For immediate release
4 July 2005
STATPRO GROUP PLC
(“StatPro” or the “Group”)
Acquisition and Half Year Trading Update
- Acquisition of Delve, a leading supplier of enterprise and web reporting solutions to asset managers
- Solid current trading continues with encouraging outlook
In line with its strategy to develop a complementary multi-product offering, StatPro Group plc, the AIM listed provider of portfolio analytics solutions for the global asset management industry, is pleased to announce the acquisition on 1 July 2005 of Delve Limited (‘Delve’) which has developed a highly regarded enterprise and web reporting solution.
StatPro is acquiring 100% of Delve for a cash and deferred consideration, based on a multiple of revenue of the enterprise and web reporting solutions. The initial consideration payable is £0.55 million before costs. Subsequent deferred consideration will be based upon incremental recurring licence revenue and will be paid after 18 months, 24 months and 36 months, amounting to one times the incremental recurring revenue. Based on the formula, and depending on the exact timing of new contracts, the total consideration will amount to approximately two times the recurring revenue but is capped at £4.0 million in total. The consideration will be adjusted for the net assets on completion. The acquisition is being financed out of existing cash resources.
Cash alternative to deferred consideration element
In lieu of the deferred consideration element described above, there is a cash alternative option available to the vendors. The cash alternative is capable of acceptance by the vendors by 19 July 2005. The maximum cash available to the vendors pursuant to the cash alternative is £0.45 million. Should the cash alternative be taken in full by the vendors no deferred consideration would be payable. To the extent that the cash alternative is taken up in part only, the deferred consideration will be reduced pro rata by the percentage acceptance for the cash alternative. A further announcement of the result of the cash alternative will be released following its closing.
The Board is expecting that the acquisition of Delve will be earnings enhancing in 2006, the first full year of combined operations.
Background to and reasons for the acquisition
Reporting of performance and risk is now an essential part of the interaction between a fund manager and its clients. There is a competitive advantage to be gained by having excellent reporting which allows clients to drill down to obtain further detailed, accurate and timely information in an efficient and reliable way. Since early 2004, we have been working closely with Delve to market their reporting solutions as part of our client offerings. We have had some success but we believe that by combining our operations and fully integrating the product into the StatPro suite we will have even greater commercial success. The Group anticipates sales interest from both its existing client base and from other portfolio managers globally as they continuously seek to improve their portfolio performance and risk reporting.
The enterprise and web reporting solution has been developed by the team at Delve led by Jonathan Hurwitz, Managing Director, an expert in internet-based reporting solutions. Delve now has nine clients and reported revenue of approximately £300,000 in the year ended 31 March 2005, representing a growth of 25% over the previous year, and an operating loss of approximately £57,000 compared to a loss of £218,000 in the previous year. Delve is based in London and has five employees, all of whom will be retained, and it is intended to integrate the business within StatPro immediately.
Further to the trading update issued on 18 May at the time of the Company’s AGM, the Board is pleased to report that further progress has been made in May and June and that it accordingly expects a satisfactory performance in revenue growth for both the half and full year.
This reflects the marked improvement in the level of new business secured during the first six months of 2005 over the comparable period in 2004 and that the sales outlook continues to be encouraging. Continental European markets remain the strongest source of new business with approximately two thirds by value of new contracts from this region.
Since the AGM and following application to the Court we have successfully reduced the Company’s share premium account and eliminated the deficit on the profit and loss account so as to enable the payment of dividends in the future.
The Group expects to report its interim results for the six months ended 30 June 2005 on Monday 1 August 2005.
Commenting on the transaction Justin Wheatley, Chief Executive of StatPro Group, said: ‘There is considerable demand amongst fund managers to improve client reporting and Delve has some of the most sophisticated technology to meet this demand. Combined with StatPro’s growing client base and wide distribution, we are confident that the acquisition of Delve will be a success and earnings enhancing.’
Commenting on the transaction Jonty Hurwitz, MD of Delve, said: ‘I have now been working with the team at StatPro for around two years and I was pleased with the collaboration which resulted in signing our first joint client last year. The team at StatPro are focussed on developing good client relationships and I look forward to working as part of the StatPro team.’
– Ends –
For further information, please contact:
StatPro Group plc
|Justin Wheatley, Chief Executive||020 8410 9876|
|Andrew Fabian, Finance Director|
Corporate Synergy Plc
|Justin Lewis/Rhod Cruwys||020 7448 4400|
|Reg Hoare/Sarah Richardon||020 7360 4900|
Notes to Editors
StatPro Group plc is a leading provider of portfolio analytics solutions for the global asset management industry. StatPro floated on the London Stock Exchange in May 2000 and transferred its listing in June 2003 to AIM. StatPro has grown its revenue from continuing operations from £1.8 million in 1999 to £9.1 million in 2004.
Delve Limited is a software reporting development and marketing company based in London, with a revenue of £0.3 million in the year ended 31 March 2005 and is a leading supplier of enterprise and web reporting solution to asset managers.