StatPro Regulatory News (SOG)

30 Jul 2007 07:01

Statpro Group PLC30 July 2007 For release at 07.00 a.m. Monday, 30 July 2007 STATPRO GROUP PLC ("StatPro", the "Group", or the "Company") Interim results for the six months ended 30 June 2007StatPro Group plc, the AIM listed provider of portfolio analytics and datasolutions for the global asset management industry, announces its interimresults for the six months ended 30 June 2007. Six months ended Six months ended Change 30 June 2007 30 June 2006 Turnover £11.32 million £6.33 million +79%Profit before tax £1.86 million £0.82 million +126%Operating margin 20.2% 12.4% +63%Earnings per share 3.0p 2.0p +50%- basic- diluted 2.9p 2.0p +45%Dividend per share(proposed interim) 0.45p 0.3p +50% FRI integration completed: • Agreement signed for additional revenue with Accenture on major systems project amounting to US$1.8 million (£0.90 million) • Agreement on working capital balance on FRI acquisition resulting in C$1.0 million (£0.47 million) benefit • Transfer of non-core real time data business to Tenfore Systems Limited for consideration of up to US$2.5 million (£1.25 million) expected to be completed by year end • Acquisition of Initram Data Inc. completed in July 2007 for C$3.0 million (£1.41 million) payable over two years to consolidate strong Canadian bond data market position • Automation of data feed into StatPro product suite achieved on target Financial highlights: • Operating margin target of 20% achieved • Recurring annualised revenue increased to £18.8 million (Dec 2006: £17.7 million) • Significant increase in professional services revenue to £2.00 million (2006: £0.96 million) • Continued strong cash generated from operations amounting to £2.89 million (2006: £1.95 million) Commenting on the results, Justin Wheatley, Chief Executive of StatPro said: "Given the transformation of our product set we are very confident about ourprospects. We remain focused on maintaining the strong financial discipline thathas helped us grow so successfully whilst balancing the needs for investment tosustain long term growth. We aim to maintain our recent rate of organic growthand our strong cash generation will help us systematically pay down our debtthus strengthening our balance sheet, providing us with the flexibility torespond to any opportunities that may arise. We look forward to the second halfof 2007 and beyond." - Ends - For further information, please contact: StatPro Group plc www.statpro.comJustin Wheatley, Chief Executive On 30 July: 020 7360 4900Andrew Fabian, Finance Director Thereafter: 020 8410 9876 SmithfieldReg Hoare/Tania Wild 020 7360 4900 Arbuthnot Securities LimitedTom Griffiths/Alasdair Younie 020 7012 2000 A briefing for analysts will be held at 9.15 for 9.30am today at the offices of Smithfield, 10 Aldersgate Street, London, EC1A 4HJ High resolution images are available for the media to view and download free ofcharge from www.vismedia.co.uk About StatProStatPro Group plc is a leading provider of portfolio analytics and datasolutions for the global asset management industry. Over the past 13 years,StatPro has developed its products in close collaboration with internationalasset managers and can offer sophisticated portfolio analytics tools for riskmanagement, fixed income analysis, performance measurement, attributionanalysis, GIPS compliance and reporting. StatPro has over 400 client contractsin 25 countries, with 11 offices worldwide. StatPro has grown its recurringrevenue from less than £1.0 million in 1999 to £18.8 million in 2007. CHIEF EXECUTIVE'S REVIEW HighlightsThe first half of 2007 has been an extremely active and successful period forStatPro. Our financial results are significantly ahead of last year and FRICorporation ("FRI", now StatPro Canada Inc.) is now fully integrated withStatPro. This means that we are now ready to launch new products starting inSeptember 2007 through to January 2008, representing an exciting opportunity toincrease sales. PerformanceRevenue for the first half of 2007 was up 79% to £11.32 million (2006: £6.33million), profit before tax was up 126% to £1.86 million (2006: £0.82 million)and basic earnings per share were up 50% to 3.0p (2006: 2.0p). We have alsoachieved our objective of delivering an operating margin of over 20% (2007:20.2% versus 2006: 12.4%). This performance is the result of our business modelthat is based upon recurring revenues from software and data contracts. Sales have remained strong in Europe, UK, North America and South Africa withthe current focus on our existing product set being sold to existing and newclients. Our