StatPro Regulatory News (SOG)

4 Jul 2005 07:00

Statpro Group PLC4 July 2005 For release at 07.00 a.m. Monday, 4 July 2005 STATPRO GROUP PLC ("StatPro" or the "Group") Acquisition and Half Year Trading Update Highlights: • Acquisition of Delve, a leading supplier of enterprise and web reporting solutions to asset managers• Solid current trading continues with encouraging outlook IntroductionIn line with its strategy to develop a complementary multi-product offering,StatPro Group plc, the AIM listed provider of portfolio analytics solutions forthe global asset management industry, is pleased to announce the acquisition on1 July 2005 of Delve Limited ("Delve") which has developed a highly regardedenterprise and web reporting solution. StatPro is acquiring 100% of Delve for a cash and deferred consideration, basedon a multiple of revenue of the enterprise and web reporting solutions. Theinitial consideration payable is £0.55 million before costs. Subsequentdeferred consideration will be based upon incremental recurring licence revenueand will be paid after 18 months, 24 months and 36 months, amounting to onetimes the incremental recurring revenue. Based on the formula, and depending onthe exact timing of new contracts, the total consideration will amount toapproximately two times the recurring revenue but is capped at £4.0 million intotal. The consideration will be adjusted for the net assets on completion. Theacquisition is being financed out of existing cash resources. Cash alternative to deferred consideration elementIn lieu of the deferred consideration element described above, there is a cashalternative option available to the vendors. The cash alternative is capable ofacceptance by the vendors by 19 July 2005. The maximum cash available to thevendors pursuant to the cash alternative is £0.45 million. Should the cashalternative be taken in full by the vendors no deferred consideration would bepayable. To the extent that the cash alternative is taken up in part only, thedeferred consideration will be reduced pro rata by the percentage acceptance forthe cash alternative. A further announcement of the result of the cashalternative will be released following its closing. The Board is expecting that the acquisition of Delve will be earnings enhancingin 2006, the first full year of combined operations. Background to and reasons for the acquisitionReporting of performance and risk is now an essential part of the interactionbetween a fund manager and its clients. There is a competitive advantage to begained by having excellent reporting which allows clients to drill down toobtain further detailed, accurate and timely information in an efficient andreliable way. Since early 2004, we have been working closely with Delve tomarket their reporting solutions as part of our client offerings. We have hadsome success but we believe that by combining our operations and fullyintegrating the product into the StatPro suite we will have even greatercommercial success. The Group anticipates sales interest from both its existingclient base and from other portfolio managers globally as they continuously seekto improve their portfolio performance and risk reporting. The enterprise and web reporting solution has been developed by the team atDelve led by Jonathan Hurwitz, Managing Director, an expert in internet-basedreporting solutions. Delve now has nine clients and reported revenue ofapproximately £300,000 in the year ended 31 March 2005, representing a growth of25% over the previous year, and an operating loss of approximately £57,000compared to a loss of £218,000 in the previous year. Delve is based in Londonand has five employees, all of whom will be retained, and it is intended tointegrate the business within StatPro immediately. Trading UpdateFurther to the trading update issued on 18 May at the time of the Company's AGM,the Board is pleased to report that further progress has been made in May andJune and that it accordingly expects a satisfactory performance in revenuegrowth for both the half and full year. This reflects the marked improvement in the level of new business secured duringthe first six months of 2005 over the comparable period in 2004 and that thesales outlook continues to be encouraging. Continental European markets remainthe strongest source of new business with approximately two thirds by value ofnew contracts from this region. Since the AGM and following application to the Court we have successfullyreduced the Company's share premium account and eliminated the deficit on theprofit and loss account so as to enable the payment of dividends in the future. The Group expects to report its interim results for the six months ended 30 June2005 on Monday 1 August 2005. Commenting on the transaction Justin Wheatley, Chief Executive of StatPro Group,said: "There is considerable demand amongst fund managers to improve clientreporting and Delve has some of the most sophisticated technology to meet thisdemand. Combined with StatPro's growing client base and wide distribution, weare confident that the acquisition of Delve will be a success and earningsenhancing." Commenting on the transaction Jonty Hurwitz, MD of Delve, said: "I have now beenworking with the team at StatPro for around two years and I was pleased with thecollaboration which resulted in signing our first joint client last year. Theteam at StatPro are focussed on developing good client relationships and I lookforward to working as part of the StatPro team." - Ends - For further information, please contact: StatPro Group plcJustin Wheatley, Chief Executive 020 8410 9876 Andrew Fabian, Finance Director Corporate SynergyJustin Lewis/Rhod Cruwys 020 7626 2244 SmithfieldReg Hoare/Sarah Richardson 020 7360 4900 Notes to Editors: StatPro Group plc is a leading provider of portfolio analytics solutions for theglobal asset management industry. StatPro floated on the London Stock Exchangein May 2000 and transferred its listing in June 2003 to AIM. StatPro has grownits revenue from continuing operations from £1.8 million in 1999 to £9.1 millionin 2004. Delve Limited is a software reporting development and marketing company based inLondon, with a revenue of £0.3 million in the year ended 31 March 2005 and is aleading supplier of enterprise and web reporting solution to asset managers. This information is provided by RNS The company news service from the London Stock Exchange