In the midst of a perfect storm of increased regulation, higher costs, making market outperformance (‘alpha’) more challenging… StatPro Revolution is ideally placed to help.
ProgressI am pleased to report that your Company increased total annualised, recurring revenue by 4% to £29.5 million (2011: £28.5 million at constant currency) including a greatly increased contribution from StatPro Revolution of £1.5 million (2011: £0.5 million). Total revenue increased by 1% to £32.0 million (2011: £31.7 million) and despite continued expenditure on StatPro Revolution, adjusted profit before tax increased by 14% to £5.0 million (2011: £4.4 million).
FinancingYour Company raised £5.8 million (net of expenses) in a placing in November 2012 and, combined with another year of strong operating cash flow, the Group had net cash of £3.7 million at year end (2011: net debt of £3.4 million). The purpose of raising further equity was to allow increased investment in cloud services. Your Board believes that StatPro Revolution has immense potential with ‘first mover’ advantage and the plan is to capitalise on this opportunity.
DividendYour Board is proposing a final dividend of 1.9p per share for 2012 payable on 22 May 2013 to all shareholders on the register at the close of business on 26 April 2013 taking the total dividend to 2.7p per share (2011: 2.6p) an increase of 4%. We intend to maintain a progressive dividend policy.
ProductsIn 2012, total research and development expenditure was £4.2 million (2011: £5.0 million) representing 13% of Group revenue. Although total research and development expenditure decreased by 17%, following your Board’s decision to develop solely cloud-based solutions, research and development expenditure increased for StatPro Revolution and StatPro Revolution Plus (the cloud upgrade path for StatPro Seven). The total cash expenditure on StatPro Revolution including marketing and other costs incurred in 2012 amounted to £3.7 million (2011: £3.3 million).
Corporate governanceAs previously announced, Charles Fairbairn resigned from the Board of Directors with effect from 31 December 2012. Charles has been a Non-Executive Director of StatPro since April 2000 and helped prepare the Company for its stock market flotation successfully achieved in May 2000. I would like to express my deep gratitude to Charles for his contribution, advice and invaluable support over these past 12 years and wish him well in his other business ventures. I was delighted to welcome Jane Tozer OBE MBE to the Board on 1 October 2012. Jane brings with her a wealth of experience in both large and small companies, the asset management and software industries. Jane was appointed Chairman of the Audit Committee with effect from 1 January 2013.
PeopleIn what has been a transformational year for your Company, our employees have again done a fantastic job and I take this opportunity to thank them for their contribution to this transformation and for ensuring that the objectives of both the Company and of our clients are achieved.
ProspectsThe asset management industry in its broader sense, including asset owners, asset managers, advisors, administrators and custodians, is in the midst of a perfect storm of increased regulation, reducing fees, higher costs, greater demands for transparency, increased global competition, making market outperformance (‘alpha’) more challenging. Your Company, with its StatPro Revolution service, is ideally placed to provide solutions to the asset management industry to help cope with this storm. I look forward to capitalising on StatPro Revolution’s undoubted appeal in 2013.
14 March 2013