organic growth rate was 20% for the first half of 2007 and theproportion of sales made to existing clients versus new clients was 68% to 32%.From September 2007, our offering will be augmented with our enhanced dataproducts for analytics. The demand for our core analytics products is likely toremain strong as many asset managers look to replace legacy systems implementedin the late 1990s and there are a number of consolidation opportunitiesavailable. As a sign of our confidence we are pleased to declare an increased interimdividend to 0.45p per share up 50% from 0.3p paid last year. FRI IntegrationDuring the first half of 2007 we were very much focused on continuing to sellour existing products and on successfully concluding the integration process ofFRI. Johannesburg Stock ExchangeA key project is the contract between FRI and Accenture to deliver a new backoffice system for the Johannesburg Stock Exchange ("JSE"), where we have nowclarified how much more development was required over and above the originalschedule. As a result, we have negotiated an additional US$1.8 million fee forthe work required through to the end of January 2008 and we have alreadyestablished a new development team for the project, based in South Africa andpart of our existing business there, to take over the work currently beingmanaged by our Toronto team. It is likely that further development contractswill be awarded for this project as the software will be used for the backoffice not only of the JSE, but also as the record keeping system for the sixtyor so brokers that are members of the JSE. Working Capital AgreementUnder the acquisition agreement with FRI, there was a process to resolvedifferences in the valuation of the working capital balance of FRI at theacquisition date, most of which relates to the fair value of work in progress ona number of projects. We have achieved a successful resolution with the FRIshareholders and this has resulted in a credit in our favour of approximatelyC$1.0 million (£0.47 million). FRI Corporate ActivityOn acquisition, FRI had a number of business units, and our intention has beento integrate and build up those that were core to our business and dispose ofthose that were not. Accordingly we have disposed of FRI's real time databusiness, which provided the end of day valuation division with snap shot pricesand acquired a Canadian bond price business. In respect of the former, we have entered into an agreement with Tenfore SystemsLtd. ("Tenfore") to transfer our real time clients to them and in turn toreceive a real time data feed from Tenfore to replace our own feed. This hasseveral advantages: we will receive up to US$2.5 million (£1.25 million) in thetransfer process (dependent on how many clients transfer), receive a real timefeed that covers worldwide equities rather than just North American equities andreduce our supply costs for data for our valuation service. This business wasnon-core as the clients operate in a different market from StatPro's traditionalclients (including a number of small internet dealing sites and some retailcustomers) and are extremely unlikely to buy any of our other products. In contrast, we recently acquired Initram Data Inc, based in Montreal, for atotal cash consideration of C$3.0 million (£1.42 million), with C$2.1 million(£0.99 million) payable on signature and the balance over a two year period. Initram Data Inc is a small competitor that also produces Canadian Bond Prices.We believe that the consolidation of the two business units will enable us tobenefit from greater scale and also allow us to expand into other data servicesmore easily. The Initram team brings a number of important data clients and weare confident that we will be able to offer these clients additional servicesfrom our much broader coverage of data. FRI - New Data ServicesWith the acquisition of FRI we had several objectives in terms of feeding datato our analytics systems. One of these involves computing and then feeding riskparameters for fixed income instruments into SFI (StatPro Fixed Income). Thishas now been completed and means that we will be able to offer SFI clients fullcoverage of the assets in their portfolios when we launch this service fromSeptember 2007. Another project has been to supply an index data feed through our systems intoSPA (StatPro Performance Attribution) and SFI. This has also been completed withthe first family of indices and now we will start adding more indices accordingto demand. This service will also be launched in September 2007. The third key project is to offer Complex Asset Pricing by linking