Sopheon swings to profit in first half

Sopheon swung to a profit in the first half of the year as revenue grew and the company said revenue visibility for the year has improved.

For the six months to the end of June, the AIM-listed software and services provider reported a pre-tax profit of $1.6m compared to a $0.5m loss in the first half of last year, as revenue rose to $11.5m from $8.4m.

Earnings before interest, tax, depreciation and amortisation increased to $2.9m from $0.9m and Sopheon said 20 license transactions were closed in the period from new and existing customers compared to 15 in 2015.

This included “a very substantial” order from an existing enterprise tier customer, meaning that although license deal volume increased by a third, license revenues doubled.

Meanwhile, services revenues increased by over 50%, largely through delivering implementations on the back of the substantial deal activity in the final months of 2015, a number of which are with enterprise class customers.

Sopheon said revenue visibility for the full-year 2016 now stands at $18.4m compared to just under $17m at the time of the annual general meeting in June and $15m in the previous year.

Chairman Barry Mence said: “The momentum shift we first noted in our interim report a year ago has delivered a strong performance in 2015, as well as a strong first half for 2016. This shift has been made possible by the strategic and operational changes we initiated two and a half years ago, in reaction to market conditions that we could see were beginning to evolve - as increasingly now evidenced by third party validation from industry analysts.

“We believe that Sopheon is well positioned to capitalise on the opportunities and deliver continued progress."

At 1125 BST, Sopheon shares were up 13% to 263.66p.