PROACTIS confident of its strong growth position
SOFTWARE provider PROACTIS said it is confident it is in a strong position to deliver growth as it reported a rise in profits and record revenue.
In its preliminary results for the year to July 31 2013, the Wetherby-based AIM-listed spend control software provider, announced an increase in revenue by 7% to a record £8m (2012: £7.5m) and a rise in pre-tax profits to £304,000, compared to £94,000 in the same period last year. Adjusted operating profit increased 117% to £0.6m (2012: £0.3m).
PROACTIS sells and maintains specialist software which enables organisations to streamline, control and monitor all internal and external expenditure, other than payroll. In its results, it announced it has secured 35 new deals this year (2012: 28) of which 17 (2012: 10) were subscription deals, which it said result in revenue being recognised in future periods. PROACTIS said the subscription deals being signed are a significant proportion of new business across all channels to market and progress is in line with the strategy that was adopted during 2010.
In 2010, the business changed its model and underwent a transition of the business toward its new multi-year, transactional priced Cloud solutions. Today, the group said the offering is being taken up well.
Rod Jones, CEO, said: “The group now has a run rate of profit equivalent to that being achieved prior to the transition to a blended subscription and perpetual business model, but with all of the benefits of the increased visibility that the long-term subscription business model brings. This clearly validates the group’s stated strategy to build greater visibility and robustness of future revenues.
“Of significant strategic importance for the group is the continued growth of its geographic reach, new business partners, which are already delivering positive results, and the broadening of its offering through innovative applications of its technology.
“The group’s strategy to transition to a blended subscription and perpetual business model is proving successful, and the board is confident that the group is in a strong position to deliver growth and a return to shareholders.”
The group said it remains in a strong financial position with cash balances of £2.3m and is debt free.
It also said the US and Asia Pacific teams continue to make progress and have contributed to new deal count. The most significant win was the Government of Barbados which is now live and using the group’s suite of software over an initial three-year term.
Alan Aubrey, chairman, added: “The group is successfully transitioning to its blended perpetual and subscription licence model offering, which it has achieved so far without requiring any external funding, and its run rate of profit is now equivalent to the pre-blended position.
“During that period, it has also grown its order book from £2m to £6.2m, increased its global geographic presence and established relationships with new business partners to offer PROACTIS’ software as a platform for managed services. The board is confident that the group is in a strong position to continue to exploit the growing Spend and Procurement marketplace.”