RNS Number:1680I
Statpro Group PLC
03 March 2003
Monday, 3 March 2003
STATPRO GROUP PLC
("StatPro" or the "Group")
Preliminary Results for the Year ended 31 December 2002
StatPro Group plc, a leading listed provider of performance
measurement solutions for the global asset management industry,
announces its preliminary results for the year ended 31 December
2002.
Highlights
> Turnover up 17% to #7.2 million (2001: #6.2 million)
> Operating expenses* reduced by #1.4 million and by #2.5
million on an annualised basis
> Reduced operating loss by 50% to #2.2 million (2001: #4.4
million)
> Operating cash outflow reduced by 83% to #0.5 million (2001:
#2.8 million) and generated positive operating cash inflow during
the second half of 2002
> Achieved operating profitability (before goodwill
amortisation) in fourth quarter of 2002
* before exceptional items
Commenting on the results, Carl Bacon, Chairman of StatPro said:
"Despite the slump in the asset management sector, StatPro has
made significant progress in 2002, increasing turnover by 17%,
generating positive operating cash flow in the second half and an
operating profit (before goodwill amortisation) in the final
quarter of 2002.
"We also reduced operating costs to match our annualised rental
income and, in line with our strategy of developing a
complementary multi-product offering for the global asset
management industry, we added Fixed Income Attribution to our
growing product list."
- Ends -
For further information, please contact:
StatPro Group plc
Justin Wheatley, Chief Executive On 3 March: (020) 7067 0700
Andrew Fabian, Finance Director Thereafter: (020) 8410 9876
Weber Shandwick Square Mile
Reg Hoare/Rachel Taylor (020) 7067 0700
A briefing for analysts will be held at 9.15 for 9.30am today at
the offices of Weber Shandwick I Square Mile, Fox Court, 14
Gray's Inn Road, London, WC1X 8WS.
Notes to Editors: StatPro Group plc is a leading provider of
performance measurement solutions for the global asset management
industry, which floated on the London Stock Exchange in May 2000.
StatPro has grown its recurring software revenue base by an
average of 95% compound rate per annum from less than #1.0
million to #6.3 million in three years.
CHIEF EXECUTIVE'S REVIEW
Highlights of 2002
At the start of 2002, the Board believed that economic recovery
was possible mid-way through the year, but we approached the year
with a cautious outlook. In the event, the market showed no
signs of recovery and the Board implemented a fundamental
restructuring to reduce operating costs by #2.5 million on an
annualised basis. As a result, we made a modest operating profit
(before goodwill amortisation) in the fourth quarter of 2002 and,
whilst we were not cash flow positive for the year as a whole, we
achieved a positive operating cash inflow for the second half.
Sales to existing clients accounted for about 35% of overall new
sales in 2002. This trend gathered momentum with existing clients
accounting for 50% of new sales achieved in the second half. This
was due to new modules being made available and our new structure
of dedicated commercial account managers beginning to bear fruit.
Given current market conditions, we have concentrated on
providing more focused client services as well as a reduced
development programme centered on immediate client requirements
rather than developing entirely new systems. Our objective is to
deliver improved efficiency and productivity to our clients.
Regional Performance and Outlook
As experienced during 2001, the performance in the major
financial centres was worse than that of the smaller markets in
2002. Whilst key contracts were signed in the United Kingdom (in
particular, Scotland), there was only limited success in USA,
France and Germany. In contrast, we successfully signed key
contracts in Canada, Ireland, the Netherlands, Singapore, South
Africa, Spain and Sweden.
The UK market slowed further during the second half of 2002 and
we remain cautious about the outlook for 2003 as economic
conditions remain uncertain. The major European economies,
Germany and France, both remain shrouded in economic uncertainty
but we believe that we will, nevertheless, achieve a reasonable
level of business in these two markets in 2003. The US market did
not improve in the second half as we had hoped but, at the start
of 2003, we are beginning to see signs of renewed activity. It
remains to be seen whether this is the start of a sustained
recovery but we are well placed to benefit from any improvement
in the market when growth resumes, as we have a strong US team
and solid client base.