together ourspecialised risk valuation services in Milan with our efficient data operationsin Montreal. Progress on developing this service is going well for the plannedlaunch in January 2008. StrategyThe heart of our strategy remains providing a coherent suite of products that wecan cross-sell to all our clients. We have developed our product set byacquiring new products and we have enhanced our client list by our acquisitionof FRI in North America. We will now seek to supplement this strategy withfurther acquisitions either to consolidate certain product categories or toenhance our product range. In addition, we are now able to broaden our product set by combining ourexisting products. The most interesting and exciting opportunity is with ComplexAsset Pricing. The proliferation of derivatives and the inventiveness of thefinancial markets have resulted in many complex and illiquid assets being heldby almost all asset managers. Whilst these derivatives have undoubtedly improvedthe flexibility of asset managers they have also brought problems, the greatestof which is accurate valuation of the underlying assets. A proliferation ofregulations in Europe and North America stress the importance of pricing riskand require that asset managers and custodians obtain multiple independentsources to value all assets. The market for suppliers of such valuations remainsvery fragmented and most services are extremely expensive due to the customisednature of many derivatives. We believe that StatPro has the expertise andsystems to offer a broad range of valuations for complex assets at a competitiveprice and we intend to launch this service in January 2008 as part of our End ofDay Valuation Service. Surveys of our existing clients show that most of themare using large teams of employees with spreadsheets to value these assets andthey would all welcome a more cost-effective solution. We also wish to improve the solutions we offer our software clients by offeringas much data as we can with the software service and thus minimiseimplementation time and cost. We believe this will also accelerate our salescycles. In addition, we plan to launch our first analytics services via theinternet early next year as SaaS (Software as a Service) with the added benefitof DaaS (Data as a Service). We believe that such services will be very popularwith smaller asset managers such as pension funds and hedge funds who do notneed or want to invest in complex IT solutions. As a result of the integration of FRI with StatPro and the combination of ourrespective product sets, the enlarged group has transformed its productpositioning. We now have a high quality, high value-added price evaluationservice alongside a broad set of analytics solutions that combine highlyfunctional software with essential data. StaffNone of this would be possible without the tireless efforts of the employees ofStatPro who have all been selected for their high levels of competence in theirrespective fields. OutlookGiven the transformation of our product set we are very confident about ourprospects. We remain focused on maintaining the strong financial discipline thathas helped us grow so successfully whilst balancing the needs for investment tosustain long term growth. We aim to maintain our recent rate of organic growthand our strong cash generation will help us systematically pay down our debtthus strengthening our balance sheet, providing us with the flexibility torespond to any opportunities that may arise. We look forward to the second halfof 2007 and beyond. Justin WheatleyChief Executive FINANCIAL REVIEWOverviewThe integration phase of the major acquisition of FRI has now been successfullycompleted and the combined business is beginning to reap the benefits. As aresult there has been a substantial step change in the scale of the businessoperations that has resulted in a 79% increase in revenue and 126% increase inprofit before tax in the first half of 2007. The Group increased its operatingprofit by 190% to £2.28 million (2006: £0.79 million). We have achieved ourshort term target of generating an operating margin of over 20%. We continue togenerate strong operating cash flow and this has allowed us to repay £0.93million of our debt. Key business integration projectsPrior to its acquisition by StatPro, FRI was working on a major systems projectwith Accenture for the Johannesburg Stock Exchange. We have now successfullyresolved a number of key project risk issues on this major development and as aresult, we signed a new agreement for additional consulting with Accentureamounting to US$1.8 million, the bulk