StatPro Regulatory News (SOG)

STATPRO GROUP PLC

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

Interim results for the six months ended 30 June 2011

StatPro Group plc (AIM: SOG), the AIM listed provider of portfolio analytics and data solutions for the global asset management industry, announces its interim results for the six months ended 30 June 2011.

Financial Highlights:

·; Annualised recurring revenue contract value* up 3% to £29.66 million (2010: £28.73 million) with renewal rate of 91% (2010: 90%)

·; Recurring revenue in the period amounted to 94% of total revenue (2010: 93%)

·; Adjusted EBITDA and adjusted earnings per share reduced in period as a result of:

o disposal of Johannesburg Stock Exchange ("JSE") contract, (2010: £0.82 million contribution)

o increased net expenditure on StatPro Revolution to £1.45 million (2010: £0.20 million)

·; Net debt reduced to £5.15 million (2010: £6.31 million)

·; Interim dividend increased by 7% to 0.75p (2010: 0.7p) reflecting Board's confidence in the future prospects of the business

Operating Highlights:

·; Good progress on StatPro Revolution, our new innovative cloud-based portfolio analysis and research service, following its official launch in March 2011:

o Increased trial users leading to over 20 client contracts with an aggregate of over 200 portfolios

o 5 marketing launch events in key markets leading to increased web traffic

o Increased marketing of StatPro Revolution also having beneficial impact on sales leads for StatPro Seven

·; Percentage of analytics clients on hosted StatPro Seven platform increased to 34% (2010: 24%)

* at constant currency

** Adjusted profit before tax, adjusted earnings per share, adjusted operating profit and adjusted EBITDA are profit before tax, earnings per share, operating profit and EBITDA after adjustment for amortisation of acquired intangibles, share based payments and exceptional items (notes 2, 4 and 5)

Commenting on the results, Justin Wheatley, Chief Executive of StatPro said: "We remain focused on building both our StatPro Revolution business and our StatPro Seven hosted business. With nearly £30 million in recurring revenues, healthy profits and strong operating cash flow, we continue to enjoy a sound financial position. This, combined with the new products and additional functionality we have built in recent years, puts StatPro in a very strong position for future growth. We therefore remain confident of a successful outcome for the year and firmly believe the future prospects of the Group to be extremely exciting."

- Ends -

For further information, please contact:

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

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

About StatPro

StatPro is a leading provider of portfolio analytics and data solutions for the global asset management industry. The Company sells a SaaS-based Analytics and Data platform on a rental basis to investment management companies allowing them to analyse portfolio performance, attribution, risk and GIPS® compliance. StatPro also provides market data and valuation feeds including a Complex Asset Pricing service.

StatPro has grown its recurring revenue from less than £1 million in 1999 to £30 million at end June 2011 and currently enjoys a renewal rate of approximately 91%. 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

Highlights

We are very pleased with the progress we have made so far with our new service StatPro Revolution. We launched the service in March this year and we have already signed up over 20 clients with over 200 portfolios between them and we have also seen evidence that the sales cycles for StatPro Revolution are shorter than those typically experienced for StatPro Seven. Our successful marketing activity has led to meetings with many more prospects and we are developing an encouraging pipeline of potential new business. A further positive aspect is that we have seen an increase in interest in StatPro Seven as a result of our additional marketing of StatPro Revolution.

The high level of investment we are making in StatPro Revolution, coupled with the disposal of the JSE contract, have, as expected, resulted in a reduction in our revenues to £15.61 million (2010: £16.63 million) and reduced our profit before tax to £1.79 million (2010: £3.59 million). We continue to enjoy a positive operating cash flow and reduced net debt to £5.15 million at 30 June 2011 (2010: £6.31 million) while continuing to invest in the business.

StatPro Seven

Continued uncertainty in the financial markets has made decision making by some prospects slower especially in regards to StatPro Seven and it is possible that this uncertainty will last for some time. However, we have won some significant contracts in the first half of 2011, especially in Europe. Renewal rates remain strong at 91% or better and this forms the bedrock of our business. We also continue to make progress in moving our clients to our hosted platform with 34% of clients by value now on the hosted StatPro Seven service (2010 H1: 24%).

Drivers for new business continue to be regulations such as UCITS IV relating to risk management, where our expertise in liquidity risk, as well as value at risk, is proving key. Another driver is the need for clients to communicate better and faster and sell into increasingly competitive and fragile markets.

