StatPro ’s (SOG) portfolio analysis and asset-pricing software is one of the best tools asset managers can buy. Yet the company is in a tough patch, as it shifts its business model from selling conventional software to levying users a recurring monthly fee for a cloud-based product.
We think StatPro’s strategy will be a great move in the long run. The advantages for clients are numerous, and that’s clearly where the software industry is heading. In the short term, however, it isn’t working out as well as we had hoped. Adjusted pre-tax profit slumped 40 per cent in the first half of 2014 - even with costly currency movements stripped out. That was mainly due to increased research and development costs, as well as higher spending on sales and marketing.
That said, StatPro is seeing encouraging sales growth for its first cloud product, StatPro Revolution: annualised recurring revenues nearly doubled to £4m as the number of clients using the product jumped to 322, from 220 last year. The key, though, will be transferring clients from its flagship StatPro Seven product over to the cloud replacement version, StatPro R+, when the product launches late next year. Chief executive Justin Wheatley admits the "process of conversion is likely to take several years".
Broker Panmure Gordon expects full-year adjusted EPS to fall to 2.9p, before recovering to 3.6p next year (from 4.5p in 2013).
STATPRO (SOG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 84p | MARKET VALUE: | £57m | |
| TOUCH: | 82-86p | 12-MONTH HIGH: | 96p | LOW: 72p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 68p* | NET CASH: | £3.2m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 16.5 | 1.9 | 1.9 | 0.85 |
| 2014 | 15.7 | 1.1 | 1.0 | 0.85 |
| % change | -5 | -42 | -47 | - |
Ex-div: 8 Oct Payment: 5 Nov *Includes intangible assets of £53m, or 78p a share | ||||
