Portrait Software plc (LSE AIM: PST), a leading provider of Customer Interaction Optimisation software, is pleased to announce an update on trading for the year ended 31 March 2010.
- Revenue and profits expected to be ahead of market expectations
- Licence revenue increased 86% to £5.6 million (2009: £3.0 million)
- Total revenue increased 10% to £15.9 million (2009: £14.4 million)
- Gross cash balances at the end of the year increased to £3.7 million (2009: £3.4 million)
- Net funds after debt obligations increased significantly to £1.1 million (2009: £0.2 million)
- Strong start to the new financial year, including a significant contract win worth in excess of £3.5 million
Portrait has enjoyed another successful half year of trading, delivering increased revenue, profits and net cash. Licence revenue in the second half continued to show good growth, increasing 29% sequentially, outstripping what was already a very strong first half revenue performance. The continued momentum in sales and marketing execution meant that full year licence revenue increased by over 86% year on year, with the number of licence deals closed more than doubling in a year on year basis. Around two thirds of the number of licence deals closed in the year related to extension and cross-sell deals with existing customers, demonstrating the strength of our client relationships and products, and the effectiveness of our incremental sales approach.
Two of those extension deals were of great significance to us as they provide evidence that our 'online customer offer management' strategy is taking effect. These two new wins at leading financial services institutions (one US and one UK) involve the deployment of our Interaction Optimizer solution in the online customer channel, providing real-time offer management on the web, an area where we see considerable potential.
This sales success contributed to a strong full year revenue performance a little ahead of expectations at approximately £15.9 million, a 10% increase oease on prior year sales of £14.4 million. Professional services revenue grew 3% in the second half, but year on year was down 24% in line with expectations following the completion of some significant enterprise projects in the prior year. Support and maintenance revenue grew 4% in the second half and overall was 2% ahead year on year.
Based on this performance, Portrait increased profits in the second half and expects to report pre-tax profits for the full year which are appreciably ahead of current market expectations. In addition, the stronger than expected market reception to our new Portrait Dialogue product has triggered the mandatory capitalisation under IFRS of certain product development costs for the first time. This will further enhance profits by £0.2 million.
Gross cash balances at the end of the year increased to £3.7 million (2009: £3.4 million) and net funds after debt obligations increased significantly to £1.1 million (2009: £0.2 million).
We are also pleased to report an excellent start to the current financial year with the award of a significant contract for a membership organisation in Australia to deliver a new multi-channel system for intelligent member relationship management. This system, with a contract value to Portrait in excess of £3.5 million in licence, services and first year support fees, is expected to be delivered largely within the current financial year. This exciting new win builds on other recent successes in Australia where we are seeing growing demand for our market leading products.
Luke McKeever, Chief Executive of Portrait Software, commented: "We are delighted to have exceeded the goals we set ourselves and to have delivered on our promises while building an enthusiastic and loyal base of clients and partners to help us continue to grow in the future. As well as securing and delivering important extension and cross-sell deals within our client base, we have acquired some superb new clients, grown revenues and profits, and also increased future recurring revenue. We are continuing to extend our market reach through the signing of new partners in the Marketing Services Provider space, have successfully launched an exciting new product and have earned outstanding recognition in our key markets from industry analysts. Our project delivery continues to surpass client expectations, our pipeline has been expanding rapidly, and we are enjoying significant momentum."
Portrait will be announcing its full year financial results in June 2010.