Aptitude Software Group Plc · LSE:APTD
Aptitude Software — Microgen — FY2017 Earnings Presentation
30 slides from Aptitude Software's earnings presentation, Mar 7, 2018
Slide 1: 2017 Audited Preliminary Results
microgen 2017 AUDITED PRELIMINARY RESULTS Year ended 31 December 2017 7 March 2018
Slide 2: Group Overview
microgen GROUP OVERVIEW Across its two operating businesses Microgen develops, implements and supports business‐ critical software and related services. Both businesses benefit from high quality revenue streams with excellent forward visibility arising from the recurring revenue licence models favou
Slide 3: Strategic Focus
STRATEGIC FOCUS • Aptitude Software: ‐ Continuation of organic growth by focusing on specialised financial management software applications which have the common capability of very rapidly processing very high volume complex, business event‐driven transactions and calculations ‐ Continue to build on
Slide 4: Group Highlights
GROUP HIGHLIGHTS • Excellent performance by the Group’s two businesses ‐ Revenue growth of 46% ‐ Revenue growth of 37% excluding the benefit of recent acquisitions ‐ Adjusted operating profit increased by 43% • Strong organic growth by Aptitude Software complemented by the acquisition of RevStream •
Slide 5: Excellent Strategic Progress
EXCELLENT STRATEGIC PROGRESS ‐ £15.4 million revenue, on‐going ‐ 1st T&FA acquisition completed, recurring base of £7.5 million Unity in Jersey 2014 ‐ First entry into telco sector with ‐ T&FA revenues of £4.7 million, 33% Aptitude Accounting Hub of total ‐ £16.7 million revenue, on‐going recurring
Slide 6: Financial Review
FINANCIAL REVIEW Year ended December 2017 7 March 2018
Slide 7: 2017 Results
2017 RESULTS Revenue Adjusted operating profit £62.6m £13.6m 46% (43% C/C*) 43% (37% C/C*) (2016: £43.0m) (2016: £9.5m) Adjusted Full year EPS dividend 17.1p 6.25p * C/C = Constant currency growth, 39% 25% calculated by comparing 2016 results with 2017 results retranslated at the (2016: 12.3
Slide 8: Excellent Performance by Both Businesses
EXCELLENT PERFORMANCE BY BOTH BUSINESSES Aptitude Software 50 revenue 45 £44.3m 40 68% (65% C/C) 35 Revenue (£m) 30 (2016: £26.4m) 25 20 Microgen Financial Systems 15 revenue 10 £18.3m 5 10% 0 Aptitude Software Revenue Microgen Financial Systems Revenue (2016: £16.6m) 2015 2016 2017 8 7 March 20
Slide 9: Income Statement
INCOME STATEMENT 2017 2016 £’000 £’000 Aptitude Software Revenue 44,340 26,364 Microgen Financial Systems Revenue 18,300 16,624 Total Revenue 62,640 42,988 Aptitude Software Adjusted Operating Profit 7,946 3,842 Microgen Financial Systems Adjusted Operating Profit 7,502 7,219 Group Costs (1,827) (1,
Slide 10: Balance Sheet
BALANCE SHEET 2017 2016 £’000 £’000 Goodwill and intangible assets 68,925 49,031 Property, plant and equipment 1,825 1,330 Trade and other assets 15,650 9,209 Cash and cash equivalents 19,137 23,849 Total Assets 105,537 83,419 Bank loan (9,818) (10,250) Deferred income (26,328) (20,617) Trade and ot
Slide 11: Cash Flow Statement
CASH FLOW STATEMENT 2017 2016 £’000 £’000 Cash generated from operations 13,551 13,032 Interest and tax paid (2,841) (2,457) Cash flows generated from operating activities 10,710 10,575 Purchase of property, plant and equipment (1,180) (894) Proceeds from sale of fixed assets ‐ 2,352 Acquisition of
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Slide 13: Our Application Suite
OUR APPLICATION SUITE • The Aptitude Software business provides a suite of highly specialised finance management software applications with a traditional focus on banking, insurance and telecommunications • With the recently acquired RevStream technology and the launch of the Aptitude Lease Accounti
Slide 14: Aptitude Insurance Calculation Engine
APTITUDE INSURANCE CALCULATION ENGINE The Aptitude Insurance Calculation Engine, in Addresses IFRS 17 conjunction with the requirements established Aptitude Accounting Hub, offers the data capture and complex Standard effective for accounting capabilities periods from 1 organisations need to comply
Slide 15: Aptitude Revenue Recognition Engine
APTITUDE REVENUE RECOGNTION ENGINE The Aptitude Revenue Recognition Engine offers Addresses IFRS 15/ specialised functionality ASC 606 requirements enabling telcos in particular to comply with IFRS 15/ASC 606 requirements Standard effective for Key differentiation to other products is the ability to
Slide 16: Aptitude Lease Accounting Engine
APTITUDE LEASE ACCOUNTING ENGINE Offers the data capture and complex accounting Addresses IFRS 16/ capabilities organisations ASC 842 requirements need to comply with IFRS 16/ASC 842 Centralise lease accounting Standard effective for for both lessor and lessee from multiple inputs for periods from 1
Slide 17: Acquisition of RevStream Inc.
