Audited Preliminary Results

RNS Number : 7076R

Aptitude Software Group PLC

10 March 2021

 

10 March 2021

APTITUDE SOFTWARE GROUP plc

('Aptitude Software' or 'the Group')

Audited Preliminary Results for the Year Ended

31 December 2020

Aptitude Software Group plc (LSE: APTD), a specialist provider of powerful financial management software to large global businesses, reports its Audited Preliminary Results for the year ended 31 December 2020.

Financial Highlights

Year ended 31 December	2020	20191	% Change
Annual Recurring Revenue 2 at year end	£31.2m	£28.1m3	11%
-  Software and subscription revenue	£30.5m	£28.5m	7%
- Implementation and solution management services revenue	£26.8m	£31.2m	(14%)
Total Revenue	£57.3m	£59.7m	(4%)
Cash and cash equivalents at year end	£44.8m	£33.0m	36%
Adjusted Operating Profit4	£9.1m	£10.5m	(13%)
Statutory operating profit	£8.1m	£8.9m	(9%)
Adjusted Basic Earnings per Share4	13.2p	12.8p	3%
Basic Earnings per Share	12.5p	11.2p	12%

· The Group has remained agile and resilient to the impact of the pandemic despite the initial disruption to a number of our key markets in the second and third quarter of 2020

· Year on year growth in Annual Recurring Revenue ('ARR') of 11% on a constant currency³ basis driven by new business wins and the expansion of existing customer relationships

· Highlighting both the strength of our client relationships and quality of product suite, net retention⁵ in the year despite the impact of Covid was 102% (2019: 98%)

· Software and subscription revenue, the strategic focus of the Group, now represents 53% of total revenue (2019: 48%) with growth of 7% to £30.5 million for the year ended 31 December 2020 (2019: £28.5 million)

· Strong balance sheet with cash of £44.8 million (2019: £33.0 million), net funds⁶ of £42.9 million (2019: £30.8 million ⁵ ) and no bank loans. This financial strength provides confidence to our clients and prospects whilst positioning the business well for potential acquisition opportunities

Strategic and Operational Highlights:

·       Launch of Aptitude Accounting Hub and Aptitude Insurance Calculation Engine as Software-as-a-Service ('SaaS') offerings, multi-year SaaS agreements signed with two North American insurers

·   Multiple sales of Aptitude Revenue Management to North American technology and telecommunication companies

·       First SaaS agreement for the use of both Aptitude Revenue Management and Aptitude Lease Accounting Engine with a leading global medical technology company. This success further demonstrates the additional capabilities realisable by clients from combining more than one of the Group's tightly integrated and complementary applications

· Expansion of the use of our products in several existing clients including a North American telecommunications company licencing its fourth application and a significant Aptitude Accounting Hub sale to a European bank

· Strengthening of the global partner network with new propositions developed in 2020 providing access to new markets

· Implementation services capacity reduced following market disruption, future growth in demand for services expected to be increasingly fulfilled by the Group's strengthening partner network

· The pandemic is expected to accelerate the stimulus for organisations to undertake greater finance automation in the medium term supporting the Group's investment in the products which address these requirements

Commenting on the results, Jeremy Suddards, Chief Executive Officer, said: -

'The Group continued to make good progress in 2020 despite the challenges arising from the pandemic, with a number of new business wins in our strategic industries and new adjacent ones, complemented by an expansion in the use of our applications in several of our largest existing clients across the globe. With a strong sales performance in the final quarter of the year and a growing pipeline, Aptitude Software looks forward to 2021 with confidence and anticipates a financial outcome at least consistent with 2020.

Aptitude Software benefits from a focused portfolio of product and service offerings, an established SaaS capability, increasing worldwide presence and a strengthening partner network. With Covid expected to accelerate the drive for greater automation in our clients' finance functions, these assets and capabilities position the Group to be able to fully realise the significant opportunity ahead.'

Contacts

Aptitude Software Group plc

Ivan Martin, Chairman  020-3687-3200

Jeremy Suddards, Chief Executive Officer

Philip Wood, Deputy Chief Executive Officer and Chief Financial Officer 

Alma PR

Caroline Forde, Sam Modlin      020-3405-0205

 

About Aptitude Software

Aptitude Software's innovative solutions address the growing trend for finance automation, whether part of a broad finance transformation by a client or to address specific regulatory requirements. Our various products take data from complex systems, typically with multiple siloed data sources across multiple business entities, perform complex accounting calculations and create a unified view of finance. This allows our clients to reap numerous benefits including significant efficiencies, business insights, enhanced control and regulatory compliance.

Our clients include some of the world's largest companies, typically organisations with complex financial data and technology landscapes. Development, together with a growing number of other services, continues to be performed at the Aptitude Innovation Centre in Poland with sales, support and implementation services provided from Aptitude Software's London headquarters and the North American and Singaporean regional businesses.

www.aptitudesoftware.com

Throughout this announcement:

1 Amounts represent continuing operations which exclude the results of the Microgen Financial Systems business disposed of on 28 June 2019 and presented as a discontinued operation

² Annual Recurring Revenue ('ARR') is the value of Aptitude Software's software and subscription recurring revenue at a specific point in time, normalised to a one-year period. ARR includes recurring revenues contracted but yet to commence and excludes recurring revenues which are currently being received but are known to be terminating in the future.

³ Constant currency is calculated by comparing the 2020 results with 2019 results retranslated at the rates of exchange prevailing during 2020. Items within the Financial Highlights table indicated by this superscript reference are calculated on a constant currency basis.

