Final Results

For Release at 07.00 Wednesday, 13 March 2013

STATPRO GROUP PLC

("StatPro", "the Company" or "the Group")

Preliminary Results for the Year ended 31 December 2012

StatPro Group plc, (AIM:SOG), the AIM listed provider of cloud-based portfolio analysis and asset pricing services for the global asset management industry, today announces its unaudited preliminary results for the year ended 31 December 2012.

Highlights:

·; Good progress made in transitioning from traditional software to cloud-based software business

·; StatPro Revolution annualised recurring revenue more than trebled to £1.51 million at 31 December 2012 (2011: £0.45 million**)

·; StatPro Revolution customer number increased to 156 at year end (2011: 50)

·; StatPro Revolution now has 21 fund administrator partners (2011: 10), a key target market for the service, including 6 of the major operators (2011: 1)

·; Successful Placing completed in November 2012 raising £5.81 million (net of expenses)

* Adjusted EBITDA and adjusted earnings per share are EBITDA and earnings per share after adjustment for amortisation of acquired intangibles, share based payments and exceptional items (notes 5 and 7)

** Annualised recurring contract revenue is annual value of revenue contractually committed at year end. Comparative is at constant currency.

Justin Wheatley, Chief Executive, commented: 

"We are delighted with the results for StatPro Revolution which has had significant growth in 2012. As we make the investment to transition StatPro to a pure cloud-based provider the underlying performance of StatPro Seven has been pleasing and we have also seen significant take up of StatPro Revolution with existing clients. We are equally pleased to add many new channel partners including five large global fund administrators. These achievements will underpin our future success and we expect to make significant progress in 2013 and beyond as a result."

- Ends -

For further information, please contact:

A briefing for analysts on the results will be held at 9.30am today at the offices of

Newgate Threadneedle, 5th Floor, 33 King William Street, London, EC4R 9AS

About StatPro

StatPro is a global provider of portfolio analytics for the investment community. Our cloud-based services provide vital analysis of portfolio performance, attribution and risk. Hundreds of investment professionals use our cloud services directly or through a fund administrator/partner to perform sophisticated analysis, reporting and distribution every day.

With nearly 20 years of experience and expertise, we believe analytics should be sophisticated yet simple and useful as well as secure. StatPro data coverage includes global equities, global bonds, global mutual funds, most families of benchmarks, FX rates, sector classifications and much else besides.

StatPro has grown its recurring revenue from less than £1 million in 1999 to around £30 million at end December 2012 and currently enjoys a renewal rate of approximately 93%. StatPro floated on the main market of the London Stock Exchange in May 2000 and transferred its listing to AIM in June 2003. The Group has operations in Europe, North America, South Africa, Asia and Australia and approximately 350 clients in 30 countries around the world. Approximately 80% of recurring revenues are generated outside the UK.

Chief Executive's Review

We are pleased with the excellent progress made in 2012 towards our strategy of becoming a purely cloud-based analytics service provider. The existing business has continued to provide us with a strong, profitable platform from which we can drive StatPro forward, capitalising on cloud computing to enter new regions and market tiers, as well as revitalise our existing customer base.

By the end of the year, StatPro Revolution, our cloud based portfolio analysis service, was being used by over 156 organisations, in 22 countries (2011: 9). We have successfully completed the switchover of development work from StatPro Seven to StatPro Revolution and begun development of StatPro Revolution Plus ("R+"), to be launched over the next three to five years.

The cloud-based nature of StatPro Revolution means it can be shared between colleagues, businesses and customers. We are confident that, with the 21 fund administrators signed up as partners by the year end, we are now on the verge of seeing the start of a 'network effect', with each new customer of the service potentially driving uptake by others. We therefore believe the outlook for StatPro to be positive.

Financial highlights

We are pleased to report that revenue for 2012 increased to £32.00 million (2011: £31.72 million) and adjusted EBITDA increased by 10% to £6.73 million (2011: £6.12 million). Taking into account exceptional costs of £0.98 million (2011: nil) due to the restructuring in January 2012, profit before tax was down 2% at £3.78 million (2011: £3.86 million). Cash flow from operations (before exceptional items) was also strong at £10.18 million (2011: £10.37 million) and, following a successful placing in November 2012, net cash was £3.67 million at the end of December 2012 (2011: net debt £3.40 million). Adjusted earnings per share was up 4% to 5.9p (2011: 5.7p) and the Board has recommended an increase in the dividend of 4% for the year to 2.7p (2011: 2.6p).

