REG - Aptitude Software - Full Year Trading Update and Notice of Results

Aptitude SoftwareAnnouncement

22/01/2024 07:00

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RNS Number : 3628A  Aptitude Software Group PLC  22 January 2024

22 January 2024

 

Aptitude Software Group plc

("Aptitude" or the "Group")

Full Year Trading Update and Notice of Results

 

Aptitude (LSE:APTD), a market-leading provider of finance transformation
software solutions, specialising in fully autonomous finance, today provides
an update for the financial year ended 31 December 2023 and the current
financial year.

Trading Update

Aptitude made good progress in 2023 delivering profits in line with
expectations. In addition to several new business successes across the Group's
product suite, including the number one Japanese bank, the Group achieved a
series of key milestones with Fynapse, Aptitude's next generation digital
finance platform.

Key milestones for Fynapse included:

 ·             Meeting key market readiness for our Microsoft partnership with a full
               integration to D365 and enablement on the Azure cloud platform
 ·             Continued positive progress with the Telco charter client following the
               successful go-live in July 2023;
 ·             A growing number of existing AAH clients assessing migration to Fynapse,
               supporting our strategy
 ·             The signature of the Group's first new logo Fynapse client in December 2023
               with a multi-year subscription agreement; and
 ·             A strong and growing pipeline of opportunities, both with new and existing
               clients, supported by the Group's partnerships including Microsoft and others.

The Group continued to build on the new business success achieved in the first
half of 2023 securing several new major clients in the second half of the
year. These successes include:

 ·             A partner-led multi-year agreement for the Aptitude Accounting Hub with a US
               based investment management company, which will convert to Fynapse in the
               second year of the contract;
 ·             A new multi-year agreement for the Aptitude Accounting Hub with the number one
               Japanese bank to support their European operations;
 ·             A multi-year agreement for Aptitude RevStream with a UK based financial
               software company;
 ·             A multi-year renewal for a major e-Suite client with the addition of new
               divisions of the client, expected to deliver incremental ARR benefit in 2024;
               and
 ·             A material new multi-year agreement with a global existing Financial Services
               client to take Aptitude Assure, the Group's recurring managed services
               solution.

The Group continued to experience elevated churn in its Subscription, Billing
and Revenue Management products. As a result, the Group's Annual Recurring
Revenue ('ARR') grew by 2% on a constant currency basis in the year to £51.1
million (31 December 2022: £50.2 million, 30 June 2023: £49.6 million).
As previously reported, churn levels were particularly impacted by the wider
macroeconomic environment. However, on a constant currency basis, ARR on our
Finance Transformation products, AAH and Fynapse, grew at 12% year on year.

As noted at the time of the Interim Results release, the Board took action to
reduce cost in the first half of 2023 to underpin profit expectations for the
remainder of the year and increase operational efficiency in future years.
Throughout 2023, investment was protected in areas of strategic focus,
including Fynapse and its go to market capabilities.

The Group's balance sheet remains strong, with cash at 31 December
2023 of £34.1 million (31 December 2022: £29.2 million) and net funds
of £22.7 million (31 December 2022: £15.9 million) reflecting the Group's
increasing profitability and strong cash generation.

Alex Curran, CEO, has formed a new Senior Leadership Team with an associated
flattened organisational structure. An action plan has been put in place and
is being executed across all functions to accelerate revenue growth, reduce
churn, strengthen the Group's partner strategy and improve overall business
performance.

Outlook

Fynapse represents an exciting opportunity and the Board looks ahead
positively at the opportunity presented by the platform in 2024 and beyond.
Improved performance is underpinned by the Group's growing pipeline of
opportunities, strong partners and a refreshed leadership focused on improving
general business performance, reducing churn, driving strong growth in ARR and
improving margins. Additionally, the Group begins the year with £53.2 million
of revenue under contract.

The Board will monitor the wider macroeconomic situation, its potential impact
on client and new logo investment decisions and ongoing spend on professional
services. The Board intends to carefully manage investment levels in the
business, whilst protecting strategic investment in Fynapse. Whilst ongoing
churn may have an impact, ARR growth is expected to materially improve in 2024
and profit expectations remain underpinned for the year ahead.

Long term, the Board sees Fynapse as a material accelerator of Aptitude's
growth. It is encouraged by the first sale of Fynapse to a net new client at
the end of 2023, and is confident in generating further Fynapse sales, both
from new logos and across the existing base of clients, in 2024.

Notice of Results

The Group expects to issue its results for the year ended 31 December
2023 on Thursday, 21 March 2024.

A presentation for analysts will take place on the day.  Analysts wishing to
attend should contact aptitude@almastrategic.com
(mailto:aptitude@almastrategic.com)  to register.

 

Aptitude Software Group plc

Ivan Martin,
Chairman                                                                              020-3687-3200

Alex Curran, Chief Executive Officer

Mike Johns, Chief Financial Officer

Alma Strategic Communications

Caroline Forde / Hilary
Buchanan
                                 020-3405-0205

About Aptitude Software

Aptitude Software provides software solutions that deliver fully autonomous
finance to enable its clients to drive growth, efficiency and sustainability.
Fynapse is Aptitude's intelligent finance data management and accounting
platform designed to increase productivity and lower costs for finance teams
globally. Fynapse provides a single view of finance and business data,
unparalleled performance and automation, faster and better insights,
user-friendly functionality and market-leading total cost of ownership.

 

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