Product Development
We launched our fixed income attribution system, StatPro Fixed
Income ("SFI"), which is an excellent product and we aim to keep
developing additional functionality so that it becomes the clear
market leader in its category.
Strategy
StatPro's strategy has always been to expand its product range to
enable cross selling of products to existing clients. We intend
to continue to pursue this approach in 2003, by seeking to
acquire further complementary products. We believe that current
market conditions are likely to yield a number of opportunities
and we will continue to review these.
Summary
It is difficult to predict the economic climate for 2003 given
all the uncertainties surrounding potential conflict in the
Middle East and other global issues. However, StatPro's business
model based on recurring revenues has provided protection from
the slump in the financial software sector and we believe it will
continue to hold us in good stead through the coming months. By
providing our clients with more efficient software, better
services and products, we aim not only to weather the markets,
but also to prosper.
Justin Wheatley
Chief Executive
OPERATING AND FINANCIAL REVIEW
Overview
We have grown revenue for the sixth consecutive half-year period
since flotation and achieved an operating profit (before goodwill
amortisation) in the fourth quarter of 2002. The continued
growth in recurring revenues over the last three years,
especially during one of the toughest trading periods in the
financial and technology markets, underlines the importance of
the StatPro business model of charging annual licence fees.
Turnover
Turnover increased by 17% to #7.23 million (2001: #6.17
million). This arose from a 45% growth in software licence
revenue offset by a fall in other revenues of 27%. Licence
revenue had been expected to grow at an even higher rate but
recognised revenue has been impacted by delays in signing new
business and a longer average lead-time for implementation and
client acceptance. The fall in other revenue arose partly as a
result of an expected reduction in non-core recurring revenue, in
particular following the termination of the Swiss agency
agreement on 1 August 2002 (resulting in annual costs savings of
approx. #0.47m), and partly as a result of lower consultancy fees
associated with new contracts compared to 2001. The split of
revenue by type was as follows:
Year to Year to Growth
31 December 31 December year on
2002 2001 year
# million # million %
Turnover
Software licences 5.52 3.82 +45
Other recurring revenue 0.75 1.17 -36
Consulting services revenue 0.96 1.18 -19
--------- ----------
7.23 6.17 +17
--------- ----------
Recurring revenue
The underlying recurring revenue from software licences at the
end of December 2002 grew to #6.28 million (2001: #5.59 million),
an increase of 12% year on year. Recurring revenue (excluding the
terminated Swiss agency revenue) increased by 10% from #6.25
million to #6.85 million. More importantly, by the end of 2002,
we had achieved a recurring revenue base, which approximately
matches our ongoing fixed cash costs.
The recurring revenue is broken down as follows:
At 31 December At 31 December Growth
2002 2001 year on
Annualised value Annualised value year
# million # million %
Recurring revenues
Software licences 6.28 5.59 +12
Other recurring revenue 0.57 0.66 -14
---------- -----------
Continuing recurring revenue 6.85 6.25 +10
---------- -----------
Recurring revenue from Swiss agency - 0.51
---------- -----------
6.85 6.76
---------- -----------
During 2002, as well as seeking new customers, we have focused on
cementing relationships with existing clients, increasing average
case size, and increasing the average length of licence
contracts. There were 42 sales of new software licences in the
year, of which 14 were new modules, upgrades or extra user
licences to existing contracts. The total number of contracts
increased from 125 at the start of the year to 142 at the end of
2002; taking into account six notified cancellations, the number
of continuing contracts is 136.
Whilst the absolute number of new contracts signed in 2002 was
lower than in 2001 we continued to increase the total revenue
(including new modules and users) per additional contract to
approximately #62,000 compared to #56,000 in 2001. We have
contracts with 87 client groups of which 20 pay a total annual
subscription exceeding #100,000 and the largest now subscribes
over #300,000 per annum (excluding non-recurring consultancy
revenue). The proportion of recurring revenue on multi-year
contracts increased from 4% at the end of 2001 to 18% at the end
of 2002.