⁴ Adjusted Operating Profit, Adjusted Operating Margin and Adjusted Basic Earnings per Share exclude non-underlying operating items, unless stated to the contrary. Further detail in respect of the non-underlying operating items can be found within Note 2 of the notes to the Financial Statements.

⁵ Net retention is the total value of on-going Annual Recurring Revenue at the year-end from clients in place at the start of the year as a percentage of the opening Annual Recurring Revenue from those clients on a constant currency basis

⁶ Net funds represents cash and cash equivalents less finance obligations, which are currently limited to capital lease obligations

Certain non-IFRS financial measures (e.g. Adjusted Operating Profit) are included which assist management in comparing performance on a consistent basis

Chairman's Statement

Overview

Aptitude Software made strategic and operational progress in a year in which the Group's key markets were disrupted by the onset of the pandemic.

In the initial months of Covid, a number of sales and implementations were slowed as organisations focused on other priorities, however, a more typical business environment returned in the final quarter of the year with several new business contracts completed. Whilst below the pre-pandemic new business expectations for 2020, overall the Group achieved a good number of new business wins and contract expansions in the banking, insurance and technology, media and telecom ('TMT') sectors demonstrating the strength of the Group's product portfolio and sector diversity. These additions led to Annual Recurring Revenue increasing to £31.2 million as at 31 December 2020, representing year on year growth of 11% on a constant currency basis (31 December 2019: £28.1 million, 30 June 2020: £29.3 million, both restated for the prevailing exchange rates at 31 December 2020).

From the onset of the pandemic the Group remained both agile and resilient with all business functions, including those servicing our diverse client base, operating seamlessly. This would not have been possible without the exceptional quality of our people and the Board wishes to thank our employees for their adaptability, commitment and the excellent support and dedication they provided, and continue to provide, to the business and to our clients whilst working remotely.

Benefitting from the previously planned investment, the Group launched the Aptitude Accounting Hub and Aptitude Insurance Calculation Engine as SaaS offerings allowing the business to capitalise on the accelerated move to cloud experienced in the year with all key products now available as SaaS. Following this launch the Group entered into multi-year SaaS agreements with two North American insurers helping drive the strong final quarter's sales performance.

Strengthening the Group's high-quality partner network, a strategic focus, has also been achieved with a number of joint propositions established in the year providing the business with access either to new geographies for specific products or to segments of existing markets not previously accessible.

The Board believes the pandemic will accelerate the stimulus for organisations to undertake finance automation to further transform their finance functions, removing manual processes and improving the quality and regularity of their financial analysis and planning, a capability which is central to our product strategy.

Dividend

Having considered the Group's progress and financial performance in 2020, the Board has proposed to maintain dividend levels. As a result, a final dividend of 3.60 pence per share is proposed (2019: 3.60 pence), making a total ordinary dividend of 5.40 pence per share for the year (2019: 5.40 pence). Subject to shareholder approval at the Group's Annual General Meeting in April 2021, the proposed final dividend will be paid on 28 May 2021 to shareholders on the register at 7 May 2021.

The business has not utilised the furlough scheme nor received any other government support in the United Kingdom nor in any other country where it operates.

Outlook

Aptitude Software continues to benefit from a focused portfolio of product and service offerings, an established SaaS capability, increasing worldwide presence and a strengthening partner network. The Group's robust set of financials complemented by a strong new business performance across the final quarter of 2020 provide the Board with confidence for the year ahead.

Ivan Martin

Chairman

9 March 2021

 

Chief Executive Officer's Report

Introduction

Aptitude Software is a specialist provider of powerful financial management software to large global businesses.

Our applications provide data and business insight to our worldwide client base enabling them to achieve significant benefits such as automation of their finance function, enhanced financial control, deeper operational intelligence and regulatory compliance. Our markets are underpinned by strong fundamentals as technology advancement both drives and facilitates an increasingly automated approach to finance operations, augmented by the continuing impetus of regulatory requirements. Our clients include some of the world's largest companies, typically organisations with complex financial data and technology landscapes. Whilst our products are relevant for all sectors, the Group has established a strong presence in banking, insurance and technology, media and telecom ('TMT') complemented by clients in a series of other advanced industries.

The business generates revenue from its software through a combination of licence fees (primarily annual recurring licences), software maintenance/support, software subscriptions for its cloud-based offerings and implementation and other recurring support services including the growing solution management service. Development, together with an increasing number of other client focused services, continues to be performed at the Aptitude Innovation Centre in Wroclaw, Poland, with sales, support and implementation services provided from Aptitude Software's London headquarters and the North American and Singaporean regional businesses.

Corporate Strategy

Aptitude Software's strategy is focused on providing powerful financial management software to large international businesses. 

The Group executed on a number of strategic activities during 2020, with details of these provided in the sections below. These activities are focused on driving an acceleration of growth in the software and subscription revenues which now represent 53% of overall revenue (2019: 48%). The growth in the proportion of such revenues in the business will, in due course, lead to both an increase in operating margins, given the higher margins achievable from these recurring revenues, and even greater future revenue visibility. 

Software-as-a-Service ('SaaS') Progression

A key strategic highlight in the year has been the launch of Aptitude Accounting Hub ('AAH') and Aptitude Insurance Calculation Engine ('AICE') as SaaS offerings and the subsequent entry into multi-year SaaS agreements with two North American insurers for this new service. The launch expands the Group's existing SaaS capabilities and allows the business to deploy all its key products using this service, capitalising on the accelerated move to the cloud that the industry has experienced in 2020. The availability of these solutions as SaaS, reducing the demands on clients' internal capabilities and reducing implementation times and costs, is also expected to facilitate the greater use of our technology by more organisations smaller in size than the Group's current client profile,  thereby expanding our market opportunity.

