Strong first half performance
In line with its July trading update, Sopheon has reported a strong first half performance with revenue, EBITDA and profit before tax well ahead of H1 2017 and representing over half of our respective FY 2018E numbers. Impetus from good growth during 2017 was augmented by new customer wins in the first half of 2018 which were some 50% ahead of those achieved in the comparator period. Sopheon has also continued to expand its “lifetime value” opportunities across a number of blue chip clients through extending the business application areas addressed by Accolade. In a rapidly evolving market, the group has strategic plans to extend Accolade further with specific investment planned in product, people and processes. With good revenue visibility and positive sales experience so far in the second half, the Board has reiterated that Sopheon is trading ‘comfortably in line’ with expectations. These results underpin our full year estimates and we note the strong momentum in the business. With Q4 typically a key contributor of revenue performance, coupled with the potential effect on costs of ambitious hiring plans for the second half of 2018, we leave estimates unchanged for now and look forward to further positive updates as the year progresses.