Operating expenses
Operating expenses (before goodwill amortisation and exceptional
items) decreased to #8.83 million (2001: #10.28 million)
following the restructuring in July 2002. Indeed, our second
half operating expenses (before goodwill amortisation and
exceptional items) were #3.91 million, a significant reduction of
20% compared to the first half expenses of #4.92 million. The
exceptional one-off restructuring charge was #0.31 million.
Thus we had positive earnings before interest tax depreciation
and amortisation ('EBITDA') in the second half of 2002, as shown
in the following table:
Six months to Six months to Year to
30 June 31 December 31 December
2002 2002 2002
# million # million # million
Revenue 3.43 3.80 7.23
Operating expenses * (4.76) (3.77) (8.53)
-----------------------------------------
EBITDA (1.33) 0.03 (1.30)
Depreciation (0.16) (0.14) (0.30)
Goodwill amortisation (0.14) (0.15) (0.29)
-----------------------------------------
Operating loss (before
exceptional items) (1.63) (0.26) (1.89)
Exceptional items - (0.31) (0.31)
-----------------------------------------
Operating loss (1.63) (0.57) (2.20)
-----------------------------------------
* before depreciation, amortisation and exceptional items
The operating loss reduced by 50% to #2.20 million (2001: #4.40 million).
Interest
Net interest expense amounted to #0.17 million (2001: #0.07
million before exceptional interest - #0.34 million after
exceptional interest). The overall interest charge was lower in
2002 than 2001 because there was an exceptional interest charge
of #0.27 million in 2001, representing the difference between the
then carrying value of the original convertible loan and its
nominal value.
Taxation, Loss before tax, and Loss per share
No current liability to corporation tax is accrued, given the
accumulated tax losses incurred by Group companies. The loss
before taxation, amounting to #2.37 million (2001: #4.74
million), fell by 50%. Basic loss per share reduced by 52% to
7.3p (2001: 15.3p). The loss per share before amortisation and
exceptional items reduced by 59% to 5.5p (2001: 13.5p).
Balance Sheet
The Group's net liabilities increased to #2.81 million from a
deficit of #0.47 million at 31 December 2001. The balance sheet
includes deferred income of #4.82 million (2001: #3.63 million),
which is a non-cash liability and has a major adverse impact on
the reported net liability position of the Group balance sheet.
Goodwill
The main component of the total goodwill balance of #0.72 million
(2001: #0.95 million) arose on the acquisition of AMS S.A. in
2000. Goodwill is amortised over a five-year period.
Current assets
The level of debtors remained broadly unchanged at #3.40 million
(2001: #3.54 million). Despite the growth in business in 2002,
improved cash collection resulted in trade debtors, the major
component of debtors, being fairly flat at #2.76 million (2001:
#2.79 million). The level of cash at bank and in hand increased
to #1.49 million (2001: #1.05 million).
Creditors
The level of short-term creditors (excluding deferred income and
short-term debt) decreased by 6% to #1.35 million (2001: #1.44
million) following the reduction in the overall cost base. Long-
term creditors include #1.60 million of bank debt (2001: #1.66
million). In line with our cash generation and reduced cash
requirements we began repaying part of the amount outstanding on
the bank facility in November 2002. In accordance with FRS4, the
year-end carrying balance for the #1.00 million convertible loan
issued in July 2002 is #0.97 million (2001: nil).
Deferred income increased by 33% to #4.82 million from #3.63
million as a result of the continued growth in the annual
recurring revenue base. Of the #4.82 million, #4.61 million is
expected to be recognised in 2003.
Cash flow and Financing
We reduced our operating cash outflow and, during the second half
of 2002, we had a positive operating cash inflow. For the year
as a whole there was an operating outflow of #0.48 million, which
was significantly lower than the outflow of #2.79 million in 2001
and #4.06 million in 2000.
Share capital and reserves
The issued share capital has increased to #0.33 million
representing 32,810,986 shares of 1p nominal value (2001: #0.32
million), as a result of the issue of 565,000 shares on exercise
of share options under employee share option schemes.
Dividend
The Directors currently propose continued investment in growing
the business and are not proposing to recommend any dividend at
present.