Most new clients are expected to deploy the Group's software through our SaaS offering, (though an acceleration in the migration of existing on-premise clients to SaaS is not anticipated in the short term given the investment in clients' infrastructure supporting our technology). This dynamic will lead to further growth in SaaS subscription fees as a proportion of Annual Recurring Revenue which had increased to 23% as at 31 December 2020 (2019: 17%).

Whilst the revenue model for Aptitude Software's SaaS agreements is aligned with the existing licencing of our on-premise software sales, the margins generated by SaaS deployments are lower than on-premise software as a result of incurring third-party technology costs and the provision of a level of embedded technical services within the SaaS offering. Cost efficiencies are expected to be realised in the medium term as the Group progresses with its planned investment in both its cloud infrastructure and the technical evolution of its products.

Partner Network 

A strategic priority for the Group continues to be the growth and development of Aptitude Software's high-quality partner network with a number of joint new propositions developed in the year. These propositions have further strengthened our partner programme which includes deepening relationships with the Big 4 accounting firms and provides the business either with access to new geographies for specific products or with the targeting of segments of existing markets not previously accessible by the Group.

Whilst many prospects are sourced directly by the Group's own sales and marketing teams, the global reach of our partners and the depth of their relationships with large businesses provide Aptitude Software with an increasing number of opportunities, enhanced market coverage and intelligence. In addition to the new business benefits provided by the partner network, the implementation expertise and capabilities of our partners supports the Group's strategic drive to increase the proportion of software and subscription revenues.

Investment has increased in the year in both the partner management team and the education and enablement of our partners to sell, implement and support our products. We expect this enablement to facilitate an uplift in the level of services being performed by partners leading to a richer revenue mix for the business through an increased weighting towards software revenue.

Expanding Client Presence

As the number of both our clients and products increases there is a growing opportunity for add-on sales to existing users. These sales may consist of either increasing the footprint of products already in use by clients or the cross-sell of other Aptitude Software products to an existing user.

Investments in strategic account management teams in each of our regions has resulted in a number of successes in 2020 including the entry into a SaaS subscription agreement with an existing client (a leading North American telecommunications company) for the use of Aptitude Lease Accounting Engine ('ALAE'). ALAE is the fourth of Aptitude Software's products licenced by the client and further demonstrates the additional capabilities realisable by using more than one of Aptitude Software's tightly integrated and complementary applications. A further success was the licencing in the first half of 2020 of Aptitude Accounting Hub ('AAH') to an existing leading European banking client as a key component of their finance transformation to support the increased reporting requirements of up to 18 countries. Sales to existing clients represented approximately one third of new contract additions to ARR in 2020.

Product Evolution

The Group continues to evolve its product set to address the requirements of finance functions that are increasingly being challenged by the demands of operating in a digital world with growing regulatory and cost pressures. These demands result in an increase in the complexity, volume and number of sources of finance data, and the increasing requirement for decision making to move at the pace of the business in real time. 

Our products are moving towards a deeper focus on user experience as clients increase their expectations of the operational intelligence and insights required to support more forward-looking scenario planning. Investment is being increased to ensure the Group retains its advantages over its competition, both in the technology architecture and functionality of existing products as well as the development of new capability to meet the evolving market requirements.

Acquisitions

Aptitude Software's corporate strategy is focused on organic growth, however, the Group's strong financial position, together with its experience of successfully identifying and integrating acquisitions, provides the Board with the opportunity to accelerate growth. Any acquisition will be expected to focus on the acceleration of the product strategy and / or entry into new markets for Aptitude Software.

Aptitude Innovation Centre

Investment continues in the team at the Aptitude Innovation Centre, our long-established integrated centre of excellence in Poland which continues to be a material differentiator for the Group. The Aptitude Innovation Centre encompasses the development of the Group's entire product suite and is also increasingly becoming a focal point for the Group's cloud operations and support activities. This single integrated centre improves the collaboration between our teams as they provide software or associated services to our clients.

Headcount at the Aptitude Innovation Centre increased by 18% in the year to 162. In addition to recruitment for activities such as cloud operations and support, growth continued in both new and existing product development teams as investment in the evolution of our technology increased.

Our People

The exceptional quality and adaptability of our people has ensured all business functions have continued successfully despite the impact of the pandemic. The team is very talented, committed and works incredibly hard. The Board wishes to thank its employees in these difficult times both for their outstanding commitment and the excellent support they are providing to the business and to our clients and partners whilst working remotely.

During the year a number of investments in our team were initiated. Aptitude Software's training and enablement function has been strengthened whilst a number of initiatives focused on individuals' career development across the business are progressing well. The Group will continue to develop its internal talent as well as recruiting the best external skills to help us capitalise on the market opportunity

Our Products

Aptitude Accounting Hub

The Group continues to leverage the capabilities of the Aptitude Accounting Hub ('AAH'), securing new agreements with a number of organisations as they seek to automate and transform their finance functions. These successes included subscription agreements with leading North American insurers

Supplementing this new business growth was the entry into a strategic contract to licence AAH to the retail arm of an existing major European banking client. Our technology will be a core component of a five-year finance transformation programme automating the bank's finance & reporting processes, demonstrating once again Aptitude Software's capabilities in finance automation over and above smart compliance. The contract provides for increased future growth in Annual Recurring Revenue as AAH is deployed to countries beyond the initial deployment scope.