of which is expected to be completedduring 2007. Progress is going well and we believe that a successful conclusionto this phase of the project would lead to further work for our expanding SouthAfrican operations. During the period we achieved an agreement on the fair value of the workingcapital balance relating to the FRI acquisition completed in October 2006 andthis has led to a benefit of approximately C$1.0 million (£0.47 million). We entered into a commercial agreement with Tenfore Systems Limited ("Tenfore"),a specialist in the provision of real time data, to transfer the non-core realtime data business for a consideration of up to US$2.5 million (£1.25 million).The transfer is expected to be completed by year end. The real time division hasannual revenue of around US$1.5 million (£0.75 million) and is marginally lossmaking. StatPro Canada has expanded its operations following the acquisition in July2007 of Initram Data Inc. ("Initram"), a Montreal based data provider, for atotal cash consideration of C$3.0 million (£1.41 million) with C$2.1 million(£0.99 million) payable on signature and the balance payable over two years.Through this acquisition we have acquired further data clients and prospects andan excellent team of five who will help us accelerate the growth of our globaldata business. Initram was established in 2002 and whilst it has been operatingat break-even, it has grown its recurring revenue to approximately C$0.7 million(£0.33 million) as at 30 June 2007. These key business integration projects, coupled with the excellent progressmade on the integration of the data and analytics products, means that theintegration phase of FRI is now complete. TurnoverTurnover increased by 79% to £11.32 million (2006: £6.33 million) of which 20%relates to underlying growth and 59% to acquisitions completed in 2006.Adjusting for the impact of exchange rate movements, turnover and operatingprofit would have increased by a further 4% and 3% respectively. Recurringsoftware licence revenue grew by 36% and the level of professional services andother revenue increased by 108%. Data revenue, which is a new line of businessfollowing the FRI acquisition, amounted to £2.04 million for the six monthperiod. The split of revenue by type was as follows: Six months to Six months to Year to 30 June 30 June 31 December 2007 2006 2006 £ million £ million £ millionTurnoverSoftware licences 7.28 5.37 11.66Data fees 2.04 - 0.82 ----------- ----------- -----------Total recurring revenue 9.32 5.37 12.48 Professional services and otherrevenue 2.00 0.96 2.12 ----------- ----------- ----------- 11.32 6.33 14.60 A good level of new business was achieved in the first half of 2007 in all themarkets in which we operate and the cross selling effect of having more productsand more clients is beginning to bear fruit. Our fixed income (SFI) andportfolio compliance (SPC) systems achieved the fastest growth rate during theperiod. The pipeline of new business is also at its highest level. The proportion by value of recurring software licences on multi-year contracts(licence agreements with more than one year remaining contractually committed)was 56% at the end of June 2007 compared to 57% at the end of December 2006 and53% at the end of June 2006. New business from existing clients was 68% (2006:65%) and our top 30 clients have an average of 3.9 products per client. The annual value of continuing recurring revenue, increased to £18.81 millionfrom £17.66 million at 31 December 2006, a growth of 7% (6% at constant exchangerates) in the six month period. Annualised At 31 New contracted Net impact of At Growth value December revenue (net of exchange 30 June (at constant 2006 cancellations) rates 2007 exchange £ million £ million £ million rates) %RecurringrevenuesSoftwarelicences 17.66 1.05 0.10 18.81 +6 Operating expenses Operating expenses (before amortisation of intangibles) amounted to £8.00million in the first half of 2007 (2006: £4.75 million). The growth in expensesarose mainly from the impact of the three acquisitions completed in 2006 leadingto an increased number of employees and a larger infrastructure. Other costs forthe business which have increased in the period relate to data acquired fromthird parties, exchange fees and other costs such as telecommunications requiredto deliver an integrated data and software service. EmployeesThe average number of employees during the first six months of 2007 increased to238 (2006: 114). The number of employees has increased from 233 at the start ofthe period to a total of 243 employees, situated in eleven offices in Europe,North