Proactive Investors - Run By Investors For Investors
Why invest in SOG?
StatPro Group PLC: DEEP DIVE
OVERVIEW

StatPro bags two more £1mln contracts as recurring revenues rise in 2018

Annualised recurring revenues at the firm rose 3% to £54.8mln in the 12 months to the end of September 2018 compared to the year ago period
Cloud computing
OVERVIEW: SOG The Big Picture
One of the flagship products is StatPro Revolution, an integrated, cloud-based performance and risk platform

StatPro Group PLC (LON:SOG) has bagged two contracts worth around £1mln each in the final 3 months of 2018 as the firm’s annualised recurring revenues crept upwards over the year.

The first of these was with an existing customer, a large South African financial institution, for roughly £1mln to provide StatPro’s Infovest service, in which the firm purchased a 72.7% stake in 2016.

READ: StatPro bags £1mln contract with existing customer for its Infovest service

Infovest specialises in data warehousing and reporting software for the asset management industry, a sector in which StatPro also operates.

The second win for the firm came in December in the form of a £1.12mln contract with a large European insurance group for its Revolution Delta service.

READ: StatPro jumps as it inks three-year contract with large European insurance group

Delta, which StatPro acquired from UBS in May 2017, is a risk and performance analytics service that StatPro said provided it with “scale” and significantly enhanced its product capabilities.

The group is also integrating Delta into its Revolution platform to ensure “seamless integration with no disruption to the existing service”.

Justin Wheatley, chief executive of StatPro, said that the integration would avoid disruption for the firm’s Delta clients while also allowing them to “benefit from the enhanced and broader functional capacity of Revolution".

With Delta as part of the family, StatPro's analytics service can now branch out from the middle office to the front office of asset managers.

Rising ARR in 2018

StatPro is also seeing results from its new products, reporting in a third quarter trading update that annualised recurring revenue (ARR) had risen 3% to £54.8mln in the 12 months to the end of September 2018 compared to the year ago period.

READ: StatPro trading in line as annualised recurring revenue continues to grow

The ARR includes the contribution from ODDO BHF, which was acquired at the beginning of July. The transition of the managed risk service of ODDO BHF to the company’s flagship Revolution platform is expected to have completed by the end of 2018. Once migrated, the duplicate cost of third-party software and data costs will be removed providing the additional contribution to adjusted underlying earnings (EBITDA).

Underlying ARR growth for the group’s StatPro Revolution product (excluding the impact of acquired revenue and including conversions from StatPro Seven) was 16%.

Offering “well placed” to benefit from outsourcing, says analyst

In a note at the end of November, analysts at research house Edison said StatPro’s “broadened managed service offering” left it “well placed to benefit from outsourcing trends in the asset management industry”.

“In our view, the shares look increasingly attractive, given the group’s £55mln recurring revenue book and the much reduced rating (c 15x FY19e), especially in light of the active M&A backdrop in financial software”.

Edison is forecasting revenues of £56.8mln for the full year 2018 compared to £49.3mln in 2017, while pre-tax profits are forecast to rise to £5mln from £3.3mln.

The firm also maintains a 117.5p target price on the stock.

Earnings per share (EPS), meanwhile, is expected to increase to 7p per share from 5.8p in 2017.

As of 2 January 2019, StatPro shares are trading around 111.5p with a market cap of £73.3mln.

View full SOG profile View Profile

StatPro Group PLC Timeline

Related Articles

Background check
May 13 2019
The company provides background check and medical screening solutions for employers to give them reliable information when hiring new staff.
Person watching TV on a smartphone
October 01 2018
"The business model is proving solid and with a higher percentage of revenues coming from recurrent subscriber-based licence fees, we are steadily reaching the point of profitability," said chief executive, Jose Luis Vazquez.
location map
April 02 2019
Verify helps brands detect location ad-fraud and verify the authenticity of location data to ensure their campaigns are targeting the areas they are supposed to

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use