StatPro Regulatory News (SOG)

For Release at 07.00

Wednesday, 14 March 2012

STATPRO GROUP PLC

("StatPro", "the Company" or "the Group")

Preliminary Results for the Year ended 31 December 2011

StatPro Group plc (AIM:SOG), the AIM listed provider of portfolio analytics and data solutions for the global asset management industry, today announces its unaudited preliminary results for the year ended 31 December 2011.

Financial Highlights:

·; Annualised recurring contract revenue up 4% to £29.41 million (2010: £28.35 million **)

·; Maintained high renewal rate on recurring contracts at 92% (2010: 92%)

·; Annualised recurring contract revenue for StatPro Revolution of £0.47 million (2010: nil)

·; Adjusted EBITDA* reduced by 28% to £6.12 million (2010: £8.45 million) in year of increased investment in cloud technology solution

·; Cash flow from operating activities (before exceptional items) of £10.37 million (2010: £10.66 million)

·; Net debt reduced to £3.40 million (2010: £5.52 million) and represents 0.56 times adjusted EBITDA (2010: 0.65)

·; Total dividend increased by 8% to 2.6p (2010: 2.4p)

Operational Highlights:

·; Results reflect transition from traditional software to cloud based software business

·; Good progress in transfer of StatPro Seven clients into StatPro hosted environment with 42% by value now hosted (2010: 30%)

·; StatPro Revolution achieved sales in all key markets (US, UK and Europe, South Africa, Australia and Asia) and into diverse market segments in its launch year - now has over 60 customers

·; 7 custodian banks and fund administrators now acting as resellers for StatPro Revolution, augmenting StatPro direct sales team

·; Re-orientation of the business in January 2012 to focus sales fully on cloud technology, following early success with the StatPro Revolution service

·; Next StatPro Seven upgrade will be StatPro Revolution Plus - first module due for release in 2013

* Adjusted EBITDA and adjusted earnings per share are EBITDA and earnings per share after adjustment for amortisation of acquired intangibles, share based payments and exceptional items (notes 5 and 7)

** Annualised recurring contract revenue is revenue contractually committed at year end. Comparative is at constant currency.

Justin Wheatley, Chief Executive, commented: 

"The transition from traditional software to cloud based software requires investment but also offers considerable opportunity for growth and profits. With nearly £30 million of contracted annual recurring revenue and high levels of cash generation we enjoy a strong financial platform on which to build. We believe that our early investment in cloud technology has given us a clear technology advantage in our market and we believe we will benefit strongly from this position over the coming years.

"We have achieved our key objective for 2011 with the successful commercial launch of StatPro Revolution and with over 60 clients already signed up and many more in the pipeline, the potential is evident and our focus in 2012 will be entirely on StatPro Revolution. The unique nature of the service and strong uptake to date, mean that despite the ongoing financial and economic crisis, we look forward to 2012 with great confidence."

- Ends -

For further information, please contact:

A briefing for analysts on the results will be held at 9.30am today at the offices of

Newgate Threadneedle, 3rd Floor, Aldermary House, 10-15 Queen Street, London, EC4N 1TX

About StatPro

StatPro is a global provider of portfolio analytics for the investment community. Our cloud based services provide vital analysis of portfolio performance, attribution and risk for hundreds of fund managers, RIAs, CEOs, heads of risk, sales directors, marketing managers and authorised corporate directors. They are now using our cloud services and software products to perform sophisticated analysis, reporting and distribution every day.

With 18 years of experience and expertise, we believe analytics should be sophisticated yet simple and useful as well as secure. StatPro data coverage includes global equities, global bonds, global mutual funds, most families of benchmarks, FX rates, sector classifications and much else besides.

StatPro has operations in Europe, North America, South Africa, Asia and Australia and more than 300 clients in 25 countries around the world.

StatPro has grown its recurring revenue from less than £1 million in 1999 to £29 million at end December 2011 and currently enjoys a renewal rate of approximately 92%. StatPro floated on the London Stock Exchange in May 2000 and transferred its listing in June 2003 to AIM. The Company has operations in Europe, North America, South Africa and Australia, with approximately 80% of recurring revenues being generated outside the UK.