The opportunity for AAH remains significant across all our key industries and is central to Aptitude Software's approach in addressing organisations' need to drive finance automation to continue the transformation of their finance functions . This is supported by recent publications from industry analysts who have recognised the increasing importance of an accounting hub in modern finance architecture. The application centralises and automates finance, accounting and reporting processes, creating a deep level of operational intelligence for our clients. It also delivers a consolidated, yet highly granular, single view of financial data which enhances business insights to assist decision making. AAH can be used on a standalone basis or in conjunction with other Aptitude Software applications. Clients can, and do, choose to implement AAH either before, at the same time, or after the implementation of a specialised accounting calculation engine such as Aptitude Revenue Management.

Aptitude Revenue Management

The Group's two revenue management applications, Aptitude Revenue Recognition Engine and Aptitude RevStream, collectively Aptitude Revenue Management ('ARM'), have continued to make good progress in the year. Included within the new business contracts signed in the year were material subscription agreements for Aptitude RevStream with a large North American technology business and a leading medical technology company who subscribed for the use of the Aptitude RevStream application concurrently with the Aptitude Lease Accounting Engine, the first combined SaaS agreement of its kind . A significant sale of the telco-focused Aptitude Revenue Recognition Engine into North America was also achieved.

The two applications within ARM enable finance teams to automate and simplify the whole revenue lifecycle, from contract order to revenue recognition, reporting and forecasting. The applications go significantly beyond core IFRS 15 / ASC 606 compliance to allow total control over complex revenue management for all contract types ranging from subscription-based revenue models to complex multi-part or bundled contracts. This capability allows businesses to understand and control centrally the financial impact of all their commercial propositions, the quality of their revenue types as well as providing new and valuable insights to support future business decision making such as the introduction of new products in different markets.

Aptitude Insurance Calculation Engine

Further progress with the Aptitude Insurance Calculation Engine ('AICE') has been achieved in 2020 following the previously outlined delay to the introduction of IFRS 17 (which will now become effective for accounting periods commencing 1 January 2023). In addition to the SaaS agreements signed with North American insurers in the final quarter of 2020, a further significant sale was made to a European insurer in the opening months of 2021.

AICE is a strategic, transformational investment providing value to an insurer beyond compliance. It enables data insights and decision support delivering long-term business benefits. Demonstrating the capabilities of AICE, during the year Aptitude Software was recognised as a category leader in "IFRS 17 Technology Solutions: Market and Vendor Landscape 2020", a Chartis Research report that assesses leading vendors of IFRS 17 and Long Duration Targeted Improvement ('LDTI') solutions.

The compliance-focused elements of the application mean that opportunities remain for this application as the effective date of IFRS 17 adoption moves closer, not only in the large insurer market where successes to date have been achieved but also across small and mid-sized participants who have yet to finalise their plans.

AptConnect 2020

After a successful inaugural AptConnect in 2019, the business hosted the second annual event in November 2020. The event was hosted via a market-leading virtual event platform, which enabled the business to welcome guests from 4 continents and some 14 countries, bringing together over 500 people representing our clients, partners and prospects. The conference covered a range of topics from the digitisation of the finance department to the launch of Aptitude Accounting Hub and Aptitude Insurance Calculation Engine as SaaS. The agenda included speakers from our existing client base detailing their own successful implementation journeys of the Aptitude Software product suite along with talks from our partners covering the post-pandemic need to automate finance.

Our Services

Implementation Services

Aptitude Software provides implementation services to its clients, with the scale of such services depending on the nature of the application, the size of the opportunity and the balance of responsibilities between Aptitude Software and its partners. Following on from the investment made in 2020, the business continues to invest in the expansion and enablement of its partner network to facilitate their ability to implement Aptitude Software's product suite reliably and efficiently. Whilst this enablement will lead to a greater proportion of services being provided by partners, it remains important to maintain a high quality delivery capability to ensure that the Group can continue to provide its expertise to both support partners and to those clients who wish to receive our services directly.

Whilst utilisation has been resilient, Covid disrupted a number of sales opportunities during the middle quarters of 2020. Due to the Group's long implementation cycles, services revenue will be most impacted by this disruption in 2021 and this has in turn resulted in a reduction in the Group's implementation services capacity. The investment in our partner strategy means that we expect future growth in demand for services to be increasingly fulfilled by the Group's strengthening partner network. This in turn will allow the Group to drive future margin progression and revenue visibility by improving the percentage of revenues from software and subscription fees.

Solution Management Services

Whilst the majority of overall services revenue is associated with the implementation of Aptitude Software's applications, there is a growing percentage of revenues derived from Solution Management Services ('SMS'), with multiple Aptitude Accounting Hub, Aptitude Insurance Calculation Engine and Aptitude Revenue Management clients contracting for this service across the Group's key sectors and geographies in 2020.

This service extends the responsibilities of Aptitude Software beyond traditional software maintenance services to include those that have typically been performed by the clients' own IT teams. These include the monitoring of system performance, user administration, release management and functional enhancements. In turn, clients benefit from the reduced requirement to establish internal technical teams focused on our applications, providing them with efficiencies and allowing them to focus on their core business activities. We expect the service (which continues to be a focus of investment in the business) to enhance the operation and longevity of applications within major clients, while the long term and recurring nature of the associated income is expected to provide greater certainty and visibility to the Group's services revenues.

Global Presence

Aptitude Software's opportunity is worldwide with an established presence in APAC, Europe and its largest market, North America, which represents 59% of Annual Recurring Revenue ('ARR'). This global reach is supported by the Group's principal offices in London, Poland, Boston and Singapore.

Whilst activities in APAC, non-EU European states and North America are unlikely to be impacted by the United Kingdom's withdrawal from the European Union, Aptitude Software performs its development at the Aptitude Innovation Centre in Poland and has a number of on-going implementation projects within European Union states (2020 revenue from European Union states excluding the United Kingdom was £8.6 million). Whilst travel requirements have been limited during 2020 due to Covid, prior to this, certain employees travelled frequently between these countries.

