StatPro Group PLC – Final Results

For immediate release
3 March 2003


(“StatPro” or the “Group”)

Preliminary Results for the Year ended 31 December 2002

StatPro Group plc, a leading listed provider of performance measurement solutions for the global asset management industry, announces its preliminary results for the year ended 31 December 2002.


  • Turnover up 17% to £7.2 million (2001: £6.2 million)
  • Operating expenses* reduced by £1.4 million and by £2.5 million on an annualised basis
  • Reduced operating loss by 50% to £2.2 million (2001: £4.4 million)
  • Operating cash outflow reduced by 83% to £0.5 million (2001: £2.8 million) and generated positive operating cash inflow during the second half of 2002
  • Achieved operating profitability (before goodwill amortisation) in fourth quarter of 2002

* before exceptional items

Commenting on the results, Carl Bacon, Chairman of StatPro said: “Despite the slump in the asset management sector, StatPro has made significant progress in 2002, increasing turnover by 17%, generating positive operating cash flow in the second half and an operating profit (before goodwill amortisation) in the final quarter of 2002. “We also reduced operating costs to match our annualised rental income and, in line with our strategy of developing a complementary multi-product offering for the global asset management industry, we added Fixed Income Attribution to our growing product list.”

– Ends –

For further information, please contact:

StatPro Group plc

Justin Wheatley, Chief Executive 020 8410 9876
Andrew Fabian, Finance Director

Weber Shandwick Square Mile

Reg Hoare/Rachel Taylor 020 7067 0700

A briefing for analysts will be held at 9.15 for 9.30am today at the offices of Weber Shandwick I Square Mile, Fox Court, 14 Gray’s Inn Road, London, WC1X 8WS.

Notes to Editors:

StatPro Group plc is a leading provider of performance measurement solutions for the global asset management industry, which floated on the London Stock Exchange in May 2000. StatPro has grown its recurring software revenue base by an average of 95% compound rate per annum from less than £1.0 million to £6.3 million in three years.


Highlights of 2002

At the start of 2002, the Board believed that economic recovery was possible mid-way through the year, but we approached the year with a cautious outlook. In the event, the market showed no signs of recovery and the Board implemented a fundamental restructuring to reduce operating costs by £2.5 million on an annualised basis. As a result, we made a modest operating profit (before goodwill amortisation) in the fourth quarter of 2002 and, whilst we were not cash flow positive for the year as a whole, we achieved a positive operating cash inflow for the second half.

Sales to existing clients accounted for about 35% of overall new sales in 2002. This trend gathered momentum with existing clients accounting for 50% of new sales achieved in the second half. This was due to new modules being made available and our new structure of dedicated commercial account managers beginning to bear fruit.

Given current market conditions, we have concentrated on providing more focused client services as well as a reduced development programme centered on immediate client requirements rather than developing entirely new systems. Our objective is to deliver improved efficiency and productivity to our clients.

Regional Performance and Outlook

As experienced during 2001, the performance in the major financial centres was worse than that of the smaller markets in 2002. Whilst key contracts were signed in the United Kingdom (in particular, Scotland), there was only limited success in USA, France and Germany. In contrast, we successfully signed key contracts in Canada, Ireland, the Netherlands, Singapore, South Africa, Spain and Sweden.

The UK market slowed further during the second half of 2002 and we remain cautious about the outlook for 2003 as economic conditions remain uncertain. The major European economies, Germany and France, both remain shrouded in economic uncertainty but we believe that we will, nevertheless, achieve a reasonable level of business in these two markets in 2003. The US market did not improve in the second half as we had hoped but, at the start of 2003, we are beginning to see signs of renewed activity. It remains to be seen whether this is the start of a sustained recovery but we are well placed to benefit from any improvement in the market when growth resumes, as we have a strong US team and solid client base.

Product Development

We launched our fixed income attribution system, StatPro Fixed Income (“SFI”), which is an excellent product and we aim to keep developing additional functionality so that it becomes the clear market leader in its category.


StatPro’s strategy has always been to expand its product range to enable cross selling of products to existing clients. We intend to continue to pursue this approach in 2003, by seeking to acquire further complementary products. We believe that current market conditions are likely to yield a number of opportunities and we will continue to review these.