Chief Executive's Review

Overview

We have achieved our key objective for 2011 with the successful commercial launch of StatPro Revolution. The transition from traditional software to cloud based software requires investment but also offers considerable opportunity for growth and profits. StatPro Revolution permits us to sell into a far broader market than was previously possible, both in terms of geography and sector. Sales to date of StatPro Revolution show that the service is applicable to a wide variety of companies. With over 60 clients already signed up and many more in the pipeline, the potential is evident. We believe that our early investment has given us a clear technology advantage in our market and we believe we will benefit strongly from this position over the coming years.

Financial Highlights

Adjusting for the revenue contribution from the Johannesburg Stock Exchange ("JSE") contract in 2010, our revenues in 2011 of £31.72 million were broadly similar to last year (2010: £33.13 million, including £1.76 million from JSE). However, increased investment in StatPro Revolution continued to impact profits with the adjusted EBITDA down 28% to £6.12 million (2010: £8.45 million). Nevertheless, cash flow from operating activities (before exceptional items) remained strong at £10.37 million (2010: £10.66 million) and as a result net debt at 31 December 2011 reduced to £3.40 million (2010: £5.52 million).

Our recurring revenue also remained buoyant at £29.41 million (2010: £28.35 million) with a welcome contribution from StatPro Revolution of £0.47 million on an annualised basis. Renewal rates remained strong at 92% (2010: 92%) although consulting revenue dipped to £1.93 million (2010: £2.28 million). This was in part because we have moved more clients to our hosted environment with 42% of customers by value now having made the transition (2010: 30%).

Our revenue base remains very secure with 78% (2010: 84%) of contracts running beyond the end of 2012 with an average committed contract length of 17 months (2010: 18 months). This gives us a solid base from which to plan our investments and manage our business.

Regional Performance

Our main markets of North America and Europe remained stable. As expected, both markets continue to be impacted by the ongoing financial and economic crisis which impeded growth. We opened an office in Hong Kong in September 2011 from which we plan to sell StatPro Revolution into the Asian market.

The reception we have received for StatPro Revolution in all markets has been very strong. For most of 2011 the sales team was tasked with selling StatPro Seven as well as StatPro Revolution. In 2012, following early success with StatPro Revolution, we focused all sales teams on StatPro Revolution only. There are currently 27 members of the sales team and we hope to increase that during 2012 to take advantage of the many opportunities available.

Products

At the beginning of 2012 we decided to focus our development resources on our cloud based solutions. As a result, the next upgrade to StatPro Seven will be StatPro Revolution Plus, which will be launched progressively with the first module due for release in 2013. StatPro Revolution Plus, like its predecessor StatPro Seven, will be focused on the production of transaction based performance measurement to meet regulatory requirements for client reporting, the key advantage being the speed and scale to which StatPro Revolution Plus can operate as well as offering outstanding value. This refocusing has enabled us to reduce our operating expenditure by approximately £1.6 million per annum and as a result we will be taking a one-off charge of approximately £0.8 million in the first half of 2012.

StatPro Revolution is upgraded every six weeks and the improvements to functionality and data coverage have been extraordinary over the last 12 months. We will be launching our online store in the first half of 2012 and, as a result, our clients will be able to buy access to StatPro Revolution at any time using just a credit card. We are also significantly increasing our coverage of assets from approximately 500,000 to several million as we add in broader fixed income coverage. The new fixed income service will mean that StatPro Revolution will offer some of the best analytics for bond funds available anywhere at an unbeatable price. The combination of strong equity and fixed income analysis is powerful and will help us grow our share of a vast market for analysis of balanced funds.

Strategy

A key sales strategy is to partner with custodian banks and fund administrators who can act as resellers of the StatPro Revolution service. We now have seven such organisations promoting the service with an aim to grow this distribution channel. We are also targeting our existing clients of StatPro Seven to use StatPro Revolution in addition to their existing services. Finally we are using Telesales to approach prospects in the large US Registered Investment Advisor (RIA) market where there are over 30,000 companies. Together we have over 60 clients using StatPro Revolution and growing rapidly as we have a broad geographic spread of clients and prospects.

People

StatPro is a people business and we have some really remarkable people working together to make StatPro not only a successful company but also a great place to work. I would like to thank everyone in StatPro for their contribution in 2011.

