16 Jun 2009 07:00
Embargoed Release: 07:00hrs Tuesday 16 June 2009
SOPHEON PLC AGM Statement
At the Annual General Meeting of Sopheon plc to be held later today, the chairman of the board will give shareholders an update and review of the business. This will include the following statement:
"Sopheon delivered a landmark performance in 2008. We reported revenues of £ 9.3m, a year-over-year increase of 47%. We also showed good improvement in profitability. Since the start of 2009, we have closed a total of 15 new and extension license orders. The total licensee base now stands at 163 and recurring revenues from maintenance, hosting and rental licenses now stand at £ 4 million compared to £2.9 million a year ago. Revenue visibility for the full year from contracted business and recurring revenue streams, now stands at £ 6.2 million. We had expected to report a higher figure to shareholders at this point in time, however, as noted in our Interim Management Statement of 7 May, our performance in current market conditions remains unpredictable. A number of opportunities that we had expected to close in the second quarter are now unlikely to conclude until the third or fourth quarters of the year. Several of these prospects have attributed the delays to more stringent approval processes imposed due to the current market uncertainty.
The majority of the affected prospects remain in active sales cycles, and a number of them are beginning to indicate early signs of improvement in conditions. Accordingly, we continue to expect to close these opportunities in the second half of the year, in addition to new business originally identified for the third and fourth quarters. This will be a major challenge but one we will embrace with vigour. The impact of the economy aside, such delays are not a new experience for Sopheon. We have consistently noted our business dependency on a small number of relatively large deals, any of which can materially impact the revenue recorded in a particular period. While we do anticipate closing further business in June, a possible effect of the ongoing delays is that revenues in the first half of 2009 may be lower than those recorded in the comparable period last year. With higher costs due to higher staff levels (particularly in product development) and the impact of the weakness of Sterling, this is expected to result in an EBITDA loss for the first half of the year. In our announcement of 7 May we noted that while we had expanded investment in product development, we had taken action to reduce and reorganize certain operational groups. The financial benefit of this adjustment will feed through into the second half the year. However, as a prudent measure in these unpredictable times, we are evaluating further cost adjustments, as well as negotiating improved cash facilities.
As we face the current challenges, we are fortified by our recent achievements. Over the last two years we have evolved Sopheon from a single product company to one with a product family of three. This has been accomplished through a combination of strategic investment, partnership activity and an unremitting focus on product development. Our first milestone in this expansion in scope was in 2007 with the acquisition of Alignent Software, bringing its Vision Strategist roadmapping solution into our product set. This was followed last year with the pivotal release of version 7.0 of our core Accolade platform. Most recently, we announced the launch of Idea Lab, our new idea development software, which has expanded the capacity of our solution set to strengthen the front-end of the product innovation process. With this launch, Sopheon now offers the first software suite in the industry to provide all-in-one support that encompasses innovation strategy, ideation and execution. We remain convinced that this represents a highly differentiated value proposition, and are encouraged by strong interest from the market and influential, positive affirmation from the business analyst community."
-Ends-
For further information contact:
Barry Mence, Chairman Sopheon plc + 44 (0) 1483 685 735
Arif Karimjee, CFO Vikki Krause Hansard Communications + 44 (0) 207 245 1100 + 44 (0) 7515 922906 Claire Verhagen Citigate First Financial + 31 (0) 205 754 010 Sarah Jacobs Seymour Pierce + 44 (0) 207 107 8000 About Sopheon
Sopheon is an international provider of software and services that help organisations improve the business impact of product innovation. Sopheon's solutions automate and govern the innovation process, enabling companies to increase revenue and profits from new products. Sopheon's solutions are used by industry leaders throughout the world, including BASF, Cadbury Schweppes, Corning, Electrolux, General Motors, Honeywell, Motorola and SAB Miller. Sopheon is listed on the AIM Market of the London Stock Exchange and on the Euronext in the Netherlands. For more information, please visit www.sopheon.com.
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