It is difficult to predict the economic climate for 2003 given all the uncertainties surrounding potential conflict in the Middle East and other global issues. However, StatPro’s business model based on recurring revenues has provided protection from the slump in the financial software sector and we believe it will continue to hold us in good stead through the coming months. By providing our clients with more efficient software, better services and products, we aim not only to weather the markets, but also to prosper.

Justin Wheatley
Chief Executive



We have grown revenue for the sixth consecutive half-year period since flotation and achieved an operating profit (before goodwill amortisation) in the fourth quarter of 2002. The continued growth in recurring revenues over the last three years, especially during one of the toughest trading periods in the financial and technology markets, underlines the importance of the StatPro business model of charging annual licence fees.


Turnover increased by 17% to £7.23 million (2001: £6.17 million). This arose from a 45% growth in software licence revenue offset by a fall in other revenues of 27%. Licence revenue had been expected to grow at an even higher rate but recognised revenue has been impacted by delays in signing new business and a longer average lead-time for implementation and client acceptance. The fall in other revenue arose partly as a result of an expected reduction in non-core recurring revenue, in particular following the termination of the Swiss agency agreement on 1 August 2002 (resulting in annual costs savings of approx. £0.47m), and partly as a result of lower consultancy fees associated with new contracts compared to 2001. The split of revenue by type was as follows:

Year to        Year to         Growth
                              31 December    31 December        year on
                                     2002           2001           year
                                £ million     £  million              %

Software licences                    5.52           3.82            +45
Other recurring revenue              0.75           1.17            -36
Consulting services revenue          0.96           1.18            -19
                                  ---------      ----------
                                     7.23           6.17            +17
                                  ---------      ----------

Recurring revenue

The underlying recurring revenue from software licences at the end of December 2002 grew to £6.28 million (2001: £5.59 million), an increase of 12% year on year. Recurring revenue (excluding the terminated Swiss agency revenue) increased by 10% from £6.25 million to £6.85 million. More importantly, by the end of 2002, we had achieved a recurring revenue base, which approximately matches our ongoing fixed cash costs.

The recurring revenue is broken down as follows:

 At 31 December        At 31 December        Growth
                                        2002                 2001        year on
                            Annualised value     Annualised value           year
                                   £ million            £ million              %

Recurring revenues
Software licences                       6.28                 5.59            +12
Other recurring revenue                 0.57                 0.66            -14
                                     ----------           -----------
Continuing recurring revenue            6.85                 6.25            +10
                                     ----------           -----------
Recurring revenue from Swiss agency        -                 0.51
                                     ----------           -----------
                                        6.85                 6.76
                                     ----------           -----------

During 2002, as well as seeking new customers, we have focused on cementing relationships with existing clients, increasing average case size, and increasing the average length of licence contracts. There were 42 sales of new software licences in the year, of which 14 were new modules, upgrades or extra user licences to existing contracts. The total number of contracts increased from 125 at the start of the year to 142 at the end of 2002; taking into account six notified cancellations, the number of continuing contracts is 136.

Whilst the absolute number of new contracts signed in 2002 was lower than in 2001 we continued to increase the total revenue (including new modules and users) per additional contract to approximately £62,000 compared to £56,000 in 2001. We have contracts with 87 client groups of which 20 pay a total annual subscription exceeding £100,000 and the largest now subscribes over £300,000 per annum (excluding non-recurring consultancy revenue). The proportion of recurring revenue on multi-year contracts increased from 4% at the end of 2001 to 18% at the end of 2002.

Operating expenses

Operating expenses (before goodwill amortisation and exceptional items) decreased to £8.83 million (2001: £10.28 million) following the restructuring in July 2002. Indeed, our second half operating expenses (before goodwill amortisation and exceptional items) were £3.91 million, a significant reduction of 20% compared to the first half expenses of £4.92 million. The exceptional one-off restructuring charge was £0.31 million.

