14 Oct 2008 07:00
RNS Number : 7556F
Statpro Group PLC
14 October 2008
Tuesday, 14 October 2008
STATPRO GROUP PLC
(“StatPro” or the “Group”)
Q3 Trading Update
Placing to raise approximately £2.0 million
Cost Saving Initiatives
StatPro Group plc, the AIM listed provider of portfolio analytics and data solutions for the global asset management industry, today announces a trading update for the nine months ended 30 September 2008, the acceleration of significant cost saving initiatives through a business restructuring and a share placing to strengthen the Group’s financial position.
A meeting for analysts to discuss today’s announcement will be held at the offices of Smithfield Consultants, 10 Aldersgate Street, London, EC1A 4HJ at 10.45 a.m. for 11.00 a.m. this morning.
Trading
StatPro today announces that, notwithstanding the challenging and unpredictable state of the markets, trading in the third quarter of 2008 was in line with market expectations.
As reported at the time of the interim results in August, the level of cancellations is as budgeted and the renewal rate remains stable at approximately 95 per cent.
Placing
Given the potential for short term disruption to the Company’s existing banking arrangements with Kaupthing Singer & Friedlander which has been placed into administration, the StatPro Board resolved to raise equity to provide greater working capital flexibility and to strengthen the Group’s financial position.
StatPro is pleased to announce that 4,522,224 new ordinary shares of one penny each (“Ordinary Shares”) in the capital of the Company (the “Placing Shares”) have been conditionally placed by Arbuthnot Securities Limited with institutional investors and Directors at a price of 45 pence per share (“Placing Price”) to raise approximately £2.0 million after expenses (the“Placing”). The Placing Price represents a discount of 10.0 per cent. to the closing middle market price of 50 pence per Ordinary Share on 13 October 2008, being the last dealing day prior to the release of this announcement. The Placing Shares will represent approximately 7.6 per cent. of the Company’s enlarged share capital following completion of the Placing.
As part of the Placing, the StatPro Directors have agreed to commit £400,000 by subscribing for 888,890 Placing Shares in aggregate at the Placing Price. These represent approximately 19.7 per cent. of the Placing Shares comprising:
| Director | Number of Placing Shares | Resultant Shareholding following Admission | % Shareholding following Admission |
| Carl Bacon | 55,556 | 565,556 | 1.0 |
| Justin Wheatley | 222,222 | 6,978,994 | 11.8 |
| Andrew Fabian | 55,556 | 111,919 | 0.2 |
| Charles Fairbairn | 333,334 | 779,834 | 1.3 |
| Mark Adorian | 222,222 | 2,220,698 | 3.7 |
The issue of Placing Shares to the StatPro Directors is classified as a transaction with a related party for the purposes of the AIM Rules. In accordance with the AIM Rules, the Company’s Nominated Adviser, Arbuthnot Securities, considers that the terms of the Placing are fair and reasonable insofar as the Company’s shareholders are concerned.
Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. The Placing Shares will rank pari passu with the existing issued Ordinary Shares.
The Placing is conditional, inter alia, on the admission of the Placing Shares to AIM becoming effective (“Admission”), which is expected to occur on 16 October 2008, when dealings in the Placing Shares are expected to commence. Following Admission, the Company will have 59,249,452 Ordinary Shares in issue.
Cost Saving Initiatives
The Board of StatPro has also decided to accelerate its product development restructuring programme, initiated in the first half of the current financial year, which the Directors believe will significantly reduce the cost base and lead to a more flexible development process.
StatPro has been building up its South African development capability over the last two years and the Board has now transferred to its development centre in Cape Town all development functions currently based in London and Paris on existing products. Simultaneously, the Data Division’s operations in Canada have been consolidated from two offices into one. These actions are aimed at improving efficiency, simplifying management structure and reducing overall costs whilst allowing the Company to bring greater focus to its product strategy.
The net savings from these actions are expected to be approximately £1.5 million per annum. There will be a one-off exceptional charge related to restructuring costs and asset write downs amounting to approximately £1.7 million in H2 2008. This exceptional charge comprises:
·; redundancy costs of approximately £0.9 million;
·; a provision for onerous leases of approximately £0.3 million; and
·; a write down of approximately £0.5 million against previously capitalised development projects.
The cash element impacting the financial year ending 31 December 2008 is expected to be approximately £0.65 million. This exceptional charge is in addition to the charge incurred in H1 2008 amounting to £564,000.
SaaS Strategy
Fund managers need to measure their performance and understand their risk at all times. In the current environment the focus, more than ever, will be on doing so cost effectively. StatPro’s new simplified suite of products available on its new SaaS (“Software as a Service”) platform offers a compelling solution for clients.
StatPro’s focus is to bring down the total cost of ownership of its products for its clients by doing more of the process for them. In the Board’s view, this puts the business in a competitive position and is, overall, expected to result in more new business for StatPro.
Impact on clients
StatPro’s business model is to rent its software to clients on long term contracts, typically three years duration. This offers protection in adverse markets, where winning new clients is more challenging.
The Company has a diversified client base where the average contract value is just 0.2 per cent. of revenues and the average exposure to each client is 0.4 per cent. StatPro’s largest single client group represents less than 5 per cent. of its revenues. StatPro’s customer base is primarily larger, long-only asset managers and pension funds with no leverage and a long term strategy for investments, generating steady revenues from their clients. The Company’s exposure to the Hedge Fund sector is less than 1 per cent. of its recurring revenue.
For this reason the Board of StatPro expects the impact of the current turmoil in the financial markets on its client base to be less than for other sectors of the financial markets.
Outlook
As noted in the announcement of the Company’s interim results on 4 August 2008, the Board reiterates its view that market conditions are likely to lead to a slow down in new business levels.
However, the Board believes that StatPro is very well placed to benefit from clients becoming more focused on extracting greater efficiencies and cost savings from the money they spend because of the Group’s suite of attractively priced solutions.
This gives the Board confidence in the medium and longer term prospects for the business. In the short term, the high visibility of revenues and actions taken to reduce the cost base means that the Board remains comfortable with market expectations.
Justin Wheatley, Chief Executive of StatPro, commented:
“Trading in the third quarter of 2008 was in line with market expectations despite the challenging and unpredictable state of the markets.
“Following our bank being placed into administration, we have taken the prudent step of raising some additional working capital to improve our overall financial position.”
– Ends –
For further information, please contact:
StatPro Group plc www.statpro.com
Justin Wheatley, Chief Executive 020 8410 9876
Andrew Fabian, Finance Director
Arbuthnot Securities Limited
Tom Griffiths/Alasdair Younie 020 7012 2000
Smithfield
Reg Hoare/ Will Henderson 020 7360 4900
Notes to Editors: StatPro Group plc is a leading provider of portfolio analytics and data solutions for the global asset management industry. StatPro floated on the London Stock Exchange in May 2000 and transferred its listing in June 2003 to AIM. StatPro has grown its recurring revenue from less than £1 million in 1999 to over £23.8 million at end June 2008.
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