New country by country guidance took effect from 1 January 2021 and it is our expectation that our travel requirements remain viable but will necessitate some additional planning and administration. The business has considerable experience in obtaining work permits to deploy its highly skilled consultants across the world, and benefits from the flexibility provided by its partner network. The remote working arrangements put in place as part of the pandemic continuity plan will also be of benefit, providing an alternative to physical travel where appropriate. The business is continuing to clarify the situation; however, the Group is well-placed to identify and react quickly to further changes in the operating conditions. The Group also has the option of expanding the consulting capability of the Aptitude Innovation Centre, which is located within the European Union.

Outlook

Benefitting from a strong new business performance in the final quarter of 2020 and a good pipeline, Aptitude Software looks forward to 2021 with confidence and anticipates a financial outcome at least consistent with 2020.  

Jeremy Suddards

Chief Executive Officer 

9 March 2021

Group Financial Performance and Chief Financial Officer's Report

Revenue

Software and Subscription Revenues

Aptitude Software's Annual Recurring Revenue ('ARR') at 31 December 2020 totalled £31.2 million (31 December 2019: £28.1 million, 30 June 2020: £29.3 million, both restated for the prevailing exchange rates at 31 December 2020), representing year on year growth of 11% on a constant currency basis.

ARR is the key financial metric for the Group. Included within ARR are Aptitude Software's annual licence fees and maintenance for its on-premise clients and subscription fees for the Group's SaaS clients. The proportion of clients deploying software using SaaS has continued to grow with SaaS subscription fees accounting for 23% of the total ARR at 31 December 2020 (2019: 17%).

Highlighting both the strength of our client relationships and the quality of our product suite, net retention in the year despite the impact of the pandemic was 102% (2019: 98%) (measured by the total value of on-going ARR at the year-end from clients in place at the start of the year as a percentage of the opening ARR from those clients on a constant currency basis).

Software and subscription revenues recognised in 2020 increased by 7% to £30.5 million (2019: £28.5 million). These now represent 53% of overall revenue (2019: 48%). It is a key part of the Group's strategy to increase this percentage whilst maximising the growth rate of Aptitude Software's ARR, a strategy which in due course will lead to growth in operating margin given the margin differential between software and services revenues.  

Implementation and Solution Management Services

Services revenue totalled £26.8 million for the year ended 31 December 2020 (2019: £31.2 million) of which 89% is attributable to the implementation of our software with the balance of 11% generated from solution management services which, whilst not included in the Group's Annual Recurring Revenue, are recurring in nature. Implementation services revenue reduced in the year due to the disruption to our key markets related to the pandemic. Due to the Group's long implementation cycles, some further reduction is anticipated in 2021.

Research and Development Expenditure

Total expenditure on product management, research and development in the year ended 31 December 2020 was £8.5 million (2019: £9.3 million). Despite an 18% overall headcount increase at the Aptitude Innovation Centre in 2020, the above costs were lower than 2019 due to the material savings from relocating development activities for the Aptitude RevStream product from California to Poland as well as a reduction in travel costs as a result of Covid. Investment will continue as previously planned in 2021 with costs expected to increase by approximately 20%.

The Board has continued to determine that none of the internal research and development costs incurred during the first half of the year meet the criteria for capitalisation. Consequently, these have been expensed as incurred through the income statement.

Operating Profit and Margins

Adjusted Operating Profit and operating profit on a statutory basis for the year ended 31 December 2020 were in line with management expectations at £9.1 million and £8.1 million respectively (2019: £10.5 million and £8.9 million). Adjusted Operating Margin for the period remained resilient at 16% (2019: 18%) despite the Group continuing to prioritise essential investment across a number of functions.

Foreign Exchange

With 52% (2019: 53%) of the Group's revenues being generated from North American clients, the majority of which are invoiced in US Dollars, the business is impacted by changes in the US dollar exchange rate. Aptitude Software's 2019 revenue and Adjusted Operating Profit would have been reported at £59.1 million and £10.3 million respectively on a constant currency basis (compared to actual result of £59.7 million and £10.5 million). Constant currency is calculated by comparing the 2020 results with 2019 results retranslated at the rates of exchange prevailing during 2020.

Whilst the Group's exposure to volatility in the US Dollar exchange rate in the short term is limited, in the medium term the impact becomes more material, notwithstanding the Group's significant US cost base, as the proportion of both fixed US Dollar software revenue (translated at the point of invoicing) and hedged US Dollar service revenues reduce.  From 30 June 2020 to 9 March 2021, the US Dollar has weakened by 13% against the pound reducing the value of Aptitude Software's ARR reported at 30 June 2020 by £1.8 million.

Due to the benefits of the Group's US cost base, the policy of translating software revenue at the point of invoice and hedging services revenue, the profit impact for 2020 was minimal with 2021 only partially impacted.

Non-Underlying Items

Non-underlying items of £1.0 million (2019: £1.6 million) principally comprise intangible amortisation (£0.8 million), with the remaining amount in relation to the final separation costs incurred as part of the disposal of the Microgen Financial Systems business in 2019.

Taxation

The total tax charge after adjusting for the impact of non-underlying items of £1.6 million (2019: £3.3 million) represents 18.1% of the Group's profit before tax (2019: 24.2%), with the reduction against the United Kingdom corporate tax rate of 19% and 2019 levels due to the Group's ability to receive additional tax relief on its research and development expenditure. This additional relief is expected to continue into future years.

Statutory Results

The Group reported a profit for the period attributable to equity shareholders of £7.0 million (2019: £29.2 million). The profit in 2019 includes £22.4 million from discontinued operations in respect of the Microgen Financial Systems business disposed of on the 28 June 2019.

