SPE.L Regulatory News (SPE)

19 Jul 2007 07:00

Embargoed Release: 07:00hrs Thursday 19 July 2007

SOPHEON PLC (`Sopheon' or the `Group') 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.

During the first half of 2007 we gained eight new licensed customers and closed thirteen license extension orders, in addition to a number of consultancy and services contracts. Repeat orders from the customer base are an increasing feature of our business; ninety-six companies throughout the world now license our Accolade software and many continue to buy additional products and services from us. We expect to break through the milestone threshold of one hundred licensees in the third quarter.

Sales activity levels during the first half of 2007 were considerably higher than in previous years; twenty-one license transactions were completed, compared to twelve during the same period a year earlier. However, revenues reported for the period are expected to be comparable to those for the first half of 2006. We have identified two contributory factors. First, currency movements have had an effect due to the fall in the US dollar. Second, as we have noted previously, revenue performance in a particular period can vary dependent on the timing of individual transactions; in the first half of 2006, our European business closed the largest sale in the history of the Group. No singularly large sales were closed during the first half of 2007. Accordingly, although we would clearly prefer to report a period-to-period increase, the fact that we were able to achieve such revenues in spite of the factors noted above is in our view a key sign of growing maturity of the business.

As announced, the acquisition of Alignent closed on 21 June. Including Alignent, full-year revenue visibility incorporating booked revenue, contracted services business and the run rate of maintenance contracts, stands at approximately ‚£4.9m. Looking forward, the sales funnel is robust. The number of qualified prospects in our sales pipeline is up 30% compared to one year ago. It is also worth noting that there are a number of potentially large deals in today's prospect population. We remain confident that 2007 full-year performance will show substantial improvement over 2006 in both revenue and EBITDA.

The level of activity in our US business suggests that the Group is entering a new, intense stage of growth. In order to help accelerate this transition and ensure effective management of the associated expansion in scale, we have taken steps to fortify our senior-management team. During the second quarter we added executive leaders for our North American sales and client services organizations. Each brings considerable experience from Lawson Software and Oracle respectively.

We are now integrating the Alignent acquisition and look forward to leveraging the substantial opportunities for its strategic product planning solution among existing Alignent customers, Sopheon customers, and newly identified prospects in aerospace and defense markets. Due diligence prior to the acquisition indicated a clear need for improved product portfolio management among users of Alignent's solution. Accordingly, we have initiated a campaign to offer these customers the relevant Accolade modules. In the meantime, we continue to invest heavily in product development. Based on these efforts, we will introduce new versions both of Sopheon's Accolade system and Alignent's Vision Strategist by the end of the year.

Sopheon plans to issue its 2007 interim results on 6 September 2007. As in previous years, financial expectations referred to above are subject to the completion of the financial close process, and certain interim review procedures to be conducted by the Group's auditors.

For further information contact:

Barry Mence, Chairman Sopheon plc Tel : + 44 (0) 1483 685 735 Arif Karimjee, CFO Andrew Tan Hansard Group Tel : + 44 (0) 207 245 1100 + 44 (0) 7957 203 685 Frank Jansen Citigate First Financial Tel : + 31 (0) 205 754 010 About Sopheon

Sopheon is an international provider of software and services that help organizations improve the business impact of product innovation. The Sopheon Accolade‚® product innovation process and portfolio management system automates gate- or phase-based product development processes and provides strategic decision support that allows 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.