Sopheon plc, the international provider of software and services that improve the financial return from innovation and product development investments, announces further indications of performance in 2011.
As previously announced at the end of last year, revenues for the year ended 31 December 2011 are expected to be similar to the prior year at approximately £10.3 million (2010: £10.5 million). Early indications are that the Group’s EBITDA result will be broadly in line with market expectations of £1,500,000 (2010: £1,510,000). This was achieved in spite of increased resources devoted to sales, services and product development. Later in the first quarter, we expect to announce progress on important new product releases.
As detailed in an earlier announcement, a number of factors contributed to the lack of growth in revenue. The directors believe these factors are temporary and symptomatic of the sensitivity of our results to individual sales events. During 2011, total license transactions including extension orders were 54 (2010: 58). License income represented 29% of revenue (2010: 37%). An estimated 79% of the value of new orders (excluding recurring revenues) in 2011 was derived from our existing customers. This compared to 62% in 2010. Some of this shift in apportionment is explained by new customers making smaller initial investments, and then extending implementation across multiple years. Looking ahead, our sales pipeline remains very active and includes a number of substantial opportunities from both new and existing customers - including some accounts that signed initial business in 2011 - which we expect to bear fruit in 2012.
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 2011 on 22 March 2012.
Barry Mence, Chairman, commented:
“Although our top line results do not demonstrate the growth we had hoped for, we are pleased that early indications of EBITDA are in line with market expectations, and we are positive about the group’s future prospects.”
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 BASF, Cadbury, Corning, Electrolux, General Motors, Honeywell, Motorola and SABMiller. Sopheon is listed on the AIM Market of the London Stock Exchange and on the Euronext in the Netherlands.
