13 July 2023
APTITUDE SOFTWARE GROUP PLC
('Aptitude' or the 'Group')
Trading Update, Directorate Changes and Notice of Results
Aptitude Software Group plc (LSE: APTD), the specialist provider of Finance Digitalization and Subscription Management software, today provides an update on trading for the six month period ended 30 June 2023 as well as notification of changes to the Board.
Trading Update for the six months ended 30 June 2023
The Group will show modest revenue and profit progression to H1 2023 despite the macro economic headwinds faced by the sector and the economy generally. The Board are confident that the Group will meet profit expectations for FY2023.
Annual Recurring Revenue ('ARR') grew at an annualised rate of 3% on a constant currency basis to £49.8m at 30 June 2023 (31 December 2022£50.5m, 30 June 2022: £48.1m - both restated for prevailing exchange rates at 30 June 2023). ARR growth has moderated as the higher levels of churn experienced in 2022 persisted through H1 2023 for Subscription, Billing, and Revenue Management as certain clients monitor spend as a result of wider economic uncertainty and high inflation.
Whilst this macro economic backdrop presents a near term challenge for Aptitude's heritage products as sales cycles have lengthened, the Board are confident that the requirement for greater efficiency and effectiveness strengthens the value proposition for Fynapse, which drives a lower cost of ownership for clients while increasing operational productivity. Recognising the economic circumstances, the Board took action in H1 to drive cost efficiencies across the Group whilst protecting investment in areas of strategic focus, including Fynapse.
Whilst headline growth in annualised ARR is lower than in previous periods, customer, prospect and partner feedback reinforce the opportunity presented by the Group's two strategic growth drivers of Finance Digitalization and Subscription Management. The Board particularly views the opportunity presented by Fynapse, Aptitude's next-generation fully automated finance management platform that is underpinned by the Group's strategic partnership with Microsoft, as a material accelerator of future growth. The US Telco charter client continues to make strong progress with its implementation. The strengthening pipeline of opportunities for Fynapse, both through Aptitude's strategic partnerships and through traditional avenues, supports growing confidence of future revenue growth.
Aptitude remains financially robust, with strong revenue visibility and a closing cash balance at 30 June 2023 of £24.5m (31 December 2022: £29.2m, 30 June 2022: £23.6m) and net funds of £12.2m (31 December 2022: £15.9m, 30 June 2022: £10.7m).
Board Changes
The Board announces that Jeremy Suddards, Chief Executive Officer, will be stepping down as Chief Executive Officer. Jeremy joined the Board in September 2019 and became Chief Executive Officer in January 2020. The Board would like to thank Jeremy for his work transitioning the Group from its compliance focus to a leading provider of both Finance Digitalization and Subscription Management software and for his leadership through the COVID pandemic.
Effective immediately, Alex Curran, currently Regional CEO for the Group's North American business, will join the Board and assume the role of Acting Chief Executive Officer whilst the Board conduct a formal search process. Alex joined Aptitude Software in 2008 and she has held several senior roles within the Group including leading the North American business since July 2019. In that time, Alex has overseen strong growth in North America, which now accounts for over half of the Group's recurring revenue.
Commenting on the Board changes, Ivan Martin said:
"The strategic partnership with Microsoft to integrate Fynapse and Dynamics 365 presents a significant global opportunity for the Group. With Alex's strategic sales focus and experience within the North American market, including with key clients and partners, she is well placed to drive the execution of the growing global pipeline.
On behalf of the Board, I would like to thank Jeremy for his work in transitioning the Group and wish him well for the future."
Notice of Results
Aptitude anticipates issuing its Interim Results for the six months ended 30 June 2023 on Wednesday 26 July 2023.
The person responsible for releasing this announcement is Mike Johns, Chief Financial Officer.
Contacts
Aptitude Software Group plc
Ivan Martin, Chairman 020-3687-3200
Mike Johns, Chief Financial Officer
Alex Curran, Acting CEO
Alma PR
Caroline Forde / Hilary Buchanan 020-3405-0205
Additional Information Regarding Alex Curran
Alex Curran is a non-executive director of Checkit plc, a company quoted on AIM. No further details are required to be disclosed in respect of Alex's appointment to the Board under LR 9.6.13 of the Listing Rules of the Financial Conduct Authority.
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