TIDMAPTD
RNS Number : 3628A
Aptitude Software Group PLC
22 January 2024
22 January 2024
Aptitude Software Group plc
("Aptitude" or the "Group")
Full Year Trading Update and Notice of Results
Aptitude (LSE:APTD), a market-leading provider of finance
transformation software solutions, specialising in fully autonomous
finance, today provides an update for the financial year ended 31
December 2023 and the current financial year.
Trading Update
Aptitude made good progress in 2023 delivering profits in line
with expectations. In addition to several new business successes
across the Group's product suite, including the number one Japanese
bank, the Group achieved a series of key milestones with Fynapse,
Aptitude's next generation digital finance platform.
Key milestones for Fynapse included:
-- Meeting key market readiness for our Microsoft partnership
with a full integration to D365 and enablement on the
Azure cloud platform
-- Continued positive progress with the Telco charter client
following the successful go-live in July 2023;
-- A growing number of existing AAH clients assessing migration
to Fynapse, supporting our strategy
-- The signature of the Group's first new logo Fynapse
client in December 2023 with a multi-year subscription
agreement; and
-- A strong and growing pipeline of opportunities, both
with new and existing clients, supported by the Group's
partnerships including Microsoft and others.
The Group continued to build on the new business success
achieved in the first half of 2023 securing several new major
clients in the second half of the year. These successes
include:
-- A partner-led multi-year agreement for the Aptitude
Accounting Hub with a US based investment management
company, which will convert to Fynapse in the second
year of the contract;
-- A new multi-year agreement for the Aptitude Accounting
Hub with the number one Japanese bank to support their
European operations;
-- A multi-year agreement for Aptitude RevStream with a
UK based financial software company;
-- A multi-year renewal for a major e-Suite client with
the addition of new divisions of the client, expected
to deliver incremental ARR benefit in 2024; and
-- A material new multi-year agreement with a global existing
Financial Services client to take Aptitude Assure, the
Group's recurring managed services solution.
The Group continued to experience elevated churn in its
Subscription, Billing and Revenue Management products. As a result,
the Group's Annual Recurring Revenue ('ARR') grew by 2% on a
constant currency basis in the year to GBP51.1 million (31 December
2022: GBP50.2 million, 30 June 2023: GBP49.6 million). As
previously reported, churn levels were particularly impacted by the
wider macroeconomic environment. However, on a constant currency
basis, ARR on our Finance Transformation products, AAH and Fynapse,
grew at 12% year on year.
As noted at the time of the Interim Results release, the Board
took action to reduce cost in the first half of 2023 to underpin
profit expectations for the remainder of the year and increase
operational efficiency in future years. Throughout 2023, investment
was protected in areas of strategic focus, including Fynapse and
its go to market capabilities.
The Group's balance sheet remains strong, with cash at 31
December 2023 of GBP34.1 million (31 December 2022: GBP29.2
million) and net funds of GBP22.7 million (31 December 2022:
GBP15.9 million) reflecting the Group's increasing profitability
and strong cash generation.
Alex Curran, CEO, has formed a new Senior Leadership Team with
an associated flattened organisational structure. An action plan
has been put in place and is being executed across all functions to
accelerate revenue growth, reduce churn, strengthen the Group's
partner strategy and improve overall business performance.
Outlook
Fynapse represents an exciting opportunity and the Board looks
ahead positively at the opportunity presented by the platform in
2024 and beyond. Improved performance is underpinned by the Group's
growing pipeline of opportunities, strong partners and a refreshed
leadership focused on improving general business performance,
reducing churn, driving strong growth in ARR and improving margins.
Additionally, the Group begins the year with GBP53.2 million of
revenue under contract.
The Board will monitor the wider macroeconomic situation, its
potential impact on client and new logo investment decisions and
ongoing spend on professional services. The Board intends to
carefully manage investment levels in the business, whilst
protecting strategic investment in Fynapse. Whilst ongoing churn
may have an impact, ARR growth is expected to materially improve in
2024 and profit expectations remain underpinned for the year
ahead.
Long term, the Board sees Fynapse as a material accelerator of
Aptitude's growth. It is encouraged by the first sale of Fynapse to
a net new client at the end of 2023, and is confident in generating
further Fynapse sales, both from new logos and across the existing
base of clients, in 2024.
Notice of Results
The Group expects to issue its results for the year ended 31
December 2023 on Thursday, 21 March 2024.
A presentation for analysts will take place on the day. Analysts
wishing to attend should contact aptitude@almastrategic.com to
register.
Aptitude Software Group plc
Ivan Martin, Chairman 020-3687-3200
Alex Curran, Chief Executive Officer
Mike Johns, Chief Financial Officer
Alma Strategic Communications
Caroline Forde / Hilary Buchanan 020-3405-0205
About Aptitude Software
Aptitude Software provides software solutions that deliver fully
autonomous finance to enable its clients to drive growth,
efficiency and sustainability. Fynapse is Aptitude's intelligent
finance data management and accounting platform designed to
increase productivity and lower costs for finance teams globally.
Fynapse provides a single view of finance and business data,
unparalleled performance and automation, faster and better
insights, user-friendly functionality and market-leading total cost
of ownership.
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