Last checked at 6 Jul 2017 07:00
6 July 2017
MICROGEN plc ('Microgen' or 'Group')
TRADING UPDATE AND NOTICE OF RESULTS
Ahead of announcing Interim Results for the six months ended 30 June 2017 on 24 July 2017, Microgen (MCGN.L), a leading provider of business critical software and services, today issues the following update on trading for the financial year to date.
The Group has made excellent progress in the first half of 2017 resulting in a financial performance ahead of the Board's original expectations for the period whilst maintaining margins consistent with the prior year. The Group's two businesses are successfully executing their declared strategy with Aptitude Software delivering strong organic growth and Microgen Financial Systems successfully continuing on its transition towards a business focused on the Trust & Fund Administration ('T&FA') market.
A key highlight for the Group is the continued new business wins that have driven growth in Aptitude Software's recurring revenue base. Since 30 June 2016, the recurring revenue in Aptitude Software has increased 42% to £15.0 million as at 30 June 2017 (H1, 2016: £10.6 million and 31 December 2016: £12.6 million). There has also been exceptional growth in demand for Aptitude Software's implementation services in the first half of the year as a number of clients progress towards going live with the Aptitude Revenue Recognition Engine ('ARRE'). Upon completion of the half year the Board has reviewed the on-going demand for Aptitude Software's implementation services and, whilst clients' requirements continue to evolve, the Board is now confident that the exceptional level of demand experienced in the first six months of the year will continue throughout 2017, leading to a financial performance for the Group significantly ahead of the Board's expectations for the year.
Opportunities for Aptitude's existing software and its new products provide the business with confidence for future years. Partners are becoming an increasingly important channel for new business, and as they provide a growing proportion of resources for new implementations, and as a number of the larger ARRE projects are completed, the exceptional level of demand for services experienced in 2017 is expected to moderate in 2018.
Microgen Financial Systems has maintained its focus on the T&FA market within the wealth management sector. The acquisition of Primacy Corporation in February 2017, a competitor in the T&FA market, represented the fifth acquisition since December 2014 and further strengthens the position of the business in this market. As a result of this focus T&FA revenues now represent approximately 60% of Microgen Financial Systems' H1 2017 revenue (H1, 2016: 51%), compared to 33% at the beginning of this transition in 2014.
Contacts
Ivan Martin, Chairman 020-7496-8100
Philip Wood, Chief Financial Officer
James Melville-Ross / Darius Alexander 020-3727-1000
FTI Consulting