25th Mar 2019 09:26
LONDON (Alliance News) - Microgen PLC is to separate and list on AIM its Financial Systems business, the software firm said on Monday, after a strategic review.
Microgen, which will change its name to Aptitude Software Group, said a simpler and more focused business will benefit both Microgen's Aptitude Software arm and Financial Systems.
Both have historically benefited from being combined, Microgen continued, but a listing for Financial Systems, targeting for some time during 2019, is now seen as the best way forward for both of its businesses.
Microgen Senior Non-Executive Director Peter Whiting will chair Financial Systems, leaving the board of Microgen, while the unit's Chief Operating Officer Robert Browning will become chief executive of the spun-off business.
Microgen Chair Ivan Martin said: "The proposed demerger and admission to trading on AIM of Microgen Financial Systems will represent a significant milestone in the strategic development of the group."
"The board believes the demerger enhances the long-term prospects of both businesses for the benefit of their shareholders, clients and employees. It will simplify the group allowing the higher growth Aptitude Software business with its specialised financial management software applications to be the sole focus going forwards whilst Microgen Financial Systems looks forward positively to its future as a focused independent software business based on its leading product, Microgen 5Series."
"The precise mechanics of the demerger and listing will be communicated in due course but is expected to be completed in the current calendar year," he added.
Microgen also released its 2018 results on Monday, showing a 12% increase in revenue to GBP70.3 million, while pretax profit climbed 42% to GBP16.3 million.
It is to pay a final dividend of 4.40 pence, taking the total for the year to 6.60p, 6% higher than 2017.
Financial Systems' revenue rose to GBP17.3 million from GBP16.9 million, excluding the sale of its Payments software arm, and some 75% of revenue was recurring. Adjusted operating profit was flat at GBP6.5 million.
The Aptitude Software business grew its software revenue by 37% to GBP24.8 million, and overall revenue for the unit increased 17% to GBP52.3 million. Adjusted operating profit was up 21% to GBP10.4 million.
"The group continued its progress in 2018 with an excellent new business performance from the Aptitude Software business supported by a solid performance from the Microgen Financial Systems business," said Microgen.
"A key highlight was the success achieved in 2018 with the recently launched Aptitude Insurance Calculation Engine, with sales in Asia, Europe and North America."
Microgen is confident on the outlook for both of its business ahead of the demerger.
Shares were 2.6% higher on Monday at a price of 453.80 pence each.