StatPro’s FY 2017E interim results reflect solid growth and the expected currency tailwind. Reported revenue increased by 23%, adjusted EBITDA was up 35% while adjusted EPS grew by 64%. The interim dividend is maintained at 0.85p. The period saw the acquisition of UBS Delta in April; a front office focused risk and performance analytics service noted for its fixed income risk and attribution capabilities. Integration is progressing to plan. As flagged in the recent trading update, annualised recurring revenue (ARR) had improved further by the end of the half year – boosted by the acquisition of Delta. Over four-fifths of StatPro’s software ARR now comes from its cloud services and CEO Justin Wheatley expects margins to improve as the Group benefits from its greater scale and operational gearing. The outlook statement strikes a positive tone for the second half. With several contract extensions and expansions announced in H1, and a full half year contribution from Delta to come in H2, we leave estimates unchanged.
Group ARR increased by 47% to £53.19 million from £36.17 million or 41% at constant currency rates (CCR) compared to June 2016. The organic increase in ARR was 3%.
StatPro is in the process of integrating Delta into the Group and is at an early stage of engagement with Delta’s existing clients. The enlarged StatPro has a more balanced exposure to geographies and currencies as a result of the acquisition. A material deal, we view the Delta acquisition as a very good strategic and tactical fit which will add significant impetus to the Group.
Both acquisitions made in 2016, Investor Analytics (renamed Alpha) and Infovest, have performed in line with expectations. The former is expected to be fully integrated into the Revolution platform next year. In February 2017, StatPro increased its holding in Infovest to 72.7%. Combined with a stronger Rand versus sterling, Infovest’s performance has warranted a further £0.2 million increase in the provision relating to the non-controlling interests’ put option in Infovest.
StatPro Revolution continued to show good underlying growth in revenues (+27%) with overall growth of 61% including acquisitions. StatPro Seven continues to show resilience with the Composites module in particular benefitting from clients’ compliance requirements. Lower professional service fees reflect the reduced consulting requirements associated with the implementation of Revolution.