Andrew Fabian
Finance Director
Consolidated profit and loss account
for the year ended 31 December 2002
Unaudited Audited
Note 2002 2001
#'000 #'000
Group Turnover 1 7,229 6,174
Operating expenses before goodwill
amortisation and exceptional items (8,832) (10,281)
Amortisation of goodwill (294) (292)
Exceptional items 2 (306) -
Operating expenses (9,432) (10,573)
-----------------------------------------
Operating loss (2,203) (4, 399)
Net interest payable including exceptional
item of nil (2001: #268,000) 2 (170) (343)
---------------- ----------------
Loss on ordinary activities before taxation (2,373) (4,742)
Taxation 3 - -
---------------- ----------------
Retained loss for the financial year (2,373) (4,742)
================ ================
Loss per share - basic 4 (7.3)p (15.3)p
---------------- ----------------
Loss per share - before amortisation
of goodwill and exceptional items (5.5)p (13.5)p
---------------- ----------------
The results above all relate to continuing operations
Statement of group total recognised gains and losses
Unaudited Audited
2002 2001
#'000 #'000
Retained loss for the financial year (2,373) (4,742)
Exchange differences offset in reserves (19) 71
---------------- ------------------
Total recognised gains and losses for the year (2,392) (4,671)
================ ==================
Consolidated balance sheet
at 31 December 2002
Unaudited Audited
Note 2002 2001
#'000 #'000
Fixed assets
Intangible assets 716 949
Tangible assets 674 840
---------------------- ----------------------
1,390 1,789
Current assets
Debtors
- Amounts falling due after one year 308 310
- Amounts falling due within one year 3,087 3,232
Cash at bank and in hand 1,486 1,050
---------------------- ----------------------
4,881 4,592
Creditors: amounts falling due within one year 5 (6,269) (5,183)
---------------------- ----------------------
Net current liabilities (1,388) (591)
---------------------- ----------------------
Total assets less current liabilities 2 1,198
---------------------- ----------------------
Creditors: amounts falling due after more
than one year
Deferred income (213) -
Convertible loan (971) -
Bank loans (1,602) (1,661)
Finance lease obligations (26) (3)
---------------------- ----------------------
Net liabilities (2,810) (466)
====================== ======================
Capital and reserves
Called up share capital 328 322
Share premium account 8,541 8,499
Warrant reserve 424 424
Profit and loss account (12,103) (9,711)
---------------------- ----------------------
Equity shareholders'deficit (2,810) (466)
====================== ======================
Consolidated cash flow statement
for the year ended 31 December 2002
Unaudited Audited
2002 2001
#'000 #'000
Net cash outflow from operating activities (476) (2,793)
---------------------- ----------------------
Returns on investments and servicing of finance
Interest received 22 96
Interest paid (143) (128)
Issue costs in respect of bank loan (27) (88)
Issue costs in respect of convertible loan (43) -
---------------------- ----------------------
Net cash outflow from returns on investments and
servicing of finance (191) (120)
Taxation
Tax received - 7
---------------------- ----------------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (162) (151)
---------------------- ----------------------
Net cash outflow from capital expenditure and
financial investment (162) (151)
---------------------- ----------------------
Acquisitions and disposals
Deferred consideration proceeds from disposal of
subsidiary undertaking 89 -
Cash subscription on acquisition of subsidiary undertaking (53) -
Costs incurred on acquisition of subsidiary undertaking (12) -
Cash acquired on acquisition of subsidiary undertaking 55 -
---------------------- ----------------------
Net cash inflow from acquisitions and disposals 79 -
---------------------- ----------------------
---------------------- ----------------------
Net cash outflow before management of liquid
resources and financing (750) (3,057)
Management of liquid resources
(Increase)/decrease in short-term deposits (151) 1,250
Financing
Proceeds from bank facility 250 1,800
Repayment of bank facility (51) -
Proceeds from issue of ordinary shares 48 1,742
Issue costs in respect of shares issued - (44)
Capital element of finance lease payments (61) (61)
Proceeds from issue of convertible loan 1,000 -
Convertible loan redemption - (1,720)