Thus we had positive earnings before interest tax depreciation and amortisation (‘EBITDA’) in the second half of 2002, as shown in the following table:

Six months to   Six months to      Year to
                                    30 June     31 December  31 December
                                       2002            2002         2002
                                  £ million       £ million    £ million

Revenue                                3.43            3.80         7.23
Operating expenses *                  (4.76)          (3.77)       (8.53)
EBITDA                                (1.33)           0.03        (1.30)
Depreciation                          (0.16)          (0.14)       (0.30)
Goodwill amortisation                 (0.14)          (0.15)       (0.29)
Operating loss (before
exceptional items)                    (1.63)          (0.26)       (1.89)
Exceptional items                         -           (0.31)       (0.31)
Operating loss                        (1.63)          (0.57)       (2.20)

* before depreciation, amortisation and exceptional items

The operating loss reduced by 50% to £2.20 million (2001: £4.40 million).


Net interest expense amounted to £0.17 million (2001: £0.07 million before exceptional interest – £0.34 million after exceptional interest). The overall interest charge was lower in 2002 than 2001 because there was an exceptional interest charge of £0.27 million in 2001, representing the difference between the then carrying value of the original convertible loan and its nominal value.

Taxation, Loss before tax, and Loss per share

No current liability to corporation tax is accrued, given the accumulated tax losses incurred by Group companies. The loss before taxation, amounting to £2.37 million (2001: £4.74 million), fell by 50%. Basic loss per share reduced by 52% to 7.3p (2001: 15.3p). The loss per share before amortisation and exceptional items reduced by 59% to 5.5p (2001: 13.5p).

Balance Sheet

The Group’s net liabilities increased to £2.81 million from a deficit of £0.47 million at 31 December 2001. The balance sheet includes deferred income of £4.82 million (2001: £3.63 million), which is a non-cash liability and has a major adverse impact on the reported net liability position of the Group balance sheet.


The main component of the total goodwill balance of £0.72 million (2001: £0.95 million) arose on the acquisition of AMS S.A. in 2000.Goodwill is amortised over a five-year period.

Current assets

The level of debtors remained broadly unchanged at £3.40 million (2001: £3.54 million). Despite the growth in business in 2002, improved cash collection resulted in trade debtors, the major component of debtors, being fairly flat at £2.76 million (2001: £2.79 million). The level of cash at bank and in hand increased to £1.49 million (2001: £1.05 million).


The level of short-term creditors (excluding deferred income and short-term debt) decreased by 6% to £1.35 million (2001: £1.44 million) following the reduction in the overall cost base. Long- term creditors include £1.60 million of bank debt (2001: £1.66 million). In line with our cash generation and reduced cash requirements we began repaying part of the amount outstanding on the bank facility in November 2002. In accordance with FRS4, the year-end carrying balance for the £1.00 million convertible loan issued in July 2002 is £0.97 million (2001: nil).

Deferred income increased by 33% to £4.82 million from £3.63 million as a result of the continued growth in the annual recurring revenue base. Of the £4.82 million, £4.61 million is expected to be recognised in 2003.

Cash flow and Financing

We reduced our operating cash outflow and, during the second half of 2002, we had a positive operating cash inflow. For the year as a whole there was an operating outflow of £0.48 million, which was significantly lower than the outflow of £2.79 million in 2001 and £4.06 million in 2000.

Share capital and reserves

The issued share capital has increased to £0.33 million representing 32,810,986 shares of 1p nominal value (2001: £0.32 million), as a result of the issue of 565,000 shares on exercise of share options under employee share option schemes.


The Directors currently propose continued investment in growing the business and are not proposing to recommend any dividend at present.

Andrew Fabian
Finance Director

Consolidated profit and loss account for the year ended 31 December 2002

Unaudited                   Audited
                                            Note           2002                      2001
                                                          £'000                     £'000

Group Turnover                                1           7,229                     6,174

 Operating expenses before goodwill
 amortisation and exceptional items                      (8,832)                  (10,281)
 Amortisation of goodwill                                  (294)                     (292)
 Exceptional items                            2            (306)                        -

Operating expenses                                       (9,432)                  (10,573)

Operating loss                                           (2,203)                  (4, 399)

Net  interest payable including exceptional
item of nil  (2001: £268,000)                 2            (170)                     (343)
                                                     ----------------         ----------------
Loss   on  ordinary  activities before taxation          (2,373)                   (4,742)

Taxation                                      3               -                         -
                                                     ----------------         ----------------
Retained loss for the financial year                     (2,373)                   (4,742)
                                                     ================         ================