Other KPIs that improved in 2012 include the contract renewal rate, increasing to 93% (2011: 92%), and annualised recurring contract revenue, up 4% (on a constant currency basis) to £29.52 million. As the Group is going through a complex transformation of technology platforms this is a pleasing result. In early 2012, we took the decision to focus all active sales efforts on our new cloud-based service StatPro Revolution rather than StatPro Seven. The result has been a marked increase in sales of StatPro Revolution in 2012 with annualised recurring revenues rising over 200% at constant currency to £1.51 million (2011: £0.45 million) and the number of clients of StatPro Revolution increasing to 156 (2011: 50).

Strategic focus

Our strategic focus is to work with partners both for distribution channels and for up-selling additional products. Our secondary focus is to migrate our existing clients of StatPro Seven to StatPro Revolution and StatPro Revolution Plus ("R+") over the next 3 to 5 years. In the short term, progress towards that goal will be manifest by the proportion of our existing clients of StatPro Seven who have also subscribed for StatPro Revolution.

Partnerships

Our strategy is to leverage the clients, relationships and expertise of other companies. StatPro offers its own unique expertise in the form of StatPro Revolution and this is something that many companies desire but would be hard pressed to achieve themselves, due to the complexity of the underlying technology and the access to data. The design of StatPro Revolution also makes this a practical proposition and results in mutual benefits. At the end of 2012, we had 21 companies acting as distributors for StatPro Revolution including 6 major operators.

The key objective for many of our clients is to source as much as possible from one supplier. It is however impossible for any single company to offer everything, since mastering the required expertise in numerous fields becomes too complex. This is where product partners play a crucial role. We have already partnered with a major data provider to offer their data through the StatPro Revolution platform. Now, with a simple click of the mouse, a user can buy coverage of his or her portfolio from over 3.2 million assets. We have also entered into an agreement with Russell Investments to provide their widely popular indexes through StatPro Revolution's online store, uniquely charging on a per portfolio basis. This is a significant step for an index vendor to take, embracing StatPro Revolution's disruptive business model and we are delighted to have secured the partnership. We intend to expand these services further with other data offerings, especially in the area of compliance and to work with a number of software suppliers using our new web application programming interface ("API").

Existing Clients

For StatPro's larger clients, the move to the cloud is an opportunity to improve productivity and the quality of the service they provide to their clients. We are in constant dialogue with our clients to explain our strategy and objectives and this transparency has reaped rewards. We now have a significant number of existing clients using StatPro Revolution and many more testing it. Clients can see that StatPro Revolution is a quantum step up in sophistication and a quantum step down in complexity. We have also shared our plans for R+, which will simplify their operations even more.

StatPro Revolution is a platform for distributing analytics and StatPro Seven is a system to produce performance calculations. This means that StatPro Revolution cannot replace StatPro Seven, but it can certainly enhance it. Only when we have all modules of R+ in full production (expected by the end of 2014), will we be able to replace StatPro Seven fully with a cloud-based version. In the meantime, therefore, we are focused on maximising the uptake of StatPro Revolution by clients of StatPro Seven.

Spreading the service

Sharing is the key functionality that will drive StatPro Revolution sales. The uniquely simple way of allowing a fund manager to share access to a portfolio with other people and organisations, sets StatPro Revolution apart from anything else in the market. As more and more people have a portfolio shared with them, so they will become aware of StatPro Revolution. The depth of analysis available in StatPro Revolution and its speed is also unique in its sophistication and with each release it is getting more sophisticated.

As we gain more users for the service, the core benefits of the product will become more and more apparent to fund managers and thus also to fund administrators. Many fund administrators lack specific knowledge of performance or risk, but their larger competitors have this edge. For them to get all that expertise packaged in such a simple way is a real benefit. In addition, they can generate additional revenues via data services for their clients. For clients of fund administrators the small per portfolio fee is well worthwhile to gain access to StatPro Revolution without having to do any work in respect of data management. Several of our smaller fund administrator partners are making great use of StatPro Revolution to help sell their overall services.

Training and Support

In order to help our many new distributors (largely fund administrators), we are producing a handbook that sets out the key methods of selling and supporting analytics. We will be offering training courses for their sales teams to get familiar with our services and help them win more business. Equally, we will offer training courses for their support teams to familiarise them with common client queries. We will also assist in actual sales processes in order to promote StatPro Revolution as much as possible.

Development

In 2013, we will be focusing on improving the sophistication of the sharing function and also of our compliance products. We will launch a UCITS IV (Undertakings for Collective Investment in Transferable Securities) module shortly which will target the many UCITS funds that exist. The offer greatly simplifies the compliance process as well as significantly reducing the cost. Towards the end of 2013 we plan to release an enhanced cloud-based risk module, which will effectively replace all the current functions available in the risk module of StatPro Seven. Clients that have only the Risk module of StatPro Seven, will be able to upgrade to StatPro Revolution at that point.