America, South Africa and Australia at the end of June 2007. Fiveemployees joined with the Initram acquisition completed in July 2007. Development costsThe Group continues to increase its investment in research and development toensure we remain at the forefront of performance and risk analytics technology.The key projects we are currently investing in relate to integrating our dataoffering in an innovative way and the development of our SaaS (Software as aService) solution. We have made excellent progress on key projects to integratedata into our analytics products and to develop an innovative web-based datainteractive query service (StatPro Data Direct). Development costs incurred in the period amounted to £1.64 million (2006: £1.13million) of which £1.10 million (2006: £0.97 million) have been capitalisedunder IFRS where recognition criteria are met. The amortisation of intangiblesincluding development costs and acquired intangibles amounted to £1.04 million(2006: £0.79 million). The carrying value of intangibles (including acquiredintangibles) recognised amounted to £4.61 million (Dec 2006: £4.55 million). InterestNet interest expense amounted to £0.42 million (2006: net interest income £0.04million) arising mainly on the bank loan used to finance the FRI acquisition.Included within interest expense is £0.08 million relating to the unwinding ofdiscounts on deferred consideration. Profit before tax The profit before tax increased by 126% to £1.86 million from£0.82 million. Taxation Tax charged amounted to £0.28 million (2006: £0.08 million).The level of deferred tax asset amounted to £2.04 million (Dec 2006 - £2.27million). Deferred tax amounting to £0.43 million at end June 2006 has beenreclassified from current deferred tax for comparability purposes. Earnings per share Basic earnings per share increased by 50% to 3.0p (2006: 2.0p). The averagenumber of shares in issue in the period increased by 44% to 52,579,651 (2006:36,393,436) mainly as a result of shares issued in 2006 to finance the FRIacquisition. The diluted earnings per share were 2.9p (2006: 2.0p) based onpotentially dilutive shares outstanding amounting to 1,791,131 (2006:1,201,501).Minority interestIn March 2007, StatPro acquired the 49% of StatPro Italia that was not alreadyowned by the Company for £1.16 million. Cash flow There was an improved cash inflow from operations before investment indevelopment activities during the first six months of 2007 amounting to £2.89million (2006: £1.95 million). The investment in development activities was£1.10 million (2006: £0.97 million). As a result, the cash inflow fromoperations after investment in development activities increased to £1.78 million(2006: £0.98 million) in the first six months of 2007 (see note 3). Net proceedsfrom the shares issued in the first half of 2007 amounted to a total of £0.50million. Balance sheet The Group's net assets increased to £20.32 million at June 2007 (June 2006:£6.92 million) from £17.97 million at 31 December 2006. The level of trade andother receivables amounting to £4.61 million, of which the major component istrade debtors, was lower than at the end of December 2006 (£5.35 million) buthigher than the comparable figure at the end of June 2006 (£3.60 million). Thecash balance at the end of June 2007 was £2.22 million (June 2006: £4.25million) and the Group's net debt at 30 June 2007 amounted to £8.39 millioncompared with £7.68 million at 31 December 2006 and net funds of £4.22 millionat 30 June 2006. The increase in net debt in the period was mainly due to netpayments for acquisitions including deferred consideration of £1.08 million, anexchange movement on the currency loans of £0.53 million, offset by £0.50million raised on issue of equity. The major component of creditors is deferred income, anon-cash liability, which amounted to £8.04 million (June 2006: £6.76 million)compared to £8.67 million at 31 December 2006. The level of deferred contingentconsideration is estimated at £3.41 million at the end of June 2007 (June 2006:£3.50 million). Post balance sheet eventStatPro Canada completed the acquisition in July 2007 of Initram Data Inc, asoutlined above, for a cash consideration of C$3.0 million (approximately £1.41million) payable over two years, financed from StatPro's existing bankfacilities. Interim dividendThe directors intend to pay an increased interim dividend of 0.45 pence perordinary share (2006: 0.3p) on 31 October 2007 to shareholders on the registerat the close of business on 5 October 2007, reflecting the strong first halfresults and the Board's confidence in the business prospects. The