Loss per share - basic                        4            (7.3)p                   (15.3)p
                                                     ----------------         ----------------
Loss per share - before amortisation
of goodwill and exceptional items                          (5.5)p                   (13.5)p
                                                     ----------------         ----------------

The results above all relate to continuing operations

Statement of group total recognised gains and losses

 Unaudited                   Audited
                                                             2002                      2001
                                                            £'000                     £'000
Retained loss for the financial year                       (2,373)                   (4,742)
Exchange differences offset in reserves                       (19)                       71
                                                     ----------------          ------------------
Total  recognised gains  and  losses for the year          (2,392)                   (4,671)
                                                     ================          ==================

Consolidated balance sheet at 31 December 2002

 Unaudited                    Audited
                                             Note            2002                       2001
                                                            £'000                      £'000

Fixed assets
Intangible assets                                             716                        949
Tangible assets                                               674                        840
                                                     ----------------------     ----------------------
                                                            1,390                      1,789
Current assets
- Amounts falling due after one year                          308                        310
- Amounts falling due within one year                       3,087                      3,232
Cash at bank and in hand                                    1,486                      1,050
                                                     ----------------------     ----------------------
                                                            4,881                      4,592
Creditors: amounts falling due within one year 5           (6,269)                    (5,183)
                                                     ----------------------     ----------------------
Net current liabilities                                    (1,388)                      (591)
                                                     ----------------------     ----------------------
Total assets less current liabilities                           2                      1,198
                                                     ----------------------     ----------------------
Creditors: amounts falling  due after more
than one year

Deferred income                                              (213)                         -
Convertible loan                                             (971)                         -
Bank loans                                                 (1,602)                    (1,661)
Finance lease obligations                                     (26)                        (3)
                                                     ----------------------     ----------------------
Net liabilities                                            (2,810)                      (466)
                                                     ======================     ======================

Capital and reserves
Called up share capital                                       328                        322
Share premium account                                       8,541                      8,499
Warrant reserve                                               424                        424
Profit and loss account                                   (12,103)                    (9,711)
                                                     ----------------------     ----------------------
Equity shareholders'deficit                                (2,810)                      (466)
                                                     ======================     ======================

Consolidated cash flow statement for the year ended 31 December 2002

Unaudited                    Audited
                                                             2002                       2001
                                                            £'000                      £'000

Net cash outflow from operating activities                   (476)                    (2,793)
                                                     ----------------------     ----------------------
Returns on investments and servicing of finance
Interest received                                              22                         96
Interest paid                                                (143)                      (128)
Issue costs in respect of bank loan                           (27)                       (88)
Issue costs in respect of convertible loan                    (43)                         -
                                                     ----------------------     ----------------------
Net cash outflow from returns on investments and
servicing of finance                                         (191)                      (120)

Tax received                                                    -                          7
                                                     ----------------------     ----------------------
Capital expenditure and financial investment
Purchase of tangible fixed assets                            (162)                      (151)
                                                     ----------------------     ----------------------
Net cash outflow from capital expenditure and
financial investment                                         (162)                      (151)
                                                     ----------------------     ----------------------
Acquisitions and disposals
Deferred consideration proceeds from disposal of
subsidiary undertaking                                         89                          -
Cash subscription on acquisition of subsidiary undertaking    (53)                         -
Costs incurred on acquisition of subsidiary undertaking       (12)                         -
Cash acquired on acquisition of subsidiary undertaking         55                          -
                                                     ----------------------     ----------------------
Net cash inflow from acquisitions and disposals                79                          -
                                                     ----------------------     ----------------------

                                                     ----------------------     ----------------------
Net cash outflow before management of liquid
resources and financing                                      (750)                    (3,057)

Management of liquid resources
(Increase)/decrease in short-term deposits                   (151)                     1,250

Proceeds from bank facility                                   250                      1,800
Repayment of bank facility                                    (51)                         -
Proceeds from issue of ordinary shares                         48                      1,742
Issue costs in respect of shares issued                         -                        (44)
Capital element of finance lease payments                     (61)                       (61)
Proceeds from issue of convertible loan                     1,000                          -
Convertible loan redemption                                     -                     (1,720)
                                                     ----------------------     ----------------------
Net cash inflow from financing                              1,186                      1,717
                                                     ----------------------     ----------------------
Increase/(decrease) in cash in the year                       285                        (90)
                                                     ======================     ======================