Dividend

In line with our policy of paying a progressive dividend that aims to balance return to investors with our investment needs, we are pleased to announce an increase in our full year dividend to 2.6p per share for 2011 from 2.4p in 2010.

Outlook

StatPro has made a good start in 2012 and we aim to focus on StatPro Revolution in the course of 2012 to drive our growth and profits in future years. StatPro Revolution is an innovative product that can appeal to a broad market many times the size of StatPro's traditional market thus providing StatPro with a truly unique opportunity. For this reason, despite the ongoing financial and economic crisis, we look forward to 2012 with great confidence.

Justin Wheatley

Chief Executive

Financial Review

Overview

The Group increased its investment in StatPro Revolution, which was launched in 2011, and our strategy now is to focus all our development and sales efforts on cloud-based products and services. The new recurring revenue stream for StatPro Revolution amounted to US$0.73 million (£0.47 million) by the end of December 2011 (2010: nil). Adjusted EBITDA overall was lower at £6.12 million (2010: £8.45 million) after taking into account the net expenditure on StatPro Revolution and the loss of the JSE contribution, which was disposed of in 2010. However, the StatPro Seven and data products achieved 11% increase in underlying adjusted EBITDA, as shown in the table below. The Group was thus able to achieve a solid adjusted EBITDA margin of 19.3% (2010: 25.5%) in a year of significantly increased investment.

We continue to focus on good operating cash management and we achieved a further reduction in net debt from £5.52 million to £3.40 million at the end December 2011.

Key performance indicators for the business

The key performance indicators ("KPIs") that are monitored by the Board, and by the Group Executive Board as part of the regular monthly management reporting, are:

*at constant currency

The KPIs are discussed in detail below in the relevant sections of this Financial Review.

Revenue

Revenue by segment

Revenue fell in the EMEAA region by 5% (2010: 10% growth) mainly due to the disposal of the JSE contract. In the North American region revenue fell by 4% (2010: 3%) mainly due to lower professional fees. The analysis of revenue by region was as follows:

Revenue by product/service

StatPro achieved a 1% increase in underlying revenue for Seven and Data products as shown below, despite a fall in professional fees of 15%.

Mainly as a result of the disposal of the JSE contract in 2010, the overall Group revenue fell by 4% (2010: increase of 5%) to £31.72 million (2010: £33.13 million).

Revenue by type

Software licence revenue grew by 2% to £25.18 million (2010: £24.64 million) and data fees also increased by 4% to £4.61 million (2010: £4.45 million). Professional services revenues decreased by 15% to £1.93 million (2010: £2.28 million). The impact of currency movements was minimal.

The split of revenue for the year by type was as follows:

Recurring revenue

The Group's business model of Software as a Service ("SaaS") and recurring revenue contracts continues to provide excellent visibility of revenue with the recurring revenue element being a high percentage (94%) of total revenue (2010: 93%). The annualised recurring revenue from software licences and data fees at the end of December 2011 was £29.41 million (2010: £28.35 million at constant currency). New contracts signed in the year amounted to £3.47 million (2010: £3.40 million) and the renewal rate remained high at 92% (2010: 92%).

Approximately 70% of new recurring contracted revenue arose from existing clients (2010: 63%). The proportion by value of recurring software licences and data clients at the end of 2011 secured to the end of 2012 or beyond amounted to 78% (2010: 84%); the weighted average length of contracts committed was 17 months (2010: 18 months).

Operating expenses (before amortisation of intangible assets and exceptional items) increased by 2% to £24.03 million (2010: £23.48 million), and the impact of currency movements was minimal. The average number of employees increased by 7% to 266 (2010: 248) and we ended 2011 with 280 employees (2010: 251). In September 2011, we opened an office in Hong Kong as a springboard for our sales efforts in Asia.

Following a restructuring in January 2012 to focus on cloud technology and reduce costs (see subsequent event below) we have 257 employees as of 1 March 2012.

Adjusted operating margin

As a result of increased investment in our products and the loss of the JSE contract contribution described above, the operating profit reduced in 2011 to £4.49 million (2010: £6.33 million). The adjusted operating profit reduced by 31% year on year to £5.06 million (2010: £7.35 million) as shown in note 5, with the adjusted operating margin reducing to 15.9% (2010: 22.2%). The adjusted EBITDA (note 5) fell by 28% to £6.12 million (2010: £8.45 million).