Board intendsto maintain a progressive dividend policy reflecting the balance between theinvestment needs of the business and the growth in underlying cash and earningsper share. Andrew FabianFinance Director Group Income Statement Notes Unaudited Unaudited Audited Six months Six months Year to to to 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000Group RevenueContinuing operations 11,319 6,330 14,604 ------------------------- ------- ---------- --------- ----------Operating expenses beforeamortisation of intangibles (7,999) (4,751) (10,288)Amortisation of intangibles (1,039) (793) (1,669)Exceptional items - - (1,421)------------------------- ------- ---------- --------- ---------- Operating expenses (9,038) (5,544) (13,378) ---------- --------- ---------- Operating profit 2,281 786 1,226 Interest receivable 49 44 106Interest payable (473) (8) (195) ---------- --------- ---------- Profit before taxation 1,857 822 1,137 Taxation (279) (84) 77 ---------- --------- ---------- Profit for the period 1,578 738 1,214 ---------- --------- ---------- Profit/(loss) attributableto 19 (7) (110)minority interestsProfit attributable toequity 1,559 745 1,324shareholders 1,578 738 1,214 ---------- --------- ---------- Earnings per share fromcontinuing operations - 2 3.0p 2.0p 3.3pbasic- diluted 2 2.9p 2.0p 3.2p Statement of Recognised Income and Expense Audited Unaudited Unaudited Year to Six months to Six months to 31 December 30 June 30 June 2006 2007 2006 £'000 £'000 £'000Profit for the period 1,578 738 1,214Net exchange differences offsetin reserves net of tax 608 28 (970)Total recognised gains andlosses for the period 2,186 766 244 ---------- --------- ---------- Attributable to:Minority interests 3 (7) (91)Equity shareholders 2,183 773 335 Consolidated Balance Sheet Notes Unaudited Unaudited Audited As at As at As at 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Non current assetsGoodwill 31,473 6,632 29,869Intangible assets 4,614 2,931 4,550Property, plant and equipment 935 528 846Other receivables 320 250 316Deferred tax assets 2,043 1,462 2,269 -------- -------- --------- 39,385 11,803 37,850 Current assetsTrade and other receivables 4,611 3,597 5,352Cash and cash equivalents 2,218 4,254 3,327 -------- -------- --------- 6,829 7,851 8,679 LiabilitiesCurrent liabilitiesFinancial liabilities - borrowings (1,857) (35) (1,857)Trade and other payables (3,794) (2,397) (4,767)Current tax liabilities (47) (46) (53)Deferred income (7,939) (6,668) (8,562)Provisions - contingentconsideration (862) (1,096) (1,484) -------- -------- --------- (14,499) (10,242) (16,723) Net current liabilities (7,670) (2,391) (8,044) Non-current liabilitiesFinancial liabilities - borrowings (8,748) - (9,145)Deferred income (98) (87) (109)Provisions - contingentconsideration (2,552) (2,404) (2,581) -------- -------- --------- (11,398) (2,491) (11,835) Net assets 20,317 6,921 17,971 -------- -------- --------- Shareholders' equityOrdinary shares 528 393 522Share premium 14,084 3,362 13,570Shares to be issued 875 - 896Other reserves 740 698 116Retained earnings 4,228 2,525 3,008 -------- -------- ---------Total shareholders' equity 20,455 6,978 18,112Minority interest in equity (138) (57) (141) -------- -------- ---------Total equity 20,317 6,921 17,971 -------- -------- --------- Consolidated Cash Flow Statement Unaudited Unaudited Audited Six months Six months Year to to to 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000Cash flows from operating activitiesCash generated from operations 2,886 1,949 3,889Interest received 49 42 106Interest paid (552) (9) (12)Tax paid (35) (34) (105) --------- --------- ---------Net cash from operating activities 2,348 1,948 3,878 Cash flows from investing activitiesAcquisition of subsidiaries (net ofcash acquired) (1,081) (790) (24,517)Investment in intangible assets -development costs (1,104) (966) (1,939)Proceeds from sale of property, plant and equipment - - -Purchase of property, plant andequipment (268) (108) (302) --------- --------- ---------Net cash used in investingactivities (2,453) (1,864) (26,758) Cash flows from financing activitiesRepayment of bank loan (934) - -Net proceeds from bank loan - - 11,788Proceeds from issue of ordinaryshares 499 2,499 12,836Dividends paid to shareholders (376) (180) (298)Net cash (used in)/from financingactivities (811) 2,319 24,326 --------- --------- --------- Effects of exchange rate changes (193) (2) 28 Net (decrease)/increase in cash andcash equivalents (1,109) 2,401 1,474 --------- --------- --------- Cash and cash equivalents at startof period 3,327 1,853 1,853 Cash and cash