Sopheon sales visibility softens

Sopheon's shares slipped on Thursday despite outperforming in 2018 after the software developer reported that revenue growth was likely to slow in the current year.

2018 saw the enterprise innovation management software and services provider achieve profit before tax of $6.4m, an increase of 25% compared to the year before, as revenue jumped by 19% to £33.9m, with around half of the rise attributed to software related revenues and the other half being service related.

These results fell in line with the upgraded expectations that Sopheon released in January, which had forecast revenues in excess of $33m.

Recurring business rose to $15m at the end of 2018, compared to $12m the year before, after the company signed five new software as a service contracts and saw retention of recurring revenue increase from 95% to 97% by value.

Cash and cash equivalents stood at $17.1m at the end of the year, up from $12.7m the year before.

Chairman Barry Mence said: "With a large diversified blue-chip client base, a comprehensive software platform and deep sector expertise, we have a unique opportunity to advance our category leader status. Strategically, now is the time to accelerate investment and solidify our leadership position."

However, the AIM traded company said revenue visibility for 2019 was at $20.6m, up just 6.7% on the year before.

"Visibility already stands at $20.6m and our sales pipeline includes a number of large opportunities; furthermore, in parallel with organic investments, we will continue to assess corporate paths to accelerate our progress."

He proposed to increase the dividend from 2.5p to 3.25p per share.

Sopheon's shares were down 12.85% at 1,000.00p at 1127 GMT.