29 Jan 2019 07:00
SOPHEON PLC
("Sopheon", the "Company" or the "Group")
TRADING UPDATE
Sopheon plc, the international provider of software, expertise, and best practices for Enterprise Innovation Performance, is pleased to provide a further update on the Group's performance for the year ended 31 December 2018.
In our trading update of 11 January 2019, we reported continued commercial delivery through the end of the year on the back of a record third quarter performance for the Company. The Board now expects that reported revenues for the year ended 31 December 2018 will be in excess of $33m, up from $28.5m in 2017. With higher revenue as well as lower than planned costs, the Board expects that EBITDA and pre-tax profits will be significantly ahead of the upgraded market expectations for the year ended 31 December 2018. The year-end net cash position is expected to be $16.7m (2017: $9.5m) demonstrating the cash generative nature of the business.
During 2018 we recorded 18 new customer wins compared to 13 the year before, of which several were substantial in size. Five of the new wins were for software as a service ("SaaS") contracts. The recurring revenue base has risen to $14.7m coming into 2019, compared to $12m the year before. This, together with contracted services revenue, leads to overall revenue visibility* of $19.4m for 2019 compared to $18m last year. Looking ahead, we have a very strong pipeline and solid commercial profile in both our home USA and EU territories; coupled with rising interest from Asia through partnership activity.
We have continued to deliver on our stated strategies, winning new enterprise customers with vertical industry specialization; embedding Accolade in our blue-chip customer base as a platform of choice for applications beyond innovation; and expanding commercial reach through partnerships. Recruitment continued to be a challenge last year, with a tight market in particular for US software engineers, contributing to the cost saving. We have modified our recruitment practices in this area and are now seeing rising traction with bringing on new skilled people. Our plans for 2019 call for a number of new hires, to deliver on our planned investments, and further solidify Sopheon's leading position in our chosen market - as we drive for a fifth consecutive year of financial and strategic growth.
Financial expectations noted above are subject to the completion of year-end financial close and audit processes. Sopheon intends to issue its results for the year ended 31 December 2018, on 21 March 2019.
For further information contact:
Barry Mence (Chairman)Arif Karimjee (CFO) | Sopheon plc | + 44 (0) 1276 919 560 |
Carl Holmes / Giles Rolls (Corporate Finance)Alice Lane / Sunila de Silva (ECM) | finnCap Ltd | + 44 (0) 20 7220 0500 |
About Sopheon. Sopheon (LSE: SPE) partners with customers to provide complete enterprise innovation management solutions including software, expertise, and best practices, that enable them to achieve exceptional long-term revenue growth and profitability. Sopheon's Accolade solution provides unique, fully-integrated coverage for the entire innovation management and new product development lifecycle, including strategic innovation planning, roadmapping, idea and concept development, process and project management, portfolio management and resource planning. Sopheon's solutions have been implemented by over 200 customers with over 60,000 users in over 50 countries. Sopheon is listed on AIM, operated by the London Stock Exchange. For more information, please visit www.sopheon.com.
1 Revenue visibility is defined on page 6 of Sopheon's 2017 annual report which is available from the investor section of www.sopheon.com.
2 Market expectations mean the current forecasts from analysts that cover Sopheon, being at this time finnCap and Progressive. Links to these forecasts are available in the investor section of www.sopheon.com.
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.