We have continued to invest in additional functionality for our StatPro Seven platform, and now have the ability to automatically produce risk figures for any type of bond. We believe this should prove a valuable source of additional revenue for our fixed income analytics business in StatPro Seven as well as for StatPro Revolution. This new service once again underscores the considerable IP that StatPro possesses as a business.

StatPro Revolution and Cloud Technology

We are very pleased with our progress with StatPro Revolution having generated over 20 new clients and over 200 portfolio sales since its launch in March 2011. It is clear that there is an appetite for using Revolution as a communication tool to help support the sales process as well as giving more transparency to all involved in managing, supporting and analysing their portfolios. We have seen a marked increase in levels of interest following the various events we have held and a steady rise in web-based traffic which has more than doubled since the end of December 2010 with over 800 prospects having taken up trials of the service.

It is our opinion that our early move to both a hosted platform for StatPro Seven and our cloud based SaaS offering, StatPro Revolution, positions our business well for the future. Clients want greater flexibility, better communication power and the possibility to harness the new social media tools that have been developed in the consumer market and have now been adapted for business. In the past, our industry used to focus on how to calculate the numbers, whereas now the focus is on how to communicate the numbers and we are leading the field in this change. As far as we are aware, StatPro Revolution remains a unique offering in our sector and it has certainly broadened our potential market significantly.

Investment

We are both increasing our development team for StatPro Revolution allowing us to add further functionality to the service and increasing our sales teams in all regions. During the second half we expect to increase the global marketing and sales team to approximately 36 from 27 at the beginning of the year. We also intend to increase the general marketing expenditure for events and online marketing and are building up our capabilities in data.

Outlook

We remain focused on building both our StatPro Revolution business and our StatPro Seven hosted business. With nearly £30 million in recurring revenues, healthy profits and strong operating cash flow, we continue to enjoy a sound financial position. This, combined with the new products and additional functionality we have built in recent years, puts StatPro in a very strong position for future growth. We therefore remain confident of a successful outcome for the year and firmly believe the future prospects of the Group to be extremely exciting.

Justin Wheatley

Chief Executive

FINANCIAL REVIEW

Overview

The first six months of 2011 was a significant period of development for StatPro. We increased expenditure on developing, supporting and marketing our new cloud-based service StatPro Revolution to £1.45 million in the period (2010: £0.20 million) while remaining profitable and cash-generative. Overall revenue and profits for H1 2011 are in line with our expectations but lower than the comparative period, as previously indicated, as we are no longer benefiting from the contribution from the Johannesburg Stock Exchange ("JSE") contract, having accelerated the conclusion of that transaction in 2010. Gaining new software clients in the current markets remains challenging but nevertheless we have managed to increase overall recurring annualised contracted revenue, our key performance indicator, to £29.66 million (June 2010: £28.73 million at constant currency).

Our net debt reduced to £5.15 million at 30 June 2011 (June 2010: £6.31 million) at a time of increasing capital expenditure and dividends.

Revenue

Revenue reduced by 6% to £15.61 million (2010: £16.63 million); at constant currency the revenue would have reduced by 7%. Overall recurring revenue during the period fell by 6% as a result of the termination of the JSE contract, and data fee revenue was 1% lower. Excluding the impact of the JSE contract revenue which was disposed of in 2010 as shown in the table below, software analytics revenue increased by 2%; Recurring revenue in the period amounted to 94% (2010: 93%) of total revenue.

New recurring business signed in H1 2011 was satisfactory and the level of cancellations was in line with our internal budgets with a renewal rate of approximately 91% (2010: 90%).

The split of revenue by type was as follows:

Recurring revenue

The annualised value of contracted recurring revenue increased by 3% to £29.66 million at 30 June 2011 from £28.73 million at 30 June 2010 and by 1% from £29.35 million (at constant currencies) at 31 December 2010 as illustrated:

FINANCIAL REVIEW (continued)

The proportion by value of recurring software licences on multi-year contracts (licence agreements with more than one year remaining contractually committed) was 80% at the end of June 2011 (2010: 80%). New business from existing clients was 73% (2010: 65%) and the proportion of software clients on our SaaS solution increased to 34% (2010: 24%). Professional services revenue was lower by 15%, reflecting challenging markets and also a tendency to a lower level of consulting associated with implementing our SaaS offering.

