Sopheon PLC (LON:SPE) shares tumbled in early trading on Thursday after the company’s revenue growth seemed to slow into its new financial year.
The enterprise software specialist reported in its full-year results that revenue visibility for 2019 was at US$20.6mln, up 6.7% on the year before, however, this was much less than the 33% increase from 2017 into 2018.
READ: Sopheon upgrades expectations again
The rather abrupt slowdown seemed to have spooked investors, with the shares dropping 12.8% to 1,000.5p.
This was despite a strong set of results for the year just gone, with pre-tax profits rising to US$6.4mln from US$5.1mln as revenues jumped to US$33.9mln from US$28.5mln.
The results were bang in line with upgraded expectations from an update in late-January, which had forecast revenues in excess of US$33mln.
Sopheon also hiked its dividend for the year to 3.25p per share from 2.5p in 2017.
In its outlook, the company’s chairman Barry Mence said now was the time to “accelerate investment” and solidify its position in the market, adding that its sales pipeline included “a number of large opportunities”.
House broker ups target price
In a note, Sopheon’s house broker finnCap upped its target price for the group to 1,500p from 1,400p, saying the results had been lifted by “the surge in both interest in and capabilities of [Sopheon’s] Accolade software suite appearing in 22 research reports from [research and advisory firm] Gartner and Forrester in the year”.
Speaking to Proactive, finnCap analyst Andrew Darley said he saw no reason why the group’s share price had dropped following the results, a reaction he said was "completely out of line" with the positive tone of the figures and that the 33% jump in revenue visibility in 2018 from 2017 had been an outlier due to a large number of contract wins.