TIDMAPTD
RNS Number : 2264A
Aptitude Software Group PLC
20 January 2020
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation EU No. 596/2014.
20 January 2020
Aptitude Software Group plc ("Aptitude Software" or the
"Group")
Trading Update, Board Changes and Notice of Results
Aptitude Software, a specialist provider of powerful financial
management software to large global businesses, today provides an
update for the year ended 31 December 2019 and the current
financial year.
Trading Update
Aptitude Software made good progress in 2019 and expects to
report results in line with the Board's expectations.
The Group complemented a good new business performance in 2019,
weighted towards the first half of the year as explained below,
with several new contracts from existing clients as they expand the
scope of their use of Aptitude Software's products.
A current focus for the Group is the opportunity with the
Aptitude Insurance Calculation Engine ("AICE"), with several
contract wins achieved in 2019. AICE allows an insurer to perform
the calculations and detailed accounting movements they require to
be compliant with the new insurance accounting standard IFRS 17.
Recent speculation that the deadline for the implementation of IFRS
17 may be deferred by twelve months (currently effective for
periods commencing on 1 January 2022) has caused delays with a
small number of sales opportunities for AICE. These delays have had
minimal impact on 2019 recognised revenue but have suppressed
Annual Recurring Revenue ("ARR")(1) growth as at 31 December 2019
from what would otherwise have been achieved.
New business success has also been achieved with the Aptitude
Accounting Hub ("AAH") and Aptitude Revenue Management;
particularly pleasing is the number of finance transformation led
sales for AAH. A highlight in the year was the entry into an
enterprise licence agreement with an existing client who is one of
the UK's leading clearing banks. This client's use of AAH in a
growing number of its operations led to incremental licencing
requirements and further demonstrates the material value the
Group's applications can bring to organisations looking to
undertake finance transformation.
Despite the strengthening of Sterling versus the US Dollar in
the final quarter of 2019, which reduced the Group's ARR at the
year-end by GBP0.9 million, ARR increased in the year to GBP28.6
million, growth of 22% on a constant currency basis ("C/C") (31
December 2018: GBP23.5 million; 30 June 2019: GBP27.0 million (both
comparatives restated for C/C)).
A further highlight in the year was the Group's successful
inaugural user and partner conference in North America, AptConnect.
The conference was held in Boston in November with over 60
delegates and demonstrates a further step in moving the Group to an
increasingly client-centric business.
Future Investment and Outlook
Following both the re-organisation of the Group and change in
leadership in 2019, opportunities in the market, client base and
the business have been identified for additional investment.
Finance transformation, also known as digital finance, continues
to be a significant opportunity for the Group with the benefits of
an accounting hub, our key offering, being increasingly recognised
by the market. To fully realise the opportunity, development is
being increased in both functionality and technology, activity that
is being performed at our integrated centre of excellence in
Poland, the Aptitude Innovation Centre, which continues to be a
material differentiator for the Group and where a growing number of
activities are performed.
One of the other key areas of investment this year will be in
the enablement and training of our clients and partners as well as
our own people; an initiative which will accelerate the use of our
products within the existing base, ensure highly successful
implementations and, as a result, encourage wider adoption within
the market. This investment will be in both people and technology
and will also underpin our partner programme where such enablement
is a differentiating capability.
Several operational areas of the business will also be
strengthened in 2020, allowing the Group to further enhance the
services it provides to its clients. These include support,
solution management services, its SaaS offering and consultant and
partner enablement. The Group's SaaS or cloud-based offerings
continue to grow and scaling this service further is a key growth
driver for the business. Investment will also continue in the
professional services organisations responsible for the
implementation of the Group's applications in conjunction with our
clients and partners.
The acceleration in investment is to build the necessary
foundations to fully realise the opportunities that have been
identified. With the Board's overall revenue growth expectations
for 2020 unchanged, the above investments (together with the
aforementioned foreign exchange impact on ARR) are likely to result
in 2020 adjusted operating profits being marginally ahead of those
expected for 2019.
With a strong portfolio of product and service offerings,
increasing worldwide presence, a well-established partner network
and a growing proportion of higher margin recurring revenues, the
Group is well placed and is confident that growth in profits will
return to longer term trends in 2021 and following years.
Board Changes
The Board is pleased to confirm the appointment of Jeremy
Suddards as Chief Executive Officer with immediate effect following
a successful transition to the role since the announcement in July
2019. Tom Crawford retires from the Board of Aptitude Software
today but will continue to work with the Group on a part time
basis. The Board welcomes Jeremy to his new role and thanks Tom for
his exceptional contribution to the Group in recent years.
Notice of Results
Aptitude Software anticipates issuing its results for the year
ended 31 December 2019 on Wednesday 11 March 2020.
Contacts
Philip Wood, Deputy Chief Executive Officer and Chief Financial
Officer 020-7496-8196
Caroline Forde / Hilary Buchanan, Alma PR 020-3405-0205
aptitude@almapr.co.uk
(1) Annual Recurring Revenue ("ARR") is the value of Aptitude
Software's software and subscription recurring revenue at a
specific point in time, normalised to a one-year period. ARR
includes recurring revenues contracted but yet to commence and
excludes recurring revenues which are currently being received but
are known to be terminating in the future.
About Aptitude Software
Aptitude Software's innovative solutions address finance
transformation at the core complemented by regulatory-focused
applications. Our various products take data from complex systems,
typically with multiple siloed data sources across multiple
business entities, to create a unified view of finance. This allows
our clients to reap significant benefits including financial
insights, enhanced control and regulatory compliance.
Our clients include the world's largest companies, typically
organisations with complex financial data and technology
landscapes. Whilst our products are relevant for all sectors the
Group has established a strong presence in banking, insurance and
technology, media and telecom ('TMT') complemented by several
clients in a series of other industries.
The business generates revenue from its software through a
combination of licence fees (primarily annual recurring licences),
software maintenance/support, software subscriptions for its
cloud-based offerings and implementation and other support services
including solution management services. Development continues to be
performed at the Aptitude Innovation Centre in Poland with sales,
support and implementation services provided from Aptitude
Software's London headquarters and the North American and
Singaporean regional businesses.
Aptitude Software has six office locations around the world,
with clients across four continents.
www.aptitudesoftware.com
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END
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