Vitec Software Group AB: Continued growth and stronger cash flow
Summary for January-March 2018
- Net sales MSEK 222 (192)
- Profit before tax MSEK 25,1 (24,4)
- Operating margin 12,3 % (13,7)
- Earnings per share before dilution SEK 0,66 (0,64)
- Cash flow from operations MSEK 112,9 (98,8)
- The Board of Directors proposes increased dividend to SEK 1.10 per share (1.00)
Significant events after the period
- Vitec acquires PP7 Affärssystem AB och Agrando AS
The operative year 2018 has had a solid start. Our growth is over 15 percent, and this quarter shows, just as the previous one, that our cash flow grows faster than our result. The recurring revenues have grown 14 percent and our license fees continue to diminish. This is in accordance with our strategy and business model; we aim to increase our recurring revenues in favour for non-recurring license revenues. Business area Education & Health differs from the general picture with a negative result for the period. The reason is essentially seasonal variation of Vitec MV, where the first half is significantly weaker than the second half.
Vitec is the leader in the Nordic region in Vertical Software (software that support specific niche business processes). According to Gartner, the most well-known advisory firm in the United States, vertical software is by far the largest segment with more than 25 percent of the total software industry. Most companies are relatively unknown, often less than 50 employees, and rarely placed in the large IT clusters. That is why you rarely hear about these companies. Cost-effectiveness, precision and a well-defined market characterize vertical software companies. The total market for vertical software is thus very large, while the individual markets for each vertical are relatively small.
After the first quarter, we have completed two acquisitions. On April 9, we acquired the Swedish software company PP7 Affärssystem, which develops software for project companies in the construction and installation market in Sweden. On April 19, we acquired the Norwegian software company Agrando whose software addresses the church market in the Nordic region with Norway and Sweden as main markets. With these acquisitions, we continue to strengthen our position as the Nordic region's leading vertical software company, while adding more than 50 MSEK in sales, 8 MSEK in earnings and 50 new employees.
The number of active acquisition dialogues remains high, and we continuously put resources in place to maintain and further develop these dialogues. Vitec's financial position and readiness for future acquisitions is good, which provides for continued acquisition-based growth. With the acquisition of well-established companies and a high proportion of recurring revenues, Vitec continues on the path to act in several independent and specialized niches, to achieve sustainable profitable growth.
Lars Stenlund, CEO
For more information, please contact
Patrik Fransson, Investor Relations
This information is of such a kind that Vitec Software Group AB (publ.) is legally required to disclose pursuant to the EU's Market Abuse Regulation. The information was submitted for publication at 13:00 CET on Monday, April 23, 2018.
Vitec is market leader for Vertical Market Software in the Nordic region. We develop and deliver standard niche software. Vitec grows through acquisitions of well-managed and well-established software companies. The Group's overall processes together with the employees' in-depth knowledge of the customer's local market enables continuous improvement and innovation. Our 600 employees are based in Denmark, Finland, Norway and Sweden. Vitec is listed on Nasdaq Stockholm and had net sales of SEK 855 million in 2017. Find more at www.vitecsoftware.com.