Reconciliation of operating loss to net cash outflow from operating activities

Unaudited                    Audited
                                                             2002                       2001
                                                            £'000                      £'000

Operating loss                                             (2,203)                    (4,399)
Depreciation of tangible fixed assets                         301                        282
Amortisation of goodwill                                      294                        292
Decrease/(increase) in debtors                                 58                       (767)
(Decrease)/increase in creditors (excluding deferred income) (151)                       131
Movement in deferred income                                 1,186                      1,623
Loss on disposal of tangible fixed assets                      58                          -
Exchange differences                                          (19)                        45
                                                     ----------------------     ----------------------
Net cash  outflow  from  operating activities                (476)                    (2,793)
                                                     ======================     ======================

Reconciliation of net cash flow to movement in net debt

 Unaudited                    Audited
                                                             2002                       2001
                                                            £'000                      £'000

Increase/(decrease) in cash in the year                       285                        (90)
Movement in short-term deposits                               151                     (1,250)
Issue  of convertible loan (net of issue costs)              (957)                         -
Movement on finance leases                                     61                         61
Convertible loan redemption                                     -                      1,720
Exceptional interest charge relating to loan redemption         -                       (268)
Bank loan (net of issue costs)                               (223)                    (1,712)
Bank loan repayment                                            51                          -
Other non-cash movements                                      (67)                       (34)
                                                     ----------------------     ----------------------
Movement in net debt                                         (699)                    (1,573)

Net (debt)/funds at beginning of year                        (729)                       844

                                                     ----------------------     ----------------------
Net debt at end of year                                    (1,428)                      (729)
                                                     ======================     ======================

Analysis of net debt

 Unaudited                    Audited
                                                             2002                       2001
                                                            £'000                      £'000

Cash at bank and in hand (excluding short-term deposits)      735                        450
Short-term deposits                                           751                        600
Convertible debt (net of deferred issue costs)               (971)                         -
Bank loan (net of deferred issue costs)                    (1,912)                    (1,719)
Finance leases                                                (31)                       (60)
                                                     ----------------------     ----------------------
Net debt                                                   (1,428)                      (729)
                                                     ======================     ======================

Notes to the preliminary financial statements

1. Segmental Analysis Analysis of revenue by destination is as follows:

                              Unaudited    Audited    year on
                                   2002       2001       year
                              £ million  £ million         %

     United Kingdom               2,140      1,679       +27
     North America                1,213      1,025       +18
     Europe                       3,500      3,179       +10
     Rest of the World              376        291       +29
     Software licences            7,229      6,174       +17

2. Exceptional items. The exceptional charge of £0.31 million relates to the restructuring of the business including redundancy and associated costs. The exceptional interest charge in 2001 amounting to £0.27 million relates to the difference between the carrying value and the nominal value of the original convertible loan notes on redemption.

3. Taxation. No current year corporation tax has been provided as the Group is not anticipating a corporation tax liability given the tax losses incurred by the operating companies within the Group.

4. Basic loss per share. Basic loss per share has been calculated based on the loss after taxation of £2.37 million (2001 – £4.74 million) and the weighted average number of shares of 32,485,849 (2001 – 31,030,644). The diluted loss per share is the same as the basic loss per share as, since the Group is making losses, there are no potentially dilutive shares outstanding.

5. Creditors – amounts falling due within one year. The largest component of short-term creditors relates to deferred income, which is a non-cash liability, as shown in the following analysis:


                                      Unaudited       Audited
                                          As at         As at
                                    31 December   31 December
                                           2002          2001
                                          £'000         £'000

     Trade creditors                        240           370
     Bank loans and finance leases          315           115
     Other creditors and accruals           690           697
     Taxation and social security           418           373
     Deferred income                      4,606         3,628
                                       ----------    -------------
                                          6,269         5,183
                                       ----------    -------------

This announcement was approved by the Directors on 3 March 2003. The preliminary results for the year ended 31 December 2002 are unaudited. The financial information set out in the announcement does not constitute the Company’s statutory accounts for the years ended 31 December 2002 or 31 December 2001. The financial information for the year ended 31 December 2001 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The auditors reported on those accounts and their report was unqualified.

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