StatPro Revolution

The key strategic objective for StatPro in 2011 remains the successful launch and promotion of StatPro Revolution, our innovative cloud-based portfolio analysis and research service, and we are pleased to report that we have made good progress in the first three months following the launch as follows:

o 5 marketing launch events in key markets leading to increased web traffic

o Increased trial users leading to over 20 client contracts with an aggregate of over 200 portfolios

o Increased marketing of StatPro Revolution also having beneficial impact on sales leads for StatPro Seven

Whilst the revenue for StatPro Revolution in the period was immaterial and it is therefore still too early to quantify or confirm any trends, we are seeing good levels of initial interest and it appears that sales cycles for StatPro Revolution are shorter than those typically experienced for StatPro Seven.

Operating expenses

Operating expenses (before amortisation of intangible assets and exceptional items) increased by 2% to £12.10 million in the first half of 2011 (2010: £11.80 million), although at constant currency the increase was 1%. The main areas of increased expenditure relate to a larger sales team and increased expenditure on StatPro Revolution development, marketing and data.

Employees

The average number of employees during the first six months of 2011 increased by 3% to 256 compared with 249 in the first half of 2010. The number of employees currently in the Group is 264 employees, situated in ten offices in Europe, North America, South Africa and Australia. We plan to open our Asian office based in Hong Kong in September 2011.

Investment in intangible assets

We increased our investment in research and development, in particular on StatPro Revolution, and this resulted in an increased level of investment in intangible assets of £1.69 million (2010: £1.44 million). The amortisation of intangibles (excluding acquired intangibles) also increased year on year to £1.23 million (2010: £1.17 million).

Earnings before interest, tax, depreciation and amortisation

As a result of increased investment in StatPro Revolution of £1.45 million (2010: £0.20 million) and also the impact of the loss of the JSE contract disposed of in 2010 (2010: £0.82 million contribution), the adjusted EBITDA in H1 2011 reduced to £2.89 million (2010: £4.21 million). Nevertheless, the core business continues to generate a solid positive operating cash flow.

Finance income and expense

The net financing expense reduced slightly to £0.31 million (2010: £0.33 million) as the level of net debt reduced although effective interest rates, while remaining historically low, were marginally higher than the prior period.

Profit before taxation

Profit before tax reduced by 50% to £1.79 million from £3.59 million and adjusted profit before tax reduced by 37% to £2.11 million (2010: £3.36 million), both measures being impacted by the investment in StatPro Revolution and also the impact of the disposal of the JSE contract.

Taxation

The total tax charge amounted to £0.51 million (2010: £0.83 million), giving an underlying rate of tax of approximately 28% (2010: 23%). The Group has now recognised or utilised available historic tax losses and therefore will incur a full tax charge which is higher than the UK rate due to higher overseas tax rates and some overseas tax losses not being recognised. Nevertheless, the cash tax was lower than the charge. The level of deferred tax asset increased to £0.80 million (Dec 2010: £0.70 million) as a result of a deferred tax credit.

Earnings per share

The investment in StatPro Revolution, disposal of the JSE contract and a higher tax rate all impacted earnings in the period compared to the comparative period and basic earnings per share reduced to 2.1p (2010: 4.5p) and adjusted earnings per share reduced to 2.6p (2010: 4.4p). The average number of shares in issue in the period were virtually unchanged at 60.76 million (2010: 60.65 million). The diluted earnings per share were 2.1p (2010: 4.4p) based on potentially dilutive shares outstanding of 1.35 million (2010: 1.73 million).

Cash flow

Cash inflow from operating activities (excluding exceptional items) during the first six months of 2011 amounted to £4.66 million (2010: £6.24 million). Working capital in H1 2011 amounted to an inflow of £0.57 million (2010: £0.86 million) and was lower than H1 2010 which benefited from the advance payment under the JSE contract (which totalled £2.5 million including the software disposal proceeds). The operating cash flow in H1 2011 was also impacted by exceptional items of £0.42 million (2010: nil) following the restructuring in 2010.

In the period to end June 2011, we paid a final dividend for 2010 of 1.7 pence per share (£1.04 million). In the comparative period, we paid a second interim and a final dividend of a total of 1.5 pence per share (£0.92 million).

