StatPro has provided another in-line update which is testament to the consistent strategic progress which it is making. It follows an announcement earlier this month of a new contract which was an early validation of the Group’s strategy to transition to a purely cloud-based provider of analytics services. StatPro has done a good job of retaining stable levels of recurring revenue from its StatPro Seven clients while preparing for the launch of its replacement, StaPro R+. Additional sales and renewals kept the net cancellation rate for StatPro Seven at around 4% during 2014. We are making changes to our FY14E estimates to reflect a slightly lower net cash figure than we estimated at c.£2.7 million and to include the one-off £0.3 million charge flagged in the update.
StatPro Revolution revenue metrics improved again during 2014 with annualised recurring revenue up 68% to £5.4 million at 31 December 2014.
StatPro R+ remains on track for launch in mid-2015.
At the end of FY14, annualised StatPro Revolution related revenue was £11.9 million representing around 46% of total software revenue – a further improvement from the level at the end of Q3.
In early January 2015, StatPro announced a highly significant deal (valued at £3.1 million over three years) in which one of its customers, a large European asset manager, signed a three year contract to upgrade its current StatPro Seven platform to the StatPro Revolution platform.
As previously disclosed, the recurring element of the new contract represents a 55% conversion premium to the original StatPro Seven contract. The benefits of the cloud platform, cost savings, productivity gains and service enhancements all contributed to persuading the client to spend more with StatPro.
We leave estimates unchanged for FY15E but FY14E now reflects £2.7 million of net cash and a one-off charge of around £0.3 million (as a non-exceptional item) relating to an office lease following the decision to re-locate StatPro’s Toronto team to a smaller office.