R+ will have its beta release in the middle of 2013 and we will initially target clients with significant numbers of small portfolios. R+ is designed to handle massive amounts of data in an efficient manner. With large datasets, the problem is often not the brute force of calculation, rather it is the quality of the user interface to enable efficient interaction with so much data. Our unique graphical interface is specifically designed to allow performance teams to handle vastly more data, far more efficiently than has ever been possible before.

Marketing

We aim to continue to promote StatPro Revolution's strongly differentiated brand to increase awareness and generate interest in StatPro Revolution. The new improved StatPro Store will be launched mid-year and it will have additional modules available for purchase. As the number of clients and products grows, so marketing will become an increasingly important part of our business. The barrier to purchase for an existing client of StatPro Revolution is significantly lower when it comes to an extra module, than it is to win the client initially. Whilst these things take time to put in place, 2013 will be a year when we expect significant strides to be made towards building the underlying foundations for future success.

People

I remain constantly impressed at the expertise and resourcefulness of the people that work at StatPro. In 2012 I have seen even higher levels of motivation and pride in working on such an ambitious solution like StatPro Revolution. I would like to thank each employee for their hard work in 2012 and I look forward to an even more successful 2013.

Dividend

In line with our policy of paying a progressive dividend, which aims to balance return to investors with our investment needs, we are pleased to announce an increase in our full year dividend to 2.7p per share in 2012 (2011: 2.6p).

Outlook

Transforming the business from one technology platform to another is no simple task, but it is one that is largely done from a product and organisational perspective. We believe that over the next two to three years we will see continued growth in our StatPro Revolution sales. In part this will come from our direct efforts, but increasingly it will come from our growing network of partners and also from the viral effect of people sharing portfolio access with each other. As a result we remain confident of a successful outcome for the year.

Justin Wheatley

Chief Executive

Financial Review

Overview

In January 2012, the Board made the decision to develop solely cloud-based technology solutions. The result of this decision means that we now have a very focused business with a strong foundation for highly scalable expansion. The concentration of the sales and client services teams' efforts on StatPro Revolution resulted in a more than three-fold increase in annualised recurring revenue for the cloud-based service to £1.51 million (2011: £0.45 million at constant currency). We are no longer actively promoting our traditional StatPro Seven products to new prospects, nevertheless, we won new business and extensions, and StatPro Seven software revenue increased by 1% at constant currency. The restructuring in 2012 resulted in an exceptional restructuring charge of £0.98 million (2011: nil).

The StatPro Seven and data products achieved an 8% increase in underlying adjusted EBITDA (at constant currency), as shown in the table below, while the StatPro Revolution service, still in investment mode, achieved a reduced EBITDA loss of £2.28 million (2011: £2.54 million). The Group thus achieved a 10% increase overall in adjusted EBITDA to £6.73 million (2011: £6.12 million) and an adjusted EBITDA margin of 21.0% (2011: 19.3%) whilst continuing to invest in cloud technology.

Underlying performance

Share Placing and planned investment

The Company raised £5.81 million (net of expenses) in a Placing in November 2012 and, combined with another year with strong operating cash flow, the Group had net cash of £3.67 million at year end (2011: net debt of £3.40 million). The purpose of raising fresh equity was to allow increased investment in developing and marketing cloud services from a stronger balance sheet. The Board believes that StatPro Revolution has great potential with "first mover" advantage and we plan to capitalise on this opportunity. In 2013 we will invest in the sales team and build on partnerships with fund administrators. StatPro will also increase its development and web design teams as well as strengthening our client services team.

Key performance indicators

The key performance indicators ("KPIs") that are monitored by the Board, and by the Group Executive Board as part of the regular monthly management reporting, are:

*at constant currency

The KPIs are discussed in detail below in the relevant sections of this Financial Review.

Revenue

Overall, Group revenue increased by 1% to £32.00 million (2011: £31.72 million). At constant currency the revenue growth was 4%.

Revenue by segment

Revenue increased in the EMEAA region by 3% at constant currency but at actual rates was 2% lower than the prior year at £20.08 million (2011: £20.40 million). In the North American region revenue increased by 5% (both at constant currency and at actual rates) to £11.92 million (2011: £11.32 million) as shown below.