equivalents at end ofperiod 2,218 4,254 3,327 --------- --------- --------- Reconciliation of operating profit to net cash flow from operating activities Unaudited Unaudited Audited Six months to Six months to Year to 30 June 2007 30 June 2006 31 December 2006 £'000 £'000 £'000 Operating profit 2,281 786 1,226Depreciation of tangiblefixed assets 197 110 261Amortisation of intangibles 1,039 793 1,669Decrease/(increase) indebtors 717 289 (490)(Decrease)/increase increditors (excluding deferredincome) (751) 112 898(Decrease)/increase indeferred income (634) (177) 232Share based payments 37 36 58Loss on disposal of fixedasset - - 35Net cash generated fromoperating activities 2,886 1,949 3,889 -------- -------- --------- Reconciliation of net cash flow to movement in net (debt)/funds Unaudited Unaudited Audited Six months to Six months to Year to 30 June 2007 30 June 2006 31 December 2006 £'000 £'000 £'000 (Decrease)/increase in cashand cash equivalents in theperiod (1,109) 2,401 1,474Movement on bank loan 934 - (11,788)Exchange differences on bankloan (525) - 825Other non-cash movements (12) - (4) -------- -------- ---------Movement in net (debt)/funds (712) 2,401 (9,493)Net (debt)/funds at beginningof period (7,675) 1,818 1,818Net (debt)/funds at end ofperiod (8,387) 4,219 (7,675) -------- -------- --------- Analysis of changes in net debt At 1 Cash Non-Cash Exchange At 30 June January flow changes differences 2007 2007 £'000 £'000 £'000 £'000 £'000Cash andcash 3,327 (1,109) - - 2,218equivalentsBank loans(net ofissuecosts (10,967) 934 (12) (525) (10,570)deferred)Other (35) - - - (35)loans ------- ------- ------- --------- --------Net debt (7,675) (175) (12) (525) (8,387) ------- ------- ------- --------- -------- Statement of changes in shareholders' equity Share Share Shares Retained Other Minority Total capital premium to be earnings reserves interests account issued * £'000 £'000 £'000 £'000 £'000 £'000 £'000At 1January 2007 522 13,570 896 3,008 116 (141) 17,971Shares issued 6 514 (21) - - - 499Profit for the period - - - 1,559 - 19 1,578Dividend - - - (376) - - (376)Share basedpayments - - 37 - - 37Exchangedifferencesoffset inreserves - - - 624 (16) 608 ------- ------- ------- ------- ------- ------- --------At 30 June2007 528 14,084 875 4,228 740 (138) 20,317 ------- ------- ------- ------- ------- ------- -------- * Other reserves includes warrant reserve, merger reserve, and translationreserve.Notes to the interim accounts 1. This announcement was approved by the Board of directors on 27 July2007. The financial information set out in this interim statement has beenprepared under IFRS on the basis of the accounting policies set out in thestatutory accounts of StatPro Group plc for the year ended 31 December 2006.This report is not prepared in accordance with IAS34 which is currently notmandatory. This interim statement has not been audited but has been reviewed bythe Company's auditors PricewaterhouseCoopers LLP. The financial informationdoes not constitute statutory accounts within the meaning of section 240 of theCompanies Act 1985. Statutory accounts for StatPro Group plc for the year ended31 December 2006 reported under IFRS, on which the auditors gave an unqualifiedopinion, have been delivered to the Registrar of Companies. Copies of thisstatement will be posted to shareholders. Further copies are available free ofcharge on request from the Company Secretary at the Company's registered office,StatPro House, 81-87 Hartfield Road, London SW19 3TJ. 2. Basic earnings per share. Basic earnings per share has beencalculated based on the profit after taxation and minority interests of £1.56million (2006: £0.74 million) and the weighted average number of shares of 52,579,651 (2006: 36,393,436). The diluted earnings per share were 2.9p (2006:2.0p) based on potentially dilutive shares outstanding amounting to 1,791,131(2006: 1,201,501). Analysis of recurring revenue by type Type Sterling Percentage Sterling Percentage Sterling Percentage value at 30 value at 30 value at June 2007 June 2006 31 December 2006 Unaudited Unaudited Audited £ £ £ millions millions millionsSoftwarelicences 14.87 79.1% 12.00 100.0% 13.87 78.5%Data 3.94 20.9% - - 3.79 21.5%fees --------- --------- --------- --------- -------- --------- 18.81 100.0% 12.00 100.0% 17.66 100.0% Analysis of recurring revenue by region Region Sterling Percentage Sterling Percentage Sterling Percentage value at 30 value at 30 value at June 2007 June 2006 31 December 2006 Unaudited Unaudited Audited £ £ £ millions millions millions United Kingdom 2.94 15.6% 2.77 23.1% 2.86 16.2%ContinentalEurope 