Earnings per Share

As a result of the return of capital in September 2019 and accompanying share consolidation, Adjusted Basic Earnings per Share and Basic Earnings per Share from continuing operations increased to 13.2 pence and 12.5 pence (2019: 12.8 pence and 11.2 pence), growth of 3% and 12% respectively.

Dividend

A final ordinary dividend of 3.60 pence per share is proposed (2019: 3.60 pence), making a total ordinary dividend of 5.40 pence per share for the year (2019: 5.40 pence). The business has not utilised the furlough scheme nor received any other government support in the United Kingdom nor in any other country where it operates.

Balance Sheet

The Group continues to have a strong balance sheet with net assets at 31 December 2020 of £50.6 million (2019: £46.4 million), including cash of £44.8 million (2019: £33.0 million), net funds of £42.9 million (2019: £30.8 million) and no bank loan. Trade receivables (net) have reduced to £5.9 million (2019: £7.2 million), a reduction of £1.3 million due to both strong year end cash collection and the reduction in services invoicing in 2020. The growth in the Group's recurring revenues resulted in deferred income increasing to £25.7 million at 31 December 2020 (2019: £22.8 million). The Group's cash collection disciplines remain strong with DSO (debtor days) at 31 December 2020 of 40 (2019: 60).

Cash Generation

Cash generated from continuing operations improved to £16.2 million (2019: £18.4 million, of which £15.3 million was in relation to the continuing business), with the Group's overall cash balance increasing by £11.9 million in the year. Whilst this increase is principally due to the Group continuing to benefit from a growing recurring revenue base with customers typically paying annually in advance, the cash position has also improved through a reduction in tax payments and improved working capital pursuant to the lower services revenue in the year.  

Philip Wood

Deputy Chief Executive Officer and Chief Financial Officer

9 March 2021

Group Income Statement

for the year ended 31 December 2020

		Year Ended 31 Dec 2020			Year Ended 31 Dec 2019
	Notes	Before non-underlying items	Non-underlying items	Total	Before non-underlying items	Non-underlying items	Total
Continuing operations		£000	£000	£000	£000	£000	£000
Revenue	1	57,266	-	57,266	59,652	-	59,652
Operating costs	2	(48,155)	(964)	(49,119)	(49,150)	(1,559)	(50,709)
Operating profit		9,111	(964)	8,147	10,502	(1,559)	8,943
Finance income		61	-	61	158	-	158
Finance costs		(100)	-	(100)	(326)	-	(326)
Net finance costs		(39)	-	(39)	(168)	-	(168)
Profit before income tax		9,072	(964)	8,108	10,334	(1,559)	8,775
Income tax expense	3	(1,585)	514	(1,071)	(2,403)	370	(2,033)
Profit from continuing operations		7,487	(450)	7,037	7,931	(1,189)	6,742
Profit from discontinued operations	15	-	-	-	2,549	19,881	22,430
Profit for the year		7,487	(450)	7,037	10,480	18,692	29,172
Earnings per share from continuing operations
Basic	4			12.5p			11.2p
Diluted	4			12.3p			11.0p
Earnings per share
Basic	4			12.5p			48.4p
Diluted	4			12.3p			47.7p

group statement of comprehensive income

For the year ended 31 December 2020

	Year ended 31 Dec 2020	Year ended 31 Dec 2019
	£000	£000
Profit for the year	7,037	29,172
Other comprehensive income/(expense)
Items that will or may be reclassified to profit or loss:
Fair value gain/(loss) on hedged instruments	45	(186)
Currency translation difference	(988)	(415)
Other comprehensive income from discontinued operations	-	22
Other comprehensive expense for the year, net of tax	(943)	(579)
Total comprehensive income for the year	6,094	28,593
Total comprehensive income for the year arising from:
Continuing operations	6,094	6,141
Discontinued operations	-	22,452
	6,094	28,593

Group Balance Sheet

For the year ended 31 December 2020

		As at 31 Dec 2020	As at 31 Dec 2019
	Notes	£000	£000
ASSETS
Non-current assets
Property, plant and equipment including right-of-use assets	6	2,394	3,207
Goodwill	7	23,787	23,787
Intangible assets	8	5,640	6,486
Other long-term assets		1,472	1,746
Income tax assets		642	944
Deferred tax assets		448	1,198
		34,383	37,368
Current assets
Trade and other receivables	9	7,782	9,659
Financial assets - derivative financial instruments		62	4
Current income tax assets		1,161	1,155
Cash and cash equivalents		44,822	32,965
		53,827	43,783
Total assets		88,210	81,151
LIABILITIES
Current liabilities
Financial liabilities
- derivative financial instruments		(133)	(120)
Trade and other payables	10	(33,652)	(30,122)
Capital lease obligations	11	(881)	(835)
Current income tax liabilities		(247)	(485)
Provisions	12	-	(38)
		(34,913)	(31,600)
Net current assets		18,914	12,183
Non-current liabilities
Capital lease obligations	11	(972)	(1,288)
Provisions	12	(441)	(337)
Deferred tax liabilities		(1,236)	(1,502)
		(2,649)	(3,127)
NET ASSETS		50,648	46,424

 

Group Balance Sheet

For the year ended 31 December 2020

		As at 31 Dec 2020	As at 31 Dec 2019
SHAREHOLDERS' EQUITY	Notes	£000	£000
Share capital	13	4,143	4,128
Share premium account		7,828	7,660
Capital redemption reserve		12,372	12,372
Other reserves		34,124	34,079
Accumulated losses		(6,165)	(11,149)
Foreign currency translation reserve		(1,654)	(666)
TOTAL EQUITY		50,648	46,424