---------------------- ----------------------
Net cash inflow from financing 1,186 1,717
---------------------- ----------------------
Increase/(decrease) in cash in the year 285 (90)
====================== ======================
Reconciliation of operating loss to net cash outflow from operating activities
Unaudited Audited
2002 2001
#'000 #'000
Operating loss (2,203) (4,399)
Depreciation of tangible fixed assets 301 282
Amortisation of goodwill 294 292
Decrease/(increase) in debtors 58 (767)
(Decrease)/increase in creditors (excluding deferred income) (151) 131
Movement in deferred income 1,186 1,623
Loss on disposal of tangible fixed assets 58 -
Exchange differences (19) 45
---------------------- ----------------------
Net cash outflow from operating activities (476) (2,793)
====================== ======================
Reconciliation of net cash flow to movement in net debt
Unaudited Audited
2002 2001
#'000 #'000
Increase/(decrease) in cash in the year 285 (90)
Movement in short-term deposits 151 (1,250)
Issue of convertible loan (net of issue costs) (957) -
Movement on finance leases 61 61
Convertible loan redemption - 1,720
Exceptional interest charge relating to loan redemption - (268)
Bank loan (net of issue costs) (223) (1,712)
Bank loan repayment 51 -
Other non-cash movements (67) (34)
---------------------- ----------------------
Movement in net debt (699) (1,573)
Net (debt)/funds at beginning of year (729) 844
---------------------- ----------------------
Net debt at end of year (1,428) (729)
====================== ======================
Analysis of net debt
Unaudited Audited
2002 2001
#'000 #'000
Cash at bank and in hand (excluding short-term deposits) 735 450
Short-term deposits 751 600
Convertible debt (net of deferred issue costs) (971) -
Bank loan (net of deferred issue costs) (1,912) (1,719)
Finance leases (31) (60)
---------------------- ----------------------
Net debt (1,428) (729)
====================== ======================
Notes to the preliminary financial statements
1. Segmental Analysis
Analysis of revenue by destination is as follows:
Growth
Unaudited Audited year on
2002 2001 year
# million # million %
United Kingdom 2,140 1,679 +27
North America 1,213 1,025 +18
Europe 3,500 3,179 +10
Rest of the World 376 291 +29
-----------------------
Software licences 7,229 6,174 +17
-----------------------
2. Exceptional items. The exceptional charge of #0.31 million
relates to the restructuring of the business including redundancy
and associated costs. The exceptional interest charge in 2001
amounting to #0.27 million relates to the difference between the
carrying value and the nominal value of the original convertible
loan notes on redemption.
3. Taxation. No current year corporation tax has been provided
as the Group is not anticipating a corporation tax liability
given the tax losses incurred by the operating companies within
the Group.
4. Basic loss per share. Basic loss per share has been
calculated based on the loss after taxation of #2.37 million
(2001 - #4.74 million) and the weighted average number of shares
of 32,485,849 (2001 - 31,030,644). The diluted loss per share is
the same as the basic loss per share as, since the Group is
making losses, there are no potentially dilutive shares
outstanding.
5. Creditors - amounts falling due within one year. The
largest component of short-term creditors relates to deferred
income, which is a non-cash liability, as shown in the following
analysis:
Unaudited Audited
As at As at
31 December 31 December
2002 2001
#'000 #'000
Trade creditors 240 370
Bank loans and finance leases 315 115
Other creditors and accruals 690 697
Taxation and social security 418 373
Deferred income 4,606 3,628
---------- -------------
6,269 5,183
---------- -------------
This announcement was approved by the Directors on 3 March
2003. The preliminary results for the year ended 31 December
2002 are unaudited. The financial information set out in the
announcement does not constitute the Company's statutory
accounts for the years ended 31 December 2002 or 31 December
2001. The financial information for the year ended 31
December 2001 is derived from the statutory accounts for
that year, which have been delivered to the Registrar of
Companies. The auditors reported on those accounts and their
report was unqualified.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR TPMRTMMITBIJ