ACQUISITION OF REVSTREAM INC. • A California‐based provider of cloud‐enabled revenue management enterprise software with a recurring revenue base at acquisition of £2.9 million • Acquisition rationale: ‐ Ability to offer broader revenue management functionality to augment the specialised capabilitie
Slide 18: 2017 Financial Highlights
2017 FINANCIAL HIGHLIGHTS Revenue Adjusted operating profit Increasing proportion of US Dollar revenues £44.3m £7.9m 57% 68% (58% organic) 107% (2016: £26.4m) (2016: £3.8m) (2016: 53%) Revenue on a constant Adjusted operating profit Recurring revenue currency basis on constant currency basis bas
Slide 19: 2017 Financial Highlights
2017 FINANCIAL HIGHLIGHTS Software 50 revenue 45 £17.7m 40 35 43% (35% organic) Revenue (£m) 30 (2016: £12.4m) 25 20 Implementation revenue 15 10 £26.6m 5 91% (78% organic) 0 2015 2016 2017 (2016: £14.0m) Software revenue Implementation revenue 19 7 March 2018 | Audited Preliminary Results
Slide 20: Summary
SUMMARY • Aptitude Software continues to benefit from the increased focus on the deployment of its specialised financial management software applications • The partner model contributing strongly, influencing over 80% of new business contracts in 2017 and key to the adoption and success of new appli
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Slide 22: Overview
OVERVIEW • Building an increasingly strong presence in the Trust & Fund Administration (‘T&FA’) sector with in excess of 350 customers in over 30 countries • Over 60% of revenues now from T&FA sector. Payments and Application Management businesses continue in line with expectations • The Microgen 5S
Slide 23: 2017 Financial Highlights
2017 FINANCIAL HIGHLIGHTS Revenue Adjusted operating profit £18.3m £7.5m 10% 4% (2016: £16.6m) (2016: £7.2m) T&FA proportion of Recurring revenue revenue proportion 62% 76% (2016: 54%) (2016: 80%) 23 7 March 2018 | Audited Preliminary Results
Slide 24: 2017 Financial Highlights
2017 FINANCIAL HIGHLIGHTS T&FA revenue 20 £11.3m 27% 18 (16% organic) 16 (2016: £8.9m) 14 Revenue (£m) 12 Payments revenue 10 £1.45m ↓ 3% 8 (2016: £1.49m) 6 4 App Man revenue 2 £5.6m ↓ 10% 0 2015 2016 2017 (2016: £6.2m) T&FA Payments Application Management 24 7 March 2018 | Audited Preliminary Res
Slide 25: T&FA Growth
T&FA GROWTH • Revenue increased 27% to £11.3 million (2016: £8.9 million), growth of 16% excluding the benefit of recent acquisitions • Investments made during the course of the year throughout the business to provide the potential to accelerate the rate of growth • T&FA now represents 62% of Microg
Slide 26: Acquisition Overview
ACQUISITION OVERVIEW • Five acquisitions completed since December 2014 including Infoscreen (May 2016) and Primacy (February 2017) • Key element of acquisition strategy is the ability to secure both services and licence uplift fees if customers choose to migrate to Microgen 5Series from the acquired
Slide 27: Case Study
CASE STUDY Microgen 5Series will be deployed across a number of Upgrade from legacy Microgen T&FA product MAJOR CARIBBEAN BANK the customer’s Caribbean offices WITH OVER 2,500 STAFF as the key business system for its trust and corporate services MICROGEN 5SERIES business Significant increase in Repl
Slide 28: Summary
SUMMARY • Transition to a business which is focused on the Trust & Fund Administration (‘T&FA’) market through both organic and inorganic growth • Combination of organic and inorganic growth is further enhancing our already strong market positioning in T&FA sector • Investment continuing in the team
Slide 29: Group Outlook
GROUP OUTLOOK Year ended 31 December 2017
Slide 30: Group Outlook
GROUP OUTLOOK • Strong progress in 2017 for both businesses, successfully executing on strategic plans • Continued organic growth strengthened by increasing recurring revenues and scale from strategic add‐on acquisitions • Expanding global footprint and entry into new industry verticals and continue