SPE.L Regulatory News (SPE)

10 Jan 2006 07:00

Embargoed Release: 07:00hrs Tuesday 10th January 2006 SOPHEON PLC ("Sopheon") TRADING UPDATE Sopheon plc, the international provider of solutions that improve the returnfrom innovation and product development, announces that revenues for the secondhalf of 2005 are expected to be 40% higher than the ‚£1.9m reported for thefirst six months of the year. We closed 18 license transactions includingextension orders in the period, taking the total number of licensed customersto 70. Revenue growth in the US was particularly strong with turnover 60%higher than in the first half of the year. The revenue increase is expected toreduce the group's EBITDA losses for the second half of 2005 to under a thirdof the ‚£0.8m reported for the first six months. This expectation would havebeen for a breakeven second half, but for additional subcontractor costsincurred to deliver on services business which continued to run ahead ofhistoric trends.The above performance does not fully reflect the strength of our underlyingcommercial progress. In addition to the business closed last year, we have inhand conditional contracts and commitments that represent overall salespotential of the order of ‚£2m, of which approximately half could come throughin the shorter term. Originally targeted for completion in 2005, this business,together with other opportunities under negotiation, provides a strong positionto start the new year. In addition, our annual maintenance base coming into2006 has grown to over ‚£1.3m.Sopheon's strategic partnership with Microsoft is producing tangible businessimpact, with three Accolade license sales aided by support from Microsoft'ssales team. Seven new active business opportunities are a direct result ofjoint marketing at Microsoft events and such marketing activity will continuein 2006. Later this month, for example, Sopheon will be among a select group ofpartners that will be featured at the Microsoft Office Project 2006 Conferencefor end-users and partners in Seattle. During the period we also received freshmarket affirmation from IDC, a global IT research and advisory firm, whichcredited Sopheon with first-mover status for our actions to capitalize on theconvergence of the product life cycle management and portfolio managementmarkets.On the corporate front, Sopheon recently completed the full conversion of itsconvertible loan note, and renewed the group's ¢â€š¬10m equity line facility withGEM Global Yield Fund through December 2007.Financial expectations noted above are subject to the completion of theyear-end financial close process. Consistent with prior years, Sopheon plans toissue its 2005 preliminary results in early April. This will be brought forwarddepending on the speed with which the conversion to International FinancialReporting Standards is completed.Sopheon's Chairman, Barry Mence said:"While achieving 40% growth compared to the first half of the year is aconsiderable improvement, we are disappointed that continued sensitivity to thetiming of individual deals prevented us from exceeding even this performance,and that we were not able to achieve market expectations for earnings.Nevertheless, the extent of commercial activity in which we are engagedunderpins our continued confidence in the direction of our business. We look tofurther cement our leading position in our target markets as we move towardsthe important milestone of 100 licensed customers."For further information contact:Barry Mence, Chairman Sopheon plc Tel : + 44 (0) 1483 685 735 Arif Karimjee, CFO Adam Reynolds Hansard Communications Tel : + 44 (0) 207 245 1100 Andrew Tan + 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 product development. TheSopheon Accolade‚® product development system automates gate- or phase-basedproduct development (PD) processes and provides strategic decision support thatallows companies to improve innovation, cut product development spending wasteand shorten time to market. Sopheon is listed on the AIM market of the LondonStock Exchange and on the Euronext in the Netherlands. For more information,please visit www.sopheon.com.ENDSOPHEON PLC