Aptitude Software Group Plc · LSE:APTD
Aptitude Software — H1 2018 Earnings Presentation
31 slides from Aptitude Software's earnings presentation, Jul 23, 2018
Slide 1: Interim Results
microgen INTERIM RESULTS Six months ended 30 June 2018 23 July 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 • The Group’s recent progress continued in the first half of 2018 with overall revenue growth of 23%, representing organic growth of 11% on a constant currency basis • Aptitude Software has successfully commenced the transition from its focus on the Aptitude Revenue Recognition Engi
Slide 5: Continued Strategic Progress
CONTINUED 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 – H1 2018 Results
FINANCIAL REVIEW – H1 2018 RESULTS Six months ended 30 June 2018 23 July 2018
Slide 7: Interim Results 2018
INTERIM RESULTS 2018 Revenue Adjusted operating profit £34.9m £7.4m 23% 12% (11% organic C/C* growth) (13% C/C growth) (H1 2017: £28.4m) (H1 2017: £6.6m) Adjusted EPS Interim dividend 9.3p 2.2p 15% 10% * C/C = Constant currency growth, calculated by comparing H1 2017 (H1 2017: 8.1p) (H1 2017: 2.
Slide 8: Continued Progress by the Group
CONTINUED PROGRESS BY THE GROUP Aptitude Software revenue 25 £25.4m 30% 20 Continuing revenue (£m) (14% organic C/C growth) (H1 2017: £19.5m) 15 10 Microgen Financial Systems continuing revenue 5 £8.7m 7% 0 Aptitude Software Revenue Microgen Financial Systems Revenue (H1 2017: £8.1m) H1 2017 H2 20
Slide 9: Income Statement
INCOME STATEMENT H1 2018 H1 2017 FY 2017 £’000 £’000 £’000 Aptitude Software Revenue 25,423 19,517 44,721 Microgen Financial Systems Revenue 9,508 8,865 18,300 Total Revenue 34,931 28,382 63,021 Aptitude Software Adjusted Operating Profit 4,847 3,688 8,619 Microgen Financial Systems Adjusted Operati
Slide 10: Balance Sheet
BALANCE SHEET H1 2018 H1 2017 FY 2017 £’000 £’000 £’000 Goodwill, intangible and other long term assets 69,186 53,946 70,206 Property, plant and equipment 5,630 5,290 5,543 Trade and other current assets 21,099 11,486 16,124 Cash and cash equivalents 11,640 15,648 19,137 Total Assets 107,555 86,370
Slide 11: Cash Flow Statement
CASH FLOW STATEMENT H1 2018 H1 2017 FY 2017 £’000 £’000 £’000 Cash (used in)/generated from operations (1,098) 874 14,602 Interest and tax paid (1,473) (1,270) (2,997) Cash flows (used in)/generated from operating activities (2,571) (396) 11,605 Purchase of property, plant and equipment (508) (610)
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Slide 13: Our Portfolio
OUR PORTFOLIO • 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 SaaS Platform and the launch of the Aptitude Lease Accounting En
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 RECOGNITION 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 t
Slide 16: Aptitude RevStream
APTITUDE REVSTREAM Aptitude RevStream offers broader revenue Addresses IFRS 15/ management functionality ASC 606 requirements than the specialised functionality of the Aptitude Revenue Recognition Engine Software‐as‐a‐service Client base weighted towards technology and media / publishing companies A
Slide 17: Aptitude Accounting Hub
APTITUDE ACCOUNTING HUB Enables enterprise finance teams to standardise and Clients within telco, automate their accounting insurance and banking processes while building rich financial data foundations Event‐based accounting Key component of a engine that generates modern finance complex debits and
Slide 18: 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 Centralises lease accounting Standard effective for for both lessor and lessee from multiple inputs for periods from
Slide 19: H1 2018 Financial Highlights
H1 2018 FINANCIAL HIGHLIGHTS Revenue Operating profit High proportion of overseas revenue £25.4m £4.8m 88% (10% organic growth) (31% growth) (H1 2017: £19.5m) (H1 2017: £3.7m) (H1 2017: 86%) Revenue on a constant Operating profit on a Recurring revenue currency basis constant currency basis base £26
Slide 20: H1 2018 Financial Highlights
H1 2018 FINANCIAL HIGHLIGHTS Software 30 revenue 25 £11.8m (25% organic growth) 20 Revenue (£m) (H1 2017: £7.9m) 15 Implementation 10 revenue 5 £13.6m (Consistent organically) 0 H1 2017 H2 2017 H1 2018 (H1 2017: £11.6m) Software revenue Implementation revenue 20 23 July 2018 Unaudited interim result
Slide 21: Summary
SUMMARY • Aptitude Software has successfully commenced the transition from its focus on the Aptitude Revenue Recognition Engine to the growing opportunity with the Aptitude Insurance Calculation Engine • Sales of the strategically important Aptitude Insurance Calculation Engine completed in H1 2018
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Slide 23: 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 • 69% of continuing revenues now from T&FA sector following sale of the small non‐core Payments business in July 2018. Application Management bu
Slide 24: H1 2018 Financial Highlights
H1 2018 FINANCIAL HIGHLIGHTS Continuing revenue Continuing adjusted operating profit £8.7m £3.0m 7% (H1 2017: £8.1m) (H1 2017: £3.3m) T&FA proportion of Recurring revenue continuing revenue growing proportion 69% 75% (H1 2017: 61%) (H1 2017: 77%) 24 23 July 2018 Unaudited interim results
Slide 25: H1 2018 Financial Highlights
H1 2018 FINANCIAL HIGHLIGHTS T&FA revenue growth 10 £6.1m 9 8 Continuing revenue (£m) (10% organic growth) 7 (H1 2017: £5.4m) 6 5 4 App Man resilient 3 £2.7m 2 (H1 2017: £2.8m) 1 0 H1 2017 H2 2017 H1 2018 T&FA Application Management 25 23 July 2018 Unaudited interim results
Slide 26: T&FA Growth
T&FA GROWTH • Revenue increased 13% to £6.1 million (H1 2017: £5.4 million), organic growth of 10% • Investments made during the course of the year throughout the business to provide the potential to accelerate the rate of growth but dampen margin in short term • T&FA now represents 69% of Microgen
Slide 27: Disposal of Payments Business
DISPOSAL OF PAYMENTS BUSINESS • Disposal of small, non‐core Payments business for consideration of £6.9 million completed on 2 July 2018 • Business provided a series of BACS payment products and supporting services to a wide range of businesses • UK national payments architecture in the early stages
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, accelerated by disposal of the small, non‐core Payments business on 2 July 2018 • Combination of organic and inorganic growth continues to enhance our alr
Slide 29: IFRS 15 & IFRS 16 Impact
IFRS 15 & IFRS 16 IMPACT Appendix
Slide 30: Income Statement Restatement, H1 2017
INCOME STATEMENT RESTATEMENT, H1 2017 • IFRS 15, Minimal P&L impact on revenue and operating costs (commission) in H1 2017 • IFRS 16, Immaterial movement of expenditure from operating costs to finance costs H1 2017 IFRS 15 IFRS 16 H1 2017 £’000 £’000 £’000 Restated £’000 Revenue 28,350 32 ‐ 28,382 O
Slide 31: Balance Sheet Restatement Extracts, H1 2017
BALANCE SHEET RESTATEMENT EXTRACTS, H1 2017 • IFRS 15, Establishment of an asset related to sales commissions paid, recognised over expected duration of customer agreement + increased deferral of revenue • IFRS 16, Establishment of a £3.6 million ‘right‐of‐use’ asset in respect of property leases an
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