 

Group Statement of changes in shareholders' equity

for the Year Ended 31 December 2020

		Share capital £000	Share premium £000	Accumulated losses  000	Foreign currency translation reserve £000	Capital redemption reserve £000	Other reserves£000	Total Equity £000
At 1 January 2020		4,128	7,660	(11,149)	(666)	12,372	34,079	46,424
Profit for the year		-	-	7,037	-	-	-	7,037
Cash flow hedges - net fair value gains in the year		-	-	-	-	-	45	45
Exchange rate adjustments		-	-	-	(988)	-	-	(988)
Total comprehensive income for the year		-	-	7,037	(988)	-	45	6,094
Shares issued under share option schemes		15	168	-	-	-	-	183
Share options - value of employee service		-	-	337	-	-	-	337
Deferred tax on financial instruments		-	-	9	-	-	-	9
Deferred tax on share options		-	-	(118)	-	-	-	(118)
Corporation tax on share options		-	-	763	-	-	-	763
Dividends to equity holders of the company		-	-	(3,044)	-	-	-	(3,044)
Total Contributions by and distributions to owners of the company recognised directly in equity income		15	168	(2,053)	-	-	-	(1,870)
At 31 December 2020		4,143	7,828	(6,165)	(1,654)	12,372	34,124	50,648

Group Cash Flow Statement

for the Year Ended 31 December 2020

		Year ended 31 Dec 2020	Year ended 31 Dec 2019
	Notes	£000	£000
Cash flows from operating activities
Cash generated from operations	14	16,238	18,420
Interest paid		(100)	(326)
Income tax received/(paid)		281	(2,077)
Net cash flows generated from operating activities		16,419	16,017
Cash flows from investing activities
Purchase of property, plant and equipment, excluding right-of-use assets		(232)	(828)
Disposal of subsidiary, net of cash disposed		-	47,152
Interest received		61	158
Net cash (used in)/generated from investing activities		(171)	46,482
Cash flows from financing activities
Net proceeds from issuance of ordinary share capital		183	1,368
Dividends paid to company's shareholders	5	(3,044)	(3,859)
Repayment of loan		-	(8,000)
Payment of capital lease obligations		(924)	(1,127)
Return of value to shareholders		-	(46,420)
Expenses relating to return of value		-	(600)
Net cash used in financing activities		(3,785)	(58,638)
Net increase in cash and cash equivalents		12,463	3,861
Cash, cash equivalents and bank overdrafts at beginning of year		32,965	29,186
Exchange rate losses on cash and cash equivalents		(606)	(82)
Cash and cash equivalents at end of year		44,822	32,965

Notes to the Audited preliminary results for the year ended 31 December 2020

1.  Segmental analysis

Business segments

The Board has determined the operating segments based on the reports it receives from management to make strategic decisions.

During the prior year Aptitude Software Group plc operated two businesses, Aptitude Software and Microgen Financial Systems, both of which were considered operating segments based on the reports the Group received from management to make strategic decisions. With the disposal of Microgen Financial Systems on 28 June 2019, the only continuing business segment in the year ending 31 December 2020 was Aptitude Software and therefore certain segmental analysis is no longer required to be provided for this period.

The principal activity of the Group throughout 2019 and 2020 was the provision of business-critical software and services.

1(a) Geographical analysis

The Group has two geographical segments for reporting purposes, the United Kingdom and the Rest of the World.

The following table provides an analysis of the Group's sales by origin and by destination.

	Sales revenue by origin		Sales revenue by destination
	Year ended 31 Dec 2020	Year ended 31 Dec 2019	Year ended 31 Dec 2020	Year ended 31 Dec 2019
Continuing operations	£000	£000	£000	£000
United Kingdom	32,096	32,194	9,571	8,419
Rest of World	25,170	27,458	47,695	51,233
	57,266	59,652	57,266	59,652

2.  Non-underlying items

	31 Dec 2020	31 Dec 2019
	£000	£000
Continuing operations
Amortisation of intangibles	846	846
Overseas taxation	-	713
Group reorganisation costs	118	-
	964	1,559

 

3.  Income tax expense

	Year ended 31 Dec 2020	Year ended 31 Dec 2019
Analysis of charge in the year	£000	£000
Current tax:
- tax charge on underlying items	(1,114)	(3,992)
- tax credit on non-underlying items	22	125
- adjustment to tax in respect of prior periods	132	145
- adjustment to tax in respect of prior periods on non-underlying items	255	-
Total current tax	(705)	(3,722)
Deferred tax:
- tax (charge)/credit on underlying items	(274)	722
- tax credit on non-underlying items	237	361
- adjustment to tax in respect of prior periods	(329)	75
Total deferred tax	(366)	1,158
Income tax expense	(1,071)	(2,564)
Income tax expense is attributable to:
Profit from continuing operations	(1,071)	(2,033)
Profit from discontinued operations	-	(531)
	(1,071)	(2,564)

The adjustment to tax in respect of prior periods on non-underlying items totalling £255,000 has been created through the benefit from additional research and development relief. The adjustment to tax in respect of prior periods on underlying items totalling £329,000 relates to the reduction in the assumed benefit from share option deductions.

The total tax charge of £1,071,000 (2019: £2,564,000) represents 13.21% (2019: 8.08%) of the Group profit before tax of £8,108,000 (2019: £31,736,000). The prior year reduction in effective rate is due principally to the impact of the exempt gain on disposal of Microgen Financial Systems Limited, see note 15 for details.

