Trading Update
Embargoed Release: 07:00hrs Thursday 28 January 2010
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,
announces that it expects revenues for the year ended 31 December 2009 to
exceed £8 million. This compares to £9.3 million in 2008, and £6.3 million in
2007. In our last update to the markets we noted that the tough economic
environment of the last few quarters was showing some signs of improvement,
with the potential to make the final quarter of 2009 the strongest of the year.
This proved to be the case, with 21 new and extension license orders in the
fourth quarter, compared to a total of 27 for the previous three quarters.
In addition to the improvement in sales, the careful adjustments that we made
to our cost base earlier in 2009 contributed to an operating result for the
second half of the year that has come in around the breakeven level.
Accordingly, while the year-end close process is not complete, initial
indications are that the Group's result for the year will be better than the
analyst expectation of a £0.5 million EBITDA loss. The gross cash balance at 31
December 2009 stood at £1.6 million.
An important factor in such tough economic times is the strength of customer
relationships, and approximately 70% of the value of new orders (excluding
recurring revenues) in 2009 was derived from our existing customers. As we
start 2010, revenue visibility for the current year already stands over £4
million* and our sales pipeline remains resilient. However, we are well aware
that, by historical standards, sales cycles are slow, and pricing is under
pressure. Accordingly, we continue to adopt a prudent stance.
As noted in earlier announcements, we have maintained investment in product and
marketing during the course of a very tough 2009. Our goal remains to be a
leader in the Product Portfolio Management (PPM) market. Analysts predict that
PPM will be the fastest growing segment of Product Lifecycle Management (PLM).
Achievements during the year include the launch of Accolade® Idea Lab™, a major
new version of Accolade Vision Strategistâ„¢, and significant enhancements to the
capabilities of the core Accolade Process Managerâ„¢ platform. We introduced new
marketing capabilities that leverage emerging channels such as social media,
and have also advanced our relationship with key commercial partners.
Financial expectations noted above are subject to completion of the year-end
financial close and audit processes. Sopheon plans to issue its preliminary
results for the year ended 31 December 2009, on 25 March 2010.
* As defined in our announcement of 25 June 2008, visibility at any point in
time comprises revenue expected from (i) closed license orders, including those
which are contracted but conditional on acceptance decisions scheduled later in
the year; (ii) contracted services business delivered or expected to be
delivered in the year; and (iii) recurring maintenance, hosting and rental
streams.
Barry Mence, Chairman, commented:
"2009 posed a number of difficult challenges to overcome. Having a profitable
fourth quarter shows that we reacted appropriately to balancing investment with
cost containment. Our current pipeline, coupled with our unique solution set
and the continued maturing of our chosen market, gives me continued confidence
in our quest to improve shareholder value."
Barry Mence, Chairman Sopheon plc Tel : + 44 (0) 1483 685 735
Arif Karimjee, CFO Sopheon plc Tel : + 44 (0) 1483 685 735
Justine James / Kirsty Hansard Communications Tel : + 44 (0) 207 245 1100
Corcoran
Floor van Maaren Citigate First Financial Tel : + 31 (0) 205 754 010
Sarah Jacobs Seymour Pierce Corporate Tel : + 44 (0) 20 7107 8000
Finance
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 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. For more information, please visit www.sopheon.com.
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