In an in-line Q3 trading update, Statpro Group (LON:SOG) says that its annualised recurring revenue (ARR) rose by 3% at constant currencies over the past 12 months to £54.8m. Additionally, earlier this week StatPro announced a c £1.0m five-year Infovest contract, which highlights the quality of the group’s Infovest data management solution. The main focus for growth remains the fund administrator channel and, in January, the group will operate a new structure with three divisions (Revolution for analytics, StatPro: Source for data, and Infovest for integration and data management) to drive the business. Following the recent de-rating, we believe the shares look increasing attractive on 15x our maintained FY19 earnings, especially in light of the active M&A backdrop in financial software and the scope for revenue acceleration and margin expansion.
Q3 trading: Underlying ARR grows 3% in 12 months
The group’s ARR rose by 3% to £54.8m over the 12 months to 30 September. This includes c £1.4m from the managed risk service of ODDO that was acquired in July. Importantly, StatPro Revolution’s underlying ARR growth (excluding the impact of acquired revenue and including conversions from StatPro Seven) was 16%. The migration of Delta is progressing well. While the underlying ARR number was broadly in line with the 30 June level, management remains confident that growth will accelerate, largely driven by the reseller (fund administrator/outsourcing) channel, outsourced managed services, the exploitation of under-utilised data assets and value-enhancing acquisitions. Further, profitability will be enhanced from disciplined management of costs. We have maintained all of our forecasts.
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