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AGM Statement
AGM Statement
At today’s Annual General Meeting of Sopheon, the international provider of software and services that help organizations generate more revenues and profits from new products, the Board will give shareholders an update and review of the business.
In conjunction with a truly exceptional financial performance in 2017, we continue to advance our strategy to be the world’s leading provider of enterprise-class innovation management solutions. Our vision has consistently led the market, and this is a market that continues to evolve and demonstrate considerable growth. We delivered a very strong finish to last year, resulting in all the Group’s headline financial measures exceeding market expectations by a significant margin. Revenues rose to $28.5m from $23.2m in 2016. On the back of an already strong increase in profitability in 2016, EBITDA last year reached $8.0m, up from $5.6m the year before, and profit before tax was $5.1m, compared to $3.0m the year before. Alongside a realignment of our debt position, this resulted in net assets rising to $18.6m from $10.4m the year before, and net cash rising to $9.5m from $4.2m.
Both volume and average value of license transactions increased compared to the year before. Towards the end of 2017 we signed substantial deals with two industry leading, blue chip companies in the USA and in Germany and we are now in the process of implementing our Accolade® solution globally in both cases. Such customers further validate the momentum and acceptance of Accolade as an enterprise platform within the largest and most influential corporations in the world. We saw more acceptance of our SaaS (Software as a Service) offering, with three new SaaS customers signed last year, and our recurring revenue base improved to over $12m by the end of the year compared to just under $10m the year before.
Sopheon’s market differentiation continues to be validated. Sopheon is the only vendor recognized in three different Gartner Market Guides — for Strategy Execution Management Software; Innovation Management Tools; and Strategy & Innovation Roadmapping Tools – as well as in its Magic Quadrant for Project Portfolio Management Worldwide. In our view, the capabilities called for in all of these respective reports are required to deliver on the promise of connecting strategic planning and operational execution. In addition, Sopheon was named a Leader in the 2017 Forrester Wave™: Strategic Portfolio Management Tools. Further recent market validation was recognition by Consumer Goods Technology magazine, naming Sopheon as “Best in Category” in new product development and introduction as voted by readers. Collectively, these are major strategic milestones in establishing the credentials of both the Company and our market.
In order to deliver on our growth strategies as described in our annual report, we are executing on ambitious investment plans across multiple functional areas to scale for growth for 2018 and beyond. Where appropriate, we are also open to consideration of targeted M&A opportunities if consistent with our goals and focused investment criteria. Alongside strategic initiatives, we remain highly driven by revenue and profit objectives, and to stand behind this ambition we have proposed a maiden dividend, to be put to the Company’s shareholders at today’s meeting. Remaining on the corporate theme, we were delighted with the success of our oversubscribed secondary placing completed in mid-May, which expanded our institutional shareholder base, and we are grateful for the support and demand shown by certain blue chip institutional investors for the Company’s shares.
Outlook
The positive momentum has continued this year, and we are signing additional new business, which in turn is underpinning the performance for the year. Full year revenue visibility for 2018 from contracted business and recurring revenue streams is now up 34% at $23.5m, compared to $17.5m at this time last year – an all-time high for our mid-year AGM report. This includes the effect of several perpetual license deals and major services extensions, as well as a further major SaaS deal closed during the current quarter.
The Board continues to be confident and enthusiastic about the prospects of the Company, the outturn for the year and the opportunity to continue to deliver on our vision.
For Further Information Contact:
Barry Mence, Chairman
Arif Karimjee, CFO Sopheon plc + 44 (0) 1276 919 560
Carl Holmes / Giles Rolls (corporate finance)
Alice Lane (corporate broking) finnCap + 44 (0) 20 7220 0500
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
About Sopheon
Sopheon (LSE: SPE) partners with customers to provide complete Enterprise Innovation Management solutions including software, expertise, and best practices, that enable them to achieve exceptional long-term revenue growth and profitability. Sopheon’s Accolade solution provides unique, fully-integrated coverage for the entire innovation management and new product development lifecycle, including strategic innovation planning, roadmapping, idea and concept development, process and project management, portfolio management and resource planning. Sopheon’s solutions have been implemented by over 250 customers with over 60,000 users in over 50 countries. Sopheon is listed on AIM, operated by the London Stock Exchange.
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June 7th, 2018
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