Vitec Software Group AB: Interim Report January - March 2016
STRONGER CASH FLOW DESPITE LOWER MARGIN
UMEÅ, SWEDEN, 2016-02-17 08:30 CET (GLOBE NEWSWIRE) --
SUMMARY FOR JANUARY - MARCH 2016
- Net sales SEK 157 M (143)
- Profit before tax SEK 18,0 M (21,6)
- Operating margin 12,4 % (16,1)
- Earnings per share before dilution SEK 0,48 (0,59)
- Cash flow from operations SEK 84,0 M (73,5)
- New managers in BA Real Estate and Health
CEO'S COMMENTS
In the first quarter, the Group can demonstrate an increase in sales and a strong cash flow compared with the previous year, despite an anticipated reduction in volume of business area Estate Agent in Sweden, an early Easter and a weakening of the Norwegian currency. During the quarter, new business managers were internally recruited and appointed to Real Estate and Health. The outgoing heads remain in the organization on new positions to capitalize on the experience gained in exploration, acquisition and group interaction.
Business area Health continues to have full focus on the development and delivery of its cloud-based systems, which negatively impacted profitability in the short term, but increased the proportion of recurring revenue to 85% (74) of sales. After the decrease in sales for the business area Estate Agent no area is now more than 30 % of total turnover, which gives greater stability and reduced sensitivity to market changes within individual business areas.
Vitec's financial position and preparedness for future acquisitions is good, and with a prospect list of hundreds of companies in the Nordic region, we therefore see good prospects for continued acquisition-based growth.
Vitec's business model with the pursuit of a high proportion of recurring revenues has to some extent continued to grow during the first quarter to 78.3% (77.6). Long term, recurring revenues - normally the character subscription type services - increase further. In the shorter term, particularly in business area Real Estate, there is a limit to further growth through adaptation and training services needed to integrate the area's business.
With a clear shift from traditional license sales to a subscription model (cloud-based systems), the proportion of recurring revenues and the operating margins increase at the same time. This, together with the employees' great capacity to innovate and integrate acquisitions, provides good conditions for long-term development of our business. With the acquisition of well-established companies and a high proportion of recurring revenues Vitec continues on this path, to act in several independent and specialized niches to achieve sustainable profitable growth.
Lars Stenlund, CEO
Disclaimer:
Vitec Software Group AB (publ.) is to make the above information public pursuant to the Swedish Securities Market Act or the Swedish Financial Instruments Trading Act. The information will be made public at 13:00 CET on Wednesday, May 11, 2016.
Vitec Software Group AB (publ) is a Nordic software company that develops and delivers standardised software for industry specific needs. The Group has operations in Sweden, Denmark, Finland and Norway and grows in the mature part of the software industry by consolidating vertical software segments. Our customers include facility management companies, construction and real estate companies, banks and insurance companies, utilities and energy traders, healthcare companies, car spare part dealers and newspaper companies. The Group has 450 employees and had 2015 a turnover of SEK 618 million. Vitec is listed on Nasdaq Stockholm.Vitec Software Group AB (publ).
www.vitecsoftware.com Address: Box 7965, S-907 19 Umeå, Sweden. Phone +46 90 15 49 00
HUG#2011305