SPE.L Regulatory News (SPE)

21 Dec 2007 10:30

Embargoed Release: 10:30 hrs, Friday 21 December 2007

SOPHEON PLC ("Sopheon") TRADING UPDATE

Sopheon plc the international provider of software and services that improve the financial return from innovation and product development investments, issues a trading update. As 2007 draws to an end, we have continued to focus our efforts on closing the large pipeline of business referred to in our announcement of 25 October 2007. We have noted repeatedly in our communications to the market that the timing of individual sales can have substantial impact on our results, and this is proving a major factor as we close 2007. In the last few days it has become clear that a number of the transactions we have been focused on signing by the end of this year will not be concluded before the first quarter of 2008. In particular, a small number of large transactions comprising both new and extension deals - with a combined value potential of up to ‚£2 million in license alone, in addition to follow-on services and maintenance - have now been deferred. Our confidence that this business will still come to us remains high; we understand that the delays are due largely to the logistical challenges posed by year-end business activity within our customers' organizations, and in the majority of cases they have indicated that these transactions will be finalized during the first quarter of next year. Whilst disappointed, we continue to anticipate substantial revenue growth in our business, but frustratingly, we no longer expect this to be reflected in our financial results for the year ended 31 December 2007.

Despite the delays in certain major transactions, we have continued to sign new business. Revenue visibility for the year now stands at approximately ‚£6.1 million, and we are still pursuing a number of smaller opportunities to close in the final weeks of this year. We reached a significant milestone during the fourth quarter by signing the 100th licensee customer for our core software platform. The new customers acquired through our acquisition of Alignent Software in June, are of course over and above this milestone accomplishment.

We have also continued to make good progress with our ongoing product development activities. This month we completed two significant projects. First, we will soon release a new version of the former Alignent's Vision Strategist product planning software that incorporates portfolio management capabilities derived from our core Accolade product. This development is generating considerable interest from the existing Vision Strategist client base. Second, our product development organization has recently completed the coding for the most significant new version of Accolade release in Sopheon's history, which will extend the value and functionality of Sopheon's software for the non-process manufacturing markets, including the large aerospace, defence and automobile sectors. Market roll-out of Accolade version 7.0 will begin in the first quarter of 2008.

Separately, as announced in June 2006, Sopheon filed a certification with the US Securities and Exchange Commission ("SEC") on Form 15, to immediately suspend its duty to file reports under the Securities Act of 1934. This has saved us filing costs. However, the recent acquisition of Alignent could potentially require us to resume SEC reporting, unless Sopheon terminates its registration. Accordingly, pursuant to recently adopted Rule 12h-6(i) of the Exchange Act, we will shortly be filing a certification with the SEC on Form 15F, in order to effect such termination. Sopheon's ordinary shares are not traded on any US Stock Exchange, and this change will have no effect on the trading of Sopheon's shares on AIM or Euronext.

Also on the corporate front, we have agreed terms to extend Sopheon's equity line of credit facility with GEM Global Yield Fund Limited ("GEM") for a further two year period through to 23 December 2009. GEM has agreed to implement this extension at no cost to Sopheon. The facility has been used to raise working capital only once, in March 2004, leaving approximately 90% of the original ¢â€š¬10m facility available under the extended agreement.

Financial expectations noted above are subject to the completion of the year-end financial close and audit processes. We will provide shareholders with a further update on 25 January 2008.

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 Clare Verhagen Citigate First Financial Tel : + 31 (0) 205 754 010 David Newton Seymour Pierce Tel: + 44 (0) 207 107 8000About Sopheon

Sopheon is an international provider of software and services that help organizations 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 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.