Research and development and capex

In 2011, total research and development expenditure reduced overall by 7% to £5.01 million (2010: £5.40 million), equating to 16% of Group revenue (2010: 16%), but we increased our expenditure on cloud computing and, in particular, StatPro Revolution. The total expenditure on StatPro Revolution including marketing and other costs incurred in 2011 amounted to £3.32 million (2010: £2.19 million), which had a profit impact in the year of approximately £2.54 million (2010: £0.83 million), after taking into account associated revenue and the capitalisation of development costs.

Of the total spend incurred on R&D, £3.45 million was capitalised (2010: £3.21 million). Amortisation on internal development also increased to £2.64 million (2010: £2.34 million). Total capital expenditure on property plant and equipment, which relates predominantly to investments in data centres and related equipment, amounted to £0.99 million (2010: £0.94 million).

Finance income and expense

Net finance expense reduced to £0.63 million (2010: £0.71 million) as a result of lower overall net debt.

Profit before tax

Profit before taxation in 2011 decreased by 31% to £3.86 million as a result of exceptional items (2010: £5.62 million). After adjusting for amortisation of acquired intangibles, share based payments and exceptional items, the adjusted profit before taxation reduced by 33% to £4.43 million (2010: £6.64 million). The impact of currency movements, which was not material, increased profit before taxation by £0.08 million (i.e. approximately 2% impact).

Taxation

The tax charge amounted to £0.96 million (2010: £1.48 million) giving an effective tax rate of 25% (2010: 26%).

Earnings per share

Basic earnings per share decreased by 29% to 4.8p (2010: 6.8p). Diluted earnings per share decreased to 4.7p (2010: 6.6p) based on 1.02 million (2010: 1.58 million) potentially dilutive shares outstanding. Adjusted earnings per share (note 7) reduced by 30% to 5.7p (2010: 8.2p).

Balance Sheet

The Group's net assets increased to £43.83 million at 31 December 2011 (2010: £43.13 million). This increase was mainly as a result of the net profits attributable to equity shareholders of £2.91 million, offset by net exchange losses (principally related to revaluation of goodwill) through reserves of £0.79 million and dividends paid.

Non-current and current assets

Net movement on goodwill was a reduction of £0.93 million (2010: increase of £5.08 million) relating to the revaluation to year end exchange rates (2010: increase of £3.78 million). In 2010 the other movement related to the estimate of the additional investment in SiSoft (£1.31 million). The carrying value for goodwill arising on all acquisitions has been reviewed and there have been no impairments. The increase in intangible assets of £0.60 million (2010: £0.64 million) predominantly relates to net investment in internal development. The level of current assets decreased to £8.79 million (2010: £9.90 million). Trade debtors, the largest component of debtors, reduced to £4.19 million at the end of 2011 (2010: £6.04 million) partly as a result of better cash collection. The level of cash and cash equivalents increased to £2.45 million (2010: £0.87 million).

Current and non-current liabilities

The largest component of current and non-current liabilities was deferred income, a non-cash liability, of £13.17 million (2010: £13.76 million).

Cash flow and financing

2011 was another year of positive cash generation with cash inflow from operating activities (before exceptional payments) of £10.37 million (2010: £10.66 million). In 2010, the operating cash flow included approximately £1.37 million from the JSE contract. Whilst increasing the dividend we have maintained a level of dividend cover (free cash flow: cash dividends) of over 2.5 times (2010: 3.4).

Share capital and reserves

In 2011, 0.60 million shares were issued (2010: 0.27 million) and the issued share capital was £0.62 million (2010: £0.61 million) representing 61.55 million shares of 1p nominal value (2010: 60.95million). The Company completed the process of exchanging the remaining exchangeable shares in StatPro Canada that arose from the FRI acquisition in 2006 thus issuing 0.52 million shares, which is included in the shares issued figure above. The Company continues to hold a balance of 225,000 shares in treasury at 31 December 2011 (2010: 225,000). As a result of these share transactions, the share premium account has increased to £17.68 million (2010: £17.18 million).

