Sopheon swings to pretax profit as ‘strong year’ boosts revenue

Sopheon PLC on Thursday said it swung to a moderate pretax profit in the first half of 2023, with increased revenue and falls in some costs, although increased taxes prevented a return to full net profitability.

The Surrey, England-based enterprise software provider swung to a £247,000 pretax profit in the first six months of 2023, compared with a $791,000 loss the year before.

Sopheon’s income tax charge increased 83% to $473,000 from $259,000, resulting in an overall post-tax loss. However this was ‘much-reduced’ to $226,000 from £1.1 million. Its basic and diluted losses per share also narrowed to 2.13 cents from 9.94 cents.

Revenue increased 8.5% to $17.0 million from $15.7 million, driven by a ‘strong recurring revenue performance.’

Sales and marketing expenses increased 9.2% to $5.6 million from $5.1 million, and administrative expenses surged by 33% to $3.1 million from $2.3 million, but research and development expenses were reduced by 17% to $3.7 million from $4.5 million.

Adjusted earnings before interest, tax, depreciation and amortisation were broadly flat at $2.9 million.

‘Sopheon continues to deliver on its key growth and transformation objectives...supported by continued high retention performance,’ commented Executive Chair Andy Michuda.

‘In parallel we have delivered substantial investment in growth initiatives and [mergers and acquisitions] that expand our product offering, geographical footprint and market opportunity, while maintaining cashflow discipline and Ebitda performance.’

Going forward, Michuda said: ‘Our strong balance sheet continues to support our ability to execute with confidence. We expect the impact of increased investments in both marketing and product to contribute to a stronger sales pipeline in the second half of the year and beyond, in support of our growth objectives.’

Sopheon shares were down 2.2% at 572.00 pence in London on Thursday.

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