SPE.L Regulatory News (SPE)

20 Oct 2005 06:00

EMBARGOED RELEASE 07:00 HOURS 20 October 2005 SOPHEON PLC THIRD QUARTER TRADING UPDATE In accordance with the requirements of Euronext Amsterdam, Sopheon plc("Sopheon") issues its trading update for the third quarter of 2005. The thirdquarter is traditionally quiet in the software industry, but the value ofSopheon's new sales orders taken during the quarter significantly exceeded theequivalent period in 2004, and was broadly equal to the total new salesachieved in the first six months of 2005. During the third quarter, includingextensions, Sopheon signed eight license sales and four proof of conceptengagements, in addition to several incremental consulting assignments fromexisting clients.In our results statement for the six months to 30 June 2005, we identifiedseven license opportunities as larger and more complex than the historicaverage. Of these, two have now concluded in a license order (included in thetotal count of eight for the quarter) and four are engaged in proof of conceptactivities. One of these has already contracted for its license, subject to anacceptance decision in the fourth quarter. The seventh opportunity remains incontract negotiations; this is also one of three opportunities carried forwardfrom the second quarter, of which the other two have concluded in a licenseorder.The volume of service revenues continues to show momentum in conjunction withlicense sales and proof of concept activity. As indicated in our interimstatement, we have continued to develop our partnerships to expand ourimplementation capacity and to act as a source of introductions to potentialnew customers. During the period we formed relationships with three leadingconsultancies in product development, each with an international footprint.Further details will be announced in due course. In addition, to support bothcurrent needs and anticipated growth, we have recruited a senior IT executiveto lead service delivery in Europe. Amit Eitan has 26 years experience inleading international IT organizations, and will be based in our offices inMaastricht.Initial findings from our research into the application of our EuropeanAccolade-based healthcare solution into the US market have been positive. Weare now considering how best to achieve progress in this area withoutdisrupting activities in our core vertical markets.The recent sales have led to good revenue growth over the first and secondquarters of 2005, however a proportion of the revenues deriving from these newsales will not be booked until next year. Nevertheless, Sopheon hasdemonstrated renewed commercial progress in the third quarter, and at the dateof this report, visibility of 2005 revenues stands at ‚£4.1 million, which is95% of the revenues recorded in 2004. Visibility includes new orders, recurringmaintenance streams, and contracted license revenues conditional on acceptancedecisions. It does not include potential license sales to other customers underproof of concept, which along with several other new license opportunities, arebeing closely pursued for closure before year end. Our reported performanceremains sensitive to the timing, value and profile of individual sales events.However the fourth quarter is typically a busy one for software businesses andthis was certainly true for Sopheon in 2004. Our sales teams are focused onactive pipelines with substantial sales potential, and are working hard toclose out the final months of 2005 with strong momentum.Sopheon's Chairman, Barry Mence said:"Sopheon's third quarter sales performance has been higher than the seasonalnorm and this return to growth, together with our pipeline of potentialbusiness for the final quarter of 2005, gives us confidence that we will have astrong finish to the current year."For further information contact:Barry Mence, Chairman Sopheon plc Tel : + 44 (0) 1483 685 735 Arif Karimjee, CFO Andrew Tan Hansard Communications Tel : + 44 (0) 207 245 1100 + 44 (0) 7957 203 685 Floor van Maaren Citigate First Financial Tel : + 31 (0) 205 754 010About SopheonSopheon (LSE: SPE) is an international provider of software and services thathelp organizations improve the business impact of innovation. The SopheonAccolade‚® product portfolio and process management system automates gate- orphase-based product development (PD) processes and provides strategic decisionsupport that allows companies to cut product development spending waste andgenerate more revenue from new products. Sopheon is listed on the AIM market ofthe London Stock Exchange and on the Euronext in the Netherlands. For moreinformation, please visit www.sopheon.com.ENDSOPHEON PLC