· | Meeting key market readiness for our Microsoft partnership with a full integration to D365 and enablement on the Azure cloud platform |
· | Continued positive progress with the Telco charter client following the successful go-live in July 2023; |
· | A growing number of existing AAH clients assessing migration to Fynapse, supporting our strategy |
· | The signature of the Group's first new logo Fynapse client in December 2023 with a multi-year subscription agreement; and |
· | A strong and growing pipeline of opportunities, both with new and existing clients, supported by the Group's partnerships including Microsoft and others. |
The Group continued to build on the new business success achieved in the first half of 2023 securing several new major clients in the second half of the year. These successes include:
· | A partner-led multi-year agreement for the Aptitude Accounting Hub with a US based investment management company, which will convert to Fynapse in the second year of the contract; |
· | A new multi-year agreement for the Aptitude Accounting Hub with the number one Japanese bank to support their European operations; |
· | A multi-year agreement for Aptitude RevStream with a UK based financial software company; |
· | A multi-year renewal for a major e-Suite client with the addition of new divisions of the client, expected to deliver incremental ARR benefit in 2024; and |
· | A material new multi-year agreement with a global existing Financial Services client to take Aptitude Assure, the Group's recurring managed services solution. |
The Group continued to experience elevated churn in its Subscription, Billing and Revenue Management products. As a result, the Group's Annual Recurring Revenue ('ARR') grew by 2% on a constant currency basis in the year to £51.1 million (31 December 2022: £50.2 million, 30 June 2023: £49.6 million). As previously reported, churn levels were particularly impacted by the wider macroeconomic environment. However, on a constant currency basis, ARR on our Finance Transformation products, AAH and Fynapse, grew at 12% year on year.
As noted at the time of the Interim Results release, the Board took action to reduce cost in the first half of 2023 to underpin profit expectations for the remainder of the year and increase operational efficiency in future years. Throughout 2023, investment was protected in areas of strategic focus, including Fynapse and its go to market capabilities.
The Group's balance sheet remains strong, with cash at 31 December 2023 of £34.1 million (31 December 2022: £29.2 million) and net funds of £22.7 million (31 December 2022: £15.9 million) reflecting the Group's increasing profitability and strong cash generation.
Alex Curran, CEO, has formed a new Senior Leadership Team with an associated flattened organisational structure. An action plan has been put in place and is being executed across all functions to accelerate revenue growth, reduce churn, strengthen the Group's partner strategy and improve overall business performance.
Outlook
Fynapse represents an exciting opportunity and the Board looks ahead positively at the opportunity presented by the platform in 2024 and beyond. Improved performance is underpinned by the Group's growing pipeline of opportunities, strong partners and a refreshed leadership focused on improving general business performance, reducing churn, driving strong growth in ARR and improving margins. Additionally, the Group begins the year with £53.2 million of revenue under contract.
The Board will monitor the wider macroeconomic situation, its potential impact on client and new logo investment decisions and ongoing spend on professional services. The Board intends to carefully manage investment levels in the business, whilst protecting strategic investment in Fynapse. Whilst ongoing churn may have an impact, ARR growth is expected to materially improve in 2024 and profit expectations remain underpinned for the year ahead.
Long term, the Board sees Fynapse as a material accelerator of Aptitude's growth. It is encouraged by the first sale of Fynapse to a net new client at the end of 2023, and is confident in generating further Fynapse sales, both from new logos and across the existing base of clients, in 2024.
Notice of Results
The Group expects to issue its results for the year ended 31 December 2023 on Thursday, 21 March 2024.
A presentation for analysts will take place on the day. Analysts wishing to attend should contact aptitude@almastrategic.com to register.
Aptitude Software Group plc
Ivan Martin, Chairman 020-3687-3200
Alex Curran, Chief Executive Officer
Mike Johns, Chief Financial Officer
Alma Strategic Communications
Caroline Forde / Hilary Buchanan 020-3405-0205
About Aptitude Software
Aptitude Software provides software solutions that deliver fully autonomous finance to enable its clients to drive growth, efficiency and sustainability. Fynapse is Aptitude's intelligent finance data management and accounting platform designed to increase productivity and lower costs for finance teams globally. Fynapse provides a single view of finance and business data, unparalleled performance and automation, faster and better insights, user-friendly functionality and market-leading total cost of ownership.