Sopheon plc, the international provider of software and services that improve the financial return from innovation and product development investments, announces significant progress in year-on-year operating performance. Total revenues for the year ended 31 December 2010 are expected to exceed market expectations of £10 million (2009: £8.3 million). Early indications are that the Group’s EBITDA result will also comfortably exceed market expectations of £900,000 (2009: £195,000 EBITDA loss).
Total license transactions including extension orders were 58 in 2010 (2009: 48) and license income rose to more than 37% of revenue (2009: 32%). Just over 60% of the value of new orders (excluding recurring revenues) in 2010 was derived from our existing customers, compared to 70% in 2009. This shift shows that new client acquisition is rising, reinforcing the relevance of Sopheon’s solutions in the current global economy. At the same time, the high level of add-on business from existing customers underlines both the inherent value of our solutions, and the extended business opportunity for Sopheon from each new customer we sign.
Going into 2011 we are encouraged by the strength of our sales pipeline, which remains very active. We have responded to escalating customer and market demands by positioning Sopheon to take advantage of the improving business climate. This has included a controlled expansion of staff levels. Nevertheless, our trading performance remains sensitive to the timing, value and profile of individual sales events, and we consequently approach every investment decision with an extra measure of prudence. To facilitate confident execution of our strategy, and maintain the ability to react rapidly to new market opportunities, in December we effected a major improvement to our working capital position. This involved negotiating changes to the maturity profile of the Group’s convertible loan stock, and the introduction of $2.7 million of additional working capital from our existing corporate lenders, BlueCrest Capital.
Financial expectations noted above are subject to the completion of the year-end financial close and audit processes. Sopheon plans to issue its preliminary results for the year ended 31 December 2010 on 24 March 2011.
Barry Mence, Chairman, commented:
“We are very pleased to show notable improvement in our performance during 2010. It is not yet clear that the effects of the global crisis on our markets are fully behind us, but we are encouraged by early indications for the coming year. We are entering 2011 with both the strategic and the financial strength to move forward with confidence and optimism.”
About Sopheon
Sopheon (LSE: SPE) is an international provider of software and services that help organisations 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’s solutions are used by industry leaders throughout the world, including BAE Systems, BASF, Corning, Electrolux, Honeywell, Novartis and SABMiller. Sopheon is listed on the AIM Market of the London Stock Exchange and on the Euronext in the Netherlands.