After adjusting for the impact of non-underlying items, change in tax rates, share based payment charge and prior year tax charge, the tax charge for the year of £1,643,000 (2019: £3,270,000) represents 18.11% (2019: 24.17%), which is the tax rate used for calculating the adjusted earnings per share. The reduction in rate against the prior year is due to the research and development tax relief obtained in the year.

At 31 December 2019, the Group had unused tax losses totalling £4,329,000 available for offset against future profits. A deferred tax asset of £742,000 was recognised in respect of these losses as the Group anticipated being able to utilise these in full in the year ending 31 December 2020. In line with expectations, during 2020 these losses were utilised in full. Consequently, no unused tax losses at 31 December 2020 were available for offset.

The difference between the total tax charge and the amount calculated by applying the effective United Kingdom corporation tax rate of 19.00% (2019: 19.00%) to the profit on ordinary activities before tax is as follows:             

	Year ended 31 Dec 2020	Year ended 31 Dec 2019
	£000	£000
Profit from continuing operations before tax	8,108	8,775
Profit from discontinued operations before tax	-	22,961
	8,108	31,736
Tax at the United Kingdom corporation tax rate of 19.00% (2019: 19.00%)	(1,540)	(6,030)
Effects of:
Adjustment to tax in respect of prior periods	58	271
Adjustment in respect of foreign tax rates	(138)	(306)
Expenses not deductible for tax purposes	(27)	(186)
Exempt gain on disposal	-	3,894
Other	(29)	(135)
Research and development tax relief	618	-
Recognition of tax losses	-	25
Change in future tax rates	(13)	(97)
Total taxation	(1,071)	(2,564)

United Kingdom corporation tax is calculated at 19.00% (2019: 19.00%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

 

4.  Earnings per share

To provide an indication of the underlying operating performance per share, the adjusted profit after tax figure shown below excludes non-underlying items and has a tax charge using the effective rate of 18.11% (2019: 24.17%).

	Year ended 31 Dec 2020	Year ended 31 Dec 2019
	£000	£000
Profit on continuing operations before tax and non-underlying items	9,072	10,334
Profit on discontinued operations before tax and non-underlying items	-	3,196
Profit on ordinary activities before tax and non-underlying items	9,072	13,530
Tax charge at a rate of 18.11% (2019: 24.17%)	(1,643)	(3,270)
	7,429	10,260
Prior years' tax charge	58	220
Non-underlying items net of tax	(450)	18,692
Profit on ordinary activities after tax	7,037	29,172

	2020 Number (thousands)	2019 Number (thousands)
Weighted average number of shares	56,339	60,280
Effect of dilutive share options	780	865
	57,119	61,145

	2020 Basic EPS	2020 Diluted EPS	2019 Basic EPS	2019 Diluted EPS
	Pence	pence	pence	pence
Earnings per share	12.5	12.3	48.4	47.7
Non-underlying items net of tax	0.8	0.8	(31.0)	(30.6)
Prior years' tax credit	(0.1)	(0.1)	(0.4)	(0.4)
Adjusted earnings per share	13.2	13.0	17.0	16.7
Basic earnings per share
From continuing operations	12.5	12.3	11.2	11.0
From discontinued operations	-	-	37.2	36.7
	12.5	12.3	48.4	47.7
Adjusted earnings per share
From continuing operations	13.2	13.0	12.8	12.5
From discontinued operations	-	-	4.2	4.2
	13.2	13.0	17.0	16.7

Adjusted earnings per share are calculated using adjusted profit after tax.

5.  Dividends

	2020 pence per share	2019 pence per share	2020 £000	2019 £000
Dividends paid:
Interim dividend	1.80	1.80	1,015	1,144
Final dividend (prior year)	3.60	4.40	2,029	2,715
	5.40	6.20	3,044	3,859
Proposed but not recognised as a liability:
Final dividend (current year)	3.60	3.60	2,031	2,024

The proposed final dividend for the current year was approved by the Board on 9 March 2021 but was not included as a liability as at 31 December 2020, in accordance with IAS 10 'Events after the Balance Sheet date'. If approved by the shareholders at the Annual General Meeting this final dividend will be payable on 28 May 2021 to shareholders on the register at the close of business on 7 May 2021.

6.  Property, plant and equipment including right-of-use assets

	31 Dec 2020	31 Dec 2019
	£000	£000
Opening net book value 1 January	3,207	5,417
Additions	775	925
On disposal of subsidiary (note 15)	-	(1,213)
Net disposals	(41)	(67)
Exchange movements	26	(11)
Depreciation	(1,573)	(1,844)
	2,394	3,207

7.  Goodwill

	31 Dec 2020	31 Dec 2019
	£000	£000
Opening net book value 1 January	23,787	48,793
On disposal of subsidiary (note 15)	-	(25,006)
	23,787	23,787

8.  Intangible assets

	31 Dec 2020	31 Dec 2019
	£000	£000
Opening net book value 1 January	6,486	14,186
On disposal of subsidiary (note 15)	-	(6,308)
Amortisation	(846)	(1,392)
	5,640	6,486

9.  Trade and other receivables

	31 Dec 2020	31 Dec 2019
	£000	£000
Trade receivables	5,881	7,218
Less: provision for impairment of receivables	-	(19)
Trade receivables - net	5,881	7,199
Other receivables	499	1,127
Prepayments	791	795
Accrued income	611	538
	7,782	9,659

Within the trade receivables balance of £ 5,881,000 (2019: £ 7,218,000) there are balances totalling £ 1,453,000 (2019: £ 1,934,000) which, at 31 December 2020, were overdue for payment. Of this balance £ 1,433,000 (2019: £1,313,000) has been collected at 9 March 2021 (2019: 10 March 