5.96 31.7% 5.78 48.2% 5.63 31.9%North 8.01 42.6% 2.27 18.9% 7.54 42.7%AmericaRest of 1.90 10.1% 1.18 9.8% 1.63 9.2%World --------- --------- --------- --------- -------- --------- 18.81 100.0% 12.00 100.0% 17.66 100.0% Analysis of recurring revenue by currency As at 30 June Currency Exchange Sterling value Percentage2007 value rate atCurrency millions 30 June 2007 30 June 2007 Unaudited £ millionsPoundssterling £3.29 1.000 3.29 17.5%Euro €8.84 1.486 5.95 31.6%US Dollar US$8.86 2.006 4.42 23.5%CanadianDollar C$7.98 2.134 3.74 19.9%Othercurrencies 1.41 7.5% ---------- --------- 18.81 100.0% As at 30 June Currency Exchange Sterling value Percentage2006 value rate atCurrency millions 30 June 2006 30 June 2006 Unaudited £ millionsPoundssterling £3.07 1.000 3.07 25.6%Euro €7.95 1.447 5.49 45.7%US Dollar US$3.89 1.850 2.10 17.5%CanadianDollar C$0.35 2.005 0.17 1.4%Othercurrencies 1.17 9.8% ---------- --------- 12.00 100.0% As at 31 December Currency Exchange rate Sterling value Percentage2006 value atCurrency millions 31 December 31 December 2006 2006 Audited £ millionsPoundssterling £3.20 1.000 3.20 18.1%Euro €8.33 1.484 5.61 31.8%US Dollar US$8.56 1.957 4.38 24.8%CanadianDollar C$7.41 2.278 3.25 18.4%Othercurrencies 1.22 6.9% 17.66 100.0% 3. Cash generated from operations - reconciliation from statutoryheading to business performance measure Unaudited Unaudited Audited Six months to 30 June Six months Year 2007 to to 30 June 2006 31 December 2006 £'000 £'000 £'000 Cash generated fromoperations 2,886 1,949 3,889Investment inintangible assets -development costs (1,104) (966) (1,939) -------- -------- ----------Cash generated fromoperations lessinternallygenerated 1,782 983 1,950intangible assets -------- -------- ---------- 4. Dividend. An interim dividend for 2007 amounting to 0.45 pence perordinary share (2006: 0.3p) will be paid on 31 October 2007 to shareholders onthe register on 5 October 2007. A final dividend for 2006 amounting to 0.7 penceper ordinary share was paid on 30 May 2007 to shareholders on the register on 27April 2007. Under IFRS dividends are accounted for when paid and not whenproposed or declared. Independent review report to StatPro Group plc IntroductionWe have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprises the interim consolidatedbalance sheet as at 30 June 2007 and the related consolidated interim statementsof income, cash flows and changes in shareholders' equity for the six monthsthen ended and related notes. We have read the other information contained inthe interim report and considered whether it contains any apparent misstatementsor material inconsistencies with the financial information. Directors' responsibilitiesThe interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The AIM rules ofthe London Stock Exchange require that the accounting policies and presentationapplied to the interim figures should be consistent with those applied inpreparing the preceding annual accounts except where any changes, and thereasons for them, are disclosed. This interim report has been prepared in accordance with the basis set out inNote 1. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the disclosed accounting policies havebeen applied. A review excludes audit procedures such as tests of controls andverification of assets, liabilities and transactions. It is substantially lessin scope than an audit and therefore provides a lower level of assurance.Accordingly we do not express an audit opinion on the financial information.This report, including the conclusion, has been prepared for and only for thecompany for the purpose of the AIM rules of the London Stock Exchange and for noother purpose. We do not, in producing this report, accept or assumeresponsibility for any other purpose or to any other person to whom this reportis shown or into whose hands it may come save where expressly agreed by ourprior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. PricewaterhouseCoopers LLPChartered AccountantsLondon27 July 2007 Notes: (a) The maintenance and integrity of the StatPro Group plc web site is theresponsibility of the directors; the work carried out by the auditors does notinvolve consideration of these matters and, accordingly, the auditors accept noresponsibility for any changes that may have occurred to the interim reportsince it was initially presented on the web site.(b) Legislation in the United Kingdom governing the preparation anddissemination of financial information may differ from legislation in otherjurisdictions. This information is provided by RNS The company news service from the London Stock Exchange