Revenue by type

As anticipated, our decision to focus on cloud technology and not proactively market StatPro Seven had an impact on StatPro Seven software licence revenue, which grew by only 1% at constant currency and at actual rates fell by 2% to £24.60 million (2011: £25.01 million). StatPro Revolution revenue increased by 324% to £0.72 million (2011: £0.17 million). Data fees increased by 2% for the year as a whole to £4.69 million (2011: £4.61 million) but data fees were lower in H2 2012 as the level of data overage, which was higher than usual in H1 2012, reduced in the second half of the year. Professional services revenue increased slightly by 3% to £1.99 million (2011: £1.93 million).

The split of revenue for the year by type was as follows:

Recurring revenue

The Group's business model of Software as a Service ("SaaS") and recurring revenue contracts continues to provide excellent visibility of revenue with the recurring revenue element being a high percentage (94%) of total revenue (2011: 94%). The annualised recurring revenue from software licences and data fees at the end of December 2012 was £29.52 million (2011: £28.45 million at constant currency). New contracts signed in the year amounted to £3.11 million (2011: £3.47 million) and the renewal rate was higher at 93% (2011: 92%).

Approximately 71% of new recurring contracted revenue came from existing clients (2011: 70%). The proportion by value of recurring software licences and data clients at the end of 2012 committed to the end of 2013 or beyond amounted to 81% (2011: 78%); the weighted average length of contracts committed was 17 months (2011: 17 months).

Whilst recurring revenue relating to StatPro Revolution is currently only 5% of the Group total it is growing at a higher rate than other revenue as the service is developed on a highly scalable technology platform. The total recurring revenue from clients whose subscription includes StatPro Revolution was £4.04 million (2011: £1.62 million) representing 16% (2011: 7%) of our total software recurring revenue, a KPI we are focused on increasing.

The profile of our client numbers and revenues is a skewed distribution. At one extreme are a number of fund administrator partners (typically large custodian banks) who have contracted for, say, a minimum of 100 portfolios and we expect the number of portfolios (and hence recurring revenue) to increase as they promote the service to their wide client base. At the other end are a large number of clients who have signed for just one or a small number of portfolios. Whilst the revenue per client for these smaller clients is much lower than our current average there is a significantly larger number of potential clients and we are focused on growing both these target markets in addition to prospecting existing clients.

The revenue distribution profile for StatPro Revolution is as follows:

Operating expenses (before amortisation of intangible assets and exceptional items) reduced by 4% (1% at constant currency) to £23.02 million (2011: £24.03 million). The average number of employees reduced by 5% to 253 (2011: 266), and we ended the year with 242 employees, 14% fewer than the previous year's staffing level (2011: 280).

Adjusted operating margin

As a result of increased investment in our products and the restructuring in 2012, the operating profit reduced in 2012 to £4.28 million (2011: £4.49 million), although the adjusted operating profit increased by 9% year on year to £5.53 million (2011: £5.06 million) as shown in note 5, with the adjusted operating margin increasing to 17.3% (2011: 15.9%). The adjusted EBITDA (note 5) increased by 10% to £6.73 million (2011: £6.12 million).

Research and development and capex

Following the decision to develop solely cloud-based solutions, we focused the development team on StatPro Revolution and StatPro Revolution Plus (the cloud upgrade path for StatPro Seven). As a result total research and development expenditure reduced overall by 17% to £4.18 million (2011: £5.01 million), equating to 13% of Group revenue (2011: 16%), but our expenditure dedicated to cloud computing increased. The total expenditure on StatPro Revolution including marketing and other costs incurred in 2012 was £3.70 million (2011: £3.32 million), which had an EBITDA impact in the year of approximately £2.28 million (2011: £2.54 million), after taking into account associated revenue and the impact of capitalised development costs.

Development costs of £3.21 million were capitalised in the year (2011: £3.45 million) and amortisation on internal development increased to £3.06 million (2011: £2.64 million). Expenditure on other intangible assets was £0.34 million (2011: £0.36 million) and total capital expenditure on property plant and equipment was £0.64 million (2011: £0.99 million).

Finance income and expense

Net finance expense reduced to £0.49 million (2011: £0.63 million) as a result of lower average net debt in 2012.

Profit before tax

Profit before taxation in 2012 decreased by 2% to £3.78 million (2011: £3.86 million). After adjusting for amortisation of acquired intangible assets, share based payments and exceptional items, the adjusted profit before taxation increased by 14% to £5.04 million (2011: £4.43 million). The impact of currency movements reduced adjusted profit before taxation by £0.37 million (i.e. approximately 7% impact).

Taxation

The tax charge is £1.10 million (2011: £0.96 million) giving an effective tax rate of 29% (2011: 25%). This is higher than the prevailing UK rate largely due to unrelieved losses in our development company StatPro International Sarl.