Dividends

The directors are recommending a final dividend for 2011 of 1.85p per share (2010: 1.7p) making a total dividend for 2011 of 2.6p per share (2010: 2.4p). It is intended to pay the final dividend on 23 May 2012 to all shareholders on the register at the close of business on 20 April 2012. Total dividends paid in 2011 amounted to £1.50 million (2010: £1.35 million). The Board intends to maintain a progressive dividend policy reflecting the balance between the investment needs of the business and the growth in underlying earnings per share, while maintaining a minimum cash dividend cover.

Subsequent Event

There is an increasing demand by clients who want to migrate to cloud technology away from traditional software, and given our increased confidence in StatPro Revolution's commercial potential, the Board decided to accelerate our plans to invest in cloud technology and focus all our sales efforts on StatPro Revolution. As a result of these decisions, we have restructured our business organisation and this will result in a reduction in our ongoing operational costs by approximately £1.6 million per annum. There will be a one-off cost associated with the restructuring of approximately £0.8 million, which will impact the H1 2012 interim accounts.

Principal risks and uncertainties

The principal business risks and uncertainties affecting the Group will be described in the Annual Report. For each category of risk, the directors have identified means by which the risk can be managed or reduced in a cost effective way, whilst accepting that some risks cannot be completely eliminated.

Andrew Fabian

Finance Director

GROUP INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2011

GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2011

*Restated for prior year adjustment per Note 1

GROUP BALANCE SHEET AS AT 31 DECEMBER 2011

*Restated for prior year adjustment per Note 1

GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2011

GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011

Other reserves include merger reserves of £2,369,000 (2010: £2,369,000), and translation reserve of £9,391,000 (2010: £10,182,000). The merger reserve arose on acquisitions and represents the difference between the fair value of shares issued and the nominal value of the shares. The translation reserve incorporates the gains and losses on revaluation of the net assets and liabilities of subsidiary undertakings and other currency gains and losses that are treated as part of equity.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

1. Announcement

This announcement was approved by the Board of directors on 13 March 2012. The preliminary results for the year ended 31 December 2011 are unaudited. The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 31 December 2010. The financial information set out in the announcement has been prepared on the basis of the accounting policies set out in the statutory accounts of StatPro Group plc for the year ended 31 December 2010. This condensed consolidated financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The auditor's report on the financial statements for the years ended 31 December 2010 was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The financial statements for the year ended 31 December 2010 have been delivered to the Registrar of Companies.

Restatement

The financial statements have been restated to correct prior period deferred tax liabilities in respect of the following:

1. Fair value adjustments on acquisition of development costs and customer contracts; and

2. Timing differences on internally generated intangible assets, specifically capitalised research and development costs.

The restatement resulted in an increase in goodwill on acquisition of £984,000 at 1 January 2010, and the creation of a deferred tax liability of £1,574,000. The impact to reserves was a reduction in retained earnings of £652,000 and an increase in the foreign exchange reserve (within other reserves) of £62,000.

At 31 December 2010, goodwill on acquisition increased by £1,034,000 (previously reported as £52,583,000) and the deferred tax liability increased to £1,622,000 (previously reported as nil). The impact to reserves was a decrease in retained earnings of £677,000 (previously reported as £13,190,000) and an increase in the foreign exchange reserve (within other reserves) of £89,000 (previously reported as £12,462,000). The impact on profit for the year ended 31 December 2010 was a reduction of £25,000 to £4,141,000 (previously reported as £4,166,000).

The resultant impact to earnings per share is disclosed in note 7.

2 Segmental information

The Group's operating segments have been determined based on the information regularly reviewed by the Group Executive Board, which has been identified as the Chief Operating Decision Maker ("CODM"). The Group Executive Board considers the business to be split into two primary geographical markets: EMEAA and North America, which are each managed by a regional CEO. Central costs relate to the expenses related to the Group's headquarters and costs directly associated with the parent Company, which are managed by the Group management team. The exceptional item relating to the software disposal in 2010 is included under Central. The external debt is held within Central.

All revenue, profit/(loss) before taxation and total assets are attributable to the principal activity of the Group, being the development, marketing and distribution of software, data solutions and related professional services to the global asset management industry. Segment assets represent those assets arising from the operating activities of those segments. Segment results exclude the impact of any intercompany recharges of revenues or costs.