Balance sheet

The Group's net assets increased to £44.13 million at June 2011 (Dec 2010: £43.72 million). The level of trade and other receivables, of which the major component is trade debtors, reduced to £6.01 million (Dec 2010: £7.91 million). There was a reduction in net debt to £5.15 million at 30 June 2011 from £5.52 million at December 2010 and £6.31 million at 30 June 2010.

The major component of creditors is deferred income, a non-cash liability, which amounted to £12.75 million (Dec 2010: £13.76 million). Provisions of £1.94 million at 30 June 2011 (Dec 2010: £2.31 million), relate to deferred contingent consideration for the acquisition of the non-controlling interest in SiSoft Sarl, onerous contracts and the restructuring provision.

Share capital and treasury stock

During the period, 77,200 shares were issued. In order to reduce dilution, options over a total number of 127,000 shares were partly net settled resulting in a payment including tax liability of £0.52 million and the issue of 11,117 shares. As at 30 June 2011, there were 61,029,432 shares (Dec 2010: 60,952,232 shares) in issue including 225,000 held in treasury (60,804,432 excluding treasury shares). The treasury shares will not accrue dividends and are excluded from the earnings per share calculation.

Interim dividend

The directors have declared an increased interim dividend of 0.75 pence per ordinary share (2010: 0.7 pence), which will be paid on 2 November 2011 to shareholders on the register at the close of business on 7 October 2011, reflecting the Board's confidence in the business prospects. The Board intends to maintain a progressive dividend policy reflecting the balance between the investment needs of the business and maintaining an appropriate dividend cover.

Principal risks and uncertainties

The directors continue to evaluate the principal business risks and uncertainties affecting the Group and further discussion of the principal risks and uncertainties can be found on pages 33 to 35 of the 2010 Annual Report.

Andrew Fabian

Finance Director

* Other reserves includes merger reserve of £2,369,000 (2010: £2,369,000) and translation reserve of a surplus of £10,219,000 (2010: £8,019,000). 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 presented in equity.

Notes to the interim financial information

1. This interim report was approved by the Board of directors on 2 August 2011. The financial information set out in this interim report has been prepared under IFRS as adopted by the European Union and on the basis of the accounting policies set out in the statutory accounts of StatPro Group plc for the year ended 31 December 2010, amended as explained below. The following new standards, amendments to standards and interpretations are mandatory for the first time in the current period and have no significant impact on the Group consolidated results or financial position.

This report is not prepared in accordance with IAS 34, which is not mandatory. This interim report has not been audited but has been reviewed in accordance with ISRE 2410 by the Company's auditors Ernst & Young LLP. The financial information does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. Statutory accounts for StatPro Group plc for the year ended 31 December 2010 reported under IFRS have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. Copies of this report will be posted or provided electronically to shareholders. Further copies are available free of charge on request from the Company Secretary at the Company's registered office, StatPro House, 81-87 Hartfield Road, London SW19 3TJ.

2. Earnings per share.

Basic earnings per share has been calculated based on the profit after taxation and minority interests of £1.28 million (2010: £2.73 million) and the weighted average number of shares of 60.76 million (2010: 60.65 million). The diluted earnings per share were 2.1p (2010: 4.4p) based on potentially dilutive shares outstanding of 1.35 million (2010: 1.73 million).

Adjusted earnings per share are shown in the table below.

3. Revenue analysis

Revenue for the period is analysed as follows:

4. Exceptional items

In H1 2010, the Company made an exceptional gain on disposal of software of £0.50 million, being the difference between the cash received for the software element (£1.10 million) and the carrying value and associated costs of the software (£0.60 million), following the disposal of non-core software and related services under the JSE contract for a total consideration of £2.50 million.

The exceptional restructuring cost of £0.96 million in the second half of 2010 relates to severance payments, and onerous leases, following a restructuring to re-focus the business on SaaS. The cash outflow in 2010 amounted to £0.14 million. There were no operating exceptional items in 2011. The cash outflow of £0.42 million in H1 2011 related to an exceptional cost provision.

.

5. Adjusted profit before taxation, adjusted operating profit margin, and adjusted EBITDA

a) Adjusted profit before taxation

b) Adjusted operating profit

c) Adjusted EBITDA

6. Cash flow - reconciliation from statutory heading to business performance measures

a) Cash generated from operations 

b) Free cash flow

7. Reconciliation of profit before tax to net cash inflow from operating activities

8. Reconciliation of net cash flow to movement in net debt