Earnings per share

Basic earnings per share decreased by 10% to 4.3p (2011: 4.8p). Diluted earnings per share decreased to 4.3p (2011: 4.7p) based on 0.25 million (2011: 1.02 million) potentially dilutive shares outstanding. Adjusted earnings per share (note 7) increased by 4% to 5.9p (2011: 5.7p).

Balance Sheet

The Group's net assets increased to £49.62 million at 31 December 2012 (2011: £43.83 million), mainly as a result of the Placing of shares, which raised £5.81 million (net of expenses).

Cash flow and financing

2012 was another year of positive cash generation with cash inflow from operating activities (before exceptional payments) of £10.18 million (2011: £10.37 million). The directors believe that the financial risk profile has reduced significantly following the extension of the financing facility in May 2012, the Placing in November 2012 and the general improvement in trading over the last year. The Group was in a net cash position amounting to £3.67 million as at 31 December 2012 (2011: net debt of £3.40 million). The Group nevertheless retains its long-term financing facility which was undrawn at 31 December 2012.

Dividends

The directors are recommending an increased final dividend for 2012 of 1.9p per share (2011: 1.85p) making a total dividend for 2012 of 2.7p per share (2011: 2.6p). It is intended to pay the final dividend on 22 May 2013 to all shareholders on the register at the close of business on 26 April 2013. Total dividends paid in 2012 amounted to £1.63 million (2011: £1.50 million). The Board intends to maintain a progressive dividend policy reflecting the balance between the investment needs of the business and the growth in underlying earnings per share. When proposing the dividend, the Board satisfies itself that the current and projected level of dividend cover is appropriate. The dividend cover (calculated as adjusted eps: dividend per share) in 2012 was 2.2 times (2011: 2.2).

Principal risks and uncertainties

The principal business risks and uncertainties affecting the Group are described in the Annual Report. For each category of risk, the directors have identified means by which the risk can be managed or reduced in a cost effective way, whilst accepting that some risks cannot be completely eliminated.

Andrew Fabian

Finance Director

GROUP INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2012

(Unaudited)

GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2012

(Unaudited)

GROUP BALANCE SHEET AS AT 31 DECEMBER 2012

(Unaudited)

GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2012

(Unaudited)

GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED 31 DECEMBER 2012

(Unaudited)

Other reserves include merger reserves of £2,369,000 (2011: £2,369,000) and translation reserve of £8,407,000 (2011: £9,391,000). The merger reserve arose on acquisitions and represents the difference between the fair value of shares issued and the nominal value of the shares. The translation reserve incorporates the gains and losses on revaluation of the net assets and liabilities of subsidiary undertakings and other currency gains and losses that are treated as part of equity.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012

1. Announcement

This announcement was approved by the Board of directors on 12 March 2013. The preliminary results for the year ended 31 December 2012 are unaudited. The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31 December 2012 or 31 December 2011. The financial information set out in the announcement has been prepared on the basis of the accounting policies set out in the statutory accounts of StatPro Group plc for the year ended 31 December 2011. This condensed consolidated financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The auditor's report on the financial statements for the years ended 31 December 2011 was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The financial statements for the year ended 31 December 2011 have been delivered to the Registrar of Companies.

2 Segmental information

The Group's operating segments have been determined based on the information regularly reviewed by the Group Executive Board, which has been identified as the Chief Operating Decision Maker ("CODM"). The Group Executive Board considers the business to be split into two primary geographical markets: EMEAA and North America, which are each managed by a regional CEO. Central costs relate to the expenses related to the Group's headquarters and costs directly associated with the parent Company, which are managed by the Group management team. The external debt is held within Central.

All revenue, profit/(loss) before taxation and total assets are attributable to the principal activity of the Group, being the development, marketing and distribution of software, data solutions and related professional services to the global asset management industry. Segment assets represent those assets arising from the operating activities of those segments. Segment results exclude the impact of any intercompany recharges of revenues or costs.

For the year ended 31 December 2012:

For the year ended 31 December 2011:

3 Operating expenses

4 Exceptional items

The operating exceptional item of £0.98 million relates to severance payments and related costs following a restructuring in the first half of 2012 to re-focus the business on cloud technology. There were no exceptional items in 2011.

5 Adjusted profit before taxation, adjusted operating profit margin and adjusted EBITDA

In order to provide the reader of the accounts with profit measures that more clearly demonstrate the underlying business performance from year to year a number of adjusted profit measures are shown below.

Adjusted profit before taxation

Adjusted operating profit

Adjusted EBITDA

Free cash flow

6 Taxation

The tax impact of the exceptional items is as follows:

The tax on the Group's profit before tax differs from the standard rate of corporation tax in the UK of 24.5% (2011: 26.5%) as follows: