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Outsourcing to benefit StatPro

The group expects to capitalise on the asset management industry’s outsourcing of non-core activities
August 1, 2018

For StatPro (SOG) – which provides portfolio analytics and asset pricing services – first-half revenues were buoyed by strong growth within its flagship cloud-based platform, Revolution. Indeed, sales here rose 15 per cent organically. Add in the contribution of Delta, the business acquired from UBS (SW:UBSG) last year, and the rate came in at 63 per cent year on year – reaching £14.4m. Perhaps most encouragingly, annualised recurring revenues for Revolution grew 19 per cent – against just 9 per cent a year earlier.

IC TIP: Buy at 163p

Delta’s integration into Revolution is going well. The transition from UBS’s systems will take place over three to five years, but good progress was made over the six months, with StatPro launching a beta version of ‘Revolution Fixed Income Attribution’.

StatPro says it has positioned itself to benefit from the asset management market’s trend towards outsourcing non-core activities, including regulatory reporting. Indeed, StatPro now offers managed services and pre-sales support. And it bought the regulatory risk services bureau of the ODDO BHF bank in Frankfurt in July 2018, for up to €1.42m (£1.26m). Accordingly, it not only gained new clients in Germany and additional risk expertise, but also added to its existing managed services for valuations and performance measurement.

Broker Panmure Gordon expects adjusted pre-tax profits of £5.7m and EPS of 7.4p for 2018 (from £3.4m and 5.7p in 2017).

STATPRO (SOG)   
ORD PRICE:163pMARKET VALUE:£107m
TOUCH:161-164p12-MONTH HIGH:188pLOW: 133p
DIVIDEND YIELD:1.8%PE RATIO:na
NET ASSET VALUE:45p*NET DEBT:78%
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2017**22.4-1.5-2.40.85
201827.20.91.10.85
% change+22---
Ex-div:4 Oct   
Payment:7 Nov   
*Includes intangible assets of £63.4m, or 96p a share.  **2017 numbers restated