REG - Aptitude Software - Full Year Trading Update and Directorate Change

Aptitude SoftwareAnnouncement

24/01/2023 07:00

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RNS Number : 6076N  Aptitude Software Group PLC  24 January 2023

24 January 2023

 

Aptitude Software Group plc

("Aptitude" or the "Group")

Full Year Trading Update, Directorate Change and Notice of Results

 

Aptitude, the specialist provider of finance digitalization and subscription
management software, today provides an update for the financial year ended 31
December 2022 and the current financial year together with details of a change
to the Board.

Trading Update

Aptitude made strong progress in 2022, performing in line with market
expectations. In addition to several new business successes the Group achieved
a series of key milestones with Fynapse, Aptitude's next generation digital
finance platform.

These key milestones for Fynapse include:

·    the launch of the platform in the first half of the year, followed by
encouraging pipeline build;

·    the successful delivery of Fynapse to Aptitude's charter client in
the American telco market and their subsequent entry into a multi-year
subscription agreement; and

·    the signing of a multi-year global partnership agreement with
Microsoft to deeply integrate Fynapse with Microsoft Dynamics 365 Finance (for
further information see www.aptitudesoftware.com/news/)

The strategic global partnership with Microsoft, signed in December, has the
potential to be a material contributor to the success of Fynapse globally in
the medium and long term across all industry sectors. The combination of
Microsoft Dynamics 365 Finance and Fynapse will provide Aptitude and Microsoft
clients with the ability to unify financial data from various systems to
increase scalability, gain the agility to rapidly adopt new regulations,
automate manual processes whilst delivering better business insights and
reducing the cost of the finance function.

Building on the new business successes announced earlier in the year, the
Group has secured several new major clients in the second half of the year.
These second half successes include:

·    Four new eSuite clients across multiple sectors demonstrating the
strength and breadth of the capabilities of the subscription management
platform brought into the Group in 2021;

·    A material new multi-year agreement for the Aptitude Accounting Hub
with one of the largest Australian banks to replace their in-house finance
data warehouse and underpin their finance transformation programme; and

·    A multi-year agreement for AREV, Aptitude's leading revenue
management product, with a North American analytics software provider

Benefitting from these successes, the Group's Annual Recurring Revenue ('ARR')
grew by 15% in the year to £51.6 million (31 December 2021: £45.0 million,
30 June 2022: £49.1 million). On a Constant Currency basis ARR grew by 9% in
the year with a particularly strong performance from the Finance
Digitalization product set, underlining the strength of the long-term
opportunity for Fynapse.

The Group's balance sheet remains very strong. Following net corporate cash
outflows (dividends and loan payments) of £3.8 million in the year, cash at
31 December 2022 was £29.2 million (31 December 2021: £29.1 million) and net
funds of £15.9 million (31 December 2021: £16.1 million). Cash conversion
was below the prior year's exceptional performance with the collection of some
recurring revenue invoices extending into the new year.

Outlook

The Group has made good progress in 2022, achieving important strategic
milestones and new business successes across all regions and across the
existing product portfolio.

Notwithstanding this progress the Board is monitoring the wider economic
situation and its potential impact on our clients' and prospects' procurement
decisions. As ever, but particularly given the current economic environment,
the Board will continue to carefully manage investment levels in the business,
whilst maintaining momentum on Fynapse and the Group's other strategic
priorities, to ensure profit expectations for 2023 are unchanged.

The Group is confident that Fynapse will accelerate Aptitude's growth in the
medium and long term whilst also generating the expected higher gross margins
due to the cloud native technologies on which the platform is built.

Board Change

The Board announces that Philip Wood, Deputy Chief Executive and Chief
Financial Officer, will be retiring from the Board in July 2023. Philip joined
the Board in 2007 and after 16 years with the Group is planning a career
sabbatical to spend more time with his young family. The Board is very
grateful for his key role in transforming the Group to focus on the Aptitude
brand and the expansion of the product range, laying the foundations for
Fynapse and the addition of revenue and subscription management.

As a result, the Board is pleased to announce that from today, Mike Johns,
currently Finance Director of the Group's business outside of North America,
will assume the role of Acting Chief Financial Officer whilst a formal
selection process is conducted. Philip's financial responsibilities will now
transfer to Mike with Philip providing on-going handover support. Philip will
continue his responsibilities as Deputy Chief Executive Officer until his
departure in July.

Mike will be available to meet shareholders at the time of Aptitude's
preliminary results as part of the Group's results roadshow.

Notice of Results

The Group expects to issue its results for the year ended 31 December 2022 on
Tuesday, 21 March 2023.

A presentation for analysts will take place at 10.00 a.m. on the day.
Analysts wishing to attend should contact aptitude@almapr.co.uk to register.

 

Aptitude Software Group plc

Ivan Martin,
Chairman
020-3687-3200

Jeremy Suddards, Chief Executive Officer

Philip Wood, Deputy Chief Executive Officer

Mike Johns, Acting Chief Financial Officer

Alma PR

Caroline Forde / Hilary
Buchanan
 
020-3405-0205

About Aptitude Software

Aptitude helps complex organizations automate and transform their financial
business models. Our core areas of focus are the accelerating digitalization
of the finance function, and the cross-industry drive to deploy and manage
subscription offerings. Aptitude also continues to support clients through
complex regulations which often form the catalyst for broader finance
transformation.

Finance digitalization enables finance leaders to automate manual processes,
improve the speed of their function, enhance the quality of its outcomes, and
do so at a lower cost. Aptitude's products draw data from complex, often
siloed systems, automate its processing through complex accounting
calculations, and create a unified view of finance. Businesses are left with a
transparent view of their data, delivered at extreme performance and at a
lower cost of ownership improving their finance functions' ability to support
their business objectives.

Subscription management is a rapidly increasingly critical driver for new and
traditional businesses alike, who need to launch new offerings frequently, in
ways which appeal to their customers and allow them to outperform their peers.
Aptitude's products power the acquisition, monetization, and retention of
subscribers straight through to revenue reporting. With Aptitude, businesses
can take new subscriptions to market quickly, retain their high-value
recurring revenue, and stay one step ahead of the competition. Whilst business
to consumer (B2C) subscription models are increasing all the time, Aptitude
also specialises in business to business (B2B) subscriptions which are
undergoing significant business model shifts post pandemic, increasing volume
and complexity to manage.

Our global client base includes some of the world's largest companies,
typically organisations with complex business models, large volumes of data,
and numerous internal systems. Aptitude is headquartered in London, has a
strong and growing North American presence, and is powered by Global
Innovation Centres in Poland and the North West of England. Sales, support and
implementation services are provided from offices in the United States, the
United Kingdom, Canada, and Singapore. www.aptitudesoftware.com
(http://www.aptitudesoftware.com)

Throughout this announcement:

(1) Annual Recurring Revenue ('ARR') is the value of Aptitude's recurring
revenue at a specific point in time, normalised to a one-year period. ARR
includes recurring revenues contracted but yet to commence and excludes
recurring revenues which are currently being received but are known to be
terminating in the future. Included in ARR, for the first time, are recurring
revenues from the Group's solution management services, comparatives have been
adjusted to include such recurring revenue contracts.

2 Constant Currency is calculated by comparing the 2022 ARR at 31 December
2022 with 2021 position retranslated at the rates of exchange prevailing at 31
December 2022.

 

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