Statpro Share Discussion Threads

[geovest] 05/8/2009 15:47

JoA
The most common "sales model" used by most software companies in the past was to book all revenue (sales) and profit in the first year. Statpro stopped doing that in 2002 (long before IFRS was introduced). They now treat software sales the same as software rental, ie only the current year portion is shown as revenue/sales, which means only the current years's proportion of the profit is recognised in the P&L.

The recurring revenue is the aggregate of contracted revenue of future years. This figure is provided as additional information for the investor only and is not taken into account in the profit figures.

The revenue and profit recognition policy of Statpro is one of the most conservative in the industry. If you've held since 2000 you have been through some tough times with this. I've only held since 2003, but I have a high regard for Justin and his team and I beleive Statpro has a very bright future.

[joan of arc] 05/8/2009 15:08

Most companies I have worked with have taken every opportunity to capitalise software development - it flatters the P&L. What is not clear (and I am not sure what the IFRS rules say) is that historically SOG have taken out 3 year contracts for their recurring revenue and then reported all the revenue in the first year, again to flatter the P&L. This means that, rather like a Ponzi effect, you must keep getting more contracts just to stand still profitwise. How we stand on this now I don't know.

However on the face of it these are excellent results, the future looks bright and the share price hike reflects this. I have held these shares since 2000 and trust the management so will continue to hold (even with my niggle re revenue reporting).

[geovest] 05/8/2009 09:40

Its not a case of muddying waters. The nature of the sofrware Statpro develops means that it always fulfills the IFRS requirements. The company would therefore always face an uphill struggle to convince the auditors why they do NOT want to capitalise.
This is actually one of the IFRS regulations that makes sense. Developing software to generate future revenue is no different from buying eqipment to generate revenue. Both should be expensed over its useful life.

[wjccghcc] 05/8/2009 09:14

Geovest, then how come I hold several software companies who don't capitalise development costs? e.g. IGP. IFRS does require them to capitalise development expenditure if the following conditions are met but in practice most companies have the leeway to say not all the conditions are necessarily met and so write it off in the year in which it is incurred.

an internally generated intangible asset arising from the development of software is recognised only if
all of the following conditions are met:
- it is probable that the asset will create future economic benefits;
- the development costs can be measured reliably;
- the technical feasibility of completing the intangible asset can be demonstrated;
- there is the intention to complete the asset and use or sell it;
- there is the ability to use or sell the asset; and
- adequate technical, financial and other resources to complete the development and to use or sell the asset are available.


Apologies on the second point - didn't read that far - it's because development expenditure is less this year after the move to SaaS last year. However, why muddy the waters this way?

[geovest] 05/8/2009 08:59

You are wrong on two counts. IFRS requires/forces ALL software companies to capitalise development cost and then write it off over the usefull life.
You wil also see in the section on development cost in the results that the amount capitalised was £1.02m while the amortisation £1.23m. Results were not flattered by the capitalisation at all.

These results were even better than I expected. Well done to management and staff!

[wjccghcc] 05/8/2009 08:44

Looks good though flattered by capitalising their development costs whereas many software companies expense them in the year they're incurred.

[l0wrdr] 05/8/2009 07:34

any views on todays news?? may be looking to buy in today as it all seems pretty positive here!

[cockneyrebel] 03/8/2009 11:16

Directors buying loads recently - right up to 80p

Already said results will be ahead of views.

Results on Weds.

"The clues are there, as we go through, the keyhole" :-)

CR

[investinggarden] 22/7/2009 10:20

Buy recommendation from Growth Company Investor

[joan of arc] 14/7/2009 21:46

Well it looks like my gripe back in January was misplaced and it was further ridiculed by the recent Director purchase. I await the interims to see if there is still any grounding to some of my concerns re the longer term.

[geovest] 14/7/2009 08:58

Great trading update with positive outlook.

[networker] 20/5/2009 10:39

Perhaps this time the recent director buying will presage an improving share price. Today's AGM announcement is certainly an encouragement after months of frustration. Volume today is still small but almost entirely on the buying tack.

[geovest] 20/1/2009 17:42

JoA, where did you get your figures from. SOG confirmed results in line with expectations, which is £4.73m. Margins on SaaS is normally higher not lower than conventional contracts. Their new asset valuation products should continue to do well and provide growth potential to offset the impact of lower renewal rates because of industry consolidation. The declining £/$ rate will still benefit results next year as well as the £1.5m cost savings.

[edcrane] 20/1/2009 09:41

on reflection and having now done some work on the company, I was coming round to a similar view to you JoA. Seems like it's all dependent on getting contracts to keep things going longer-term. It's on my watchlist for newsflow but that's about it for now

[joan of arc] 20/1/2009 08:49

Well that update went down like a lead balloon. As usual it was what was not said that mattered. At best £4m profit this year and reducing marigns due to the SaaS model. Likewsie as the rolling 3 yr contracts start coming to an end in 2010 this will be further exacerbated with falling renewal rates to boot. A company that has reached its plateau and will plod on with increasing volume but static or falling profits. They should up the divi to at least provide some interest for long term holders like myself. I have been with this 8 years and it is still at less than half my entry price.

[edcrane] 20/1/2009 07:47

nice trading update this morning. Shares look absurdly cheap. No position but going to investigate further

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[networker] 05/8/2008 17:15

After the shock profit warning it would be nice to think that the spate of director buying at c60p puts a floor under the share price. Their judgement seems to have been very poor recently not only about the trading performance of the business but also in their timing of share purchases. They have quite a credibility gap currently which will take time to mend.

[networker] 21/5/2008 08:46

Confident AGM statement. Directors' recent buying shows they are putting their own money on the line. The rise in share price over the last few weeks looks set to continue unless general market conditions neutralise the positive comments. It will be interesting to see if 100p proves to be a barrier in the short term.

[papalpower] 08/5/2008 00:36

Well, it did get very cheap recently..........

[rossgr2] 07/5/2008 13:32

CONTINOUS RISE.................OVER 100P SOON........

[geovest] 17/4/2008 07:23

Third time directors bought since results announcement.

[papalpower] 17/4/2008 07:09

Statpro Group PLC
17 April 2008

17 April 2008

STATPRO GROUP PLC ('StatPro' or the 'Company')

Director's shareholding

StatPro announces that it was notified on 16 April 2008 that, on the same day,
Justin Wheatley, Chief Executive of the Company, purchased on behalf of his
SIPP 20,000 ordinary shares of 1p each in the capital of the Company ('Shares') at 75p per Share. Mr Wheatley's resultant share interest comprises 6,631,772 Shares, representing approximately 12.16% of the Company's issued Shares.

For further information, please contact:

StatPro Group plc
Andrew Fabian, Finance Director 020 8410 9876

Arbuthnot Securities Limited
Tom Griffiths/Alasdair Younie 020 7012 2000

Smithfield
Reg Hoare 020 7360 4900

END

[aioannou] 30/3/2008 15:40

Been following these recently along with FIO and LOG and can the only thing to conclude is general market sentiment is dragging these down. I've just taken reasonably large holdings in all 3 as I consider them good recovery plays over the next 2-3yrs. dyor and good luck

[steverooke] 10/3/2008 16:37

Networker - couldn't agree more! I've followed Statpro for around 7 years and not made much but marvel at a software company that can produce such consistent results with steady growth and recurring revenue model that's better than the software sector I work in (Payments systems), but whose share price is conservative to say the least. FWIW I hold around 2000 shares (at 85p) and cannot understand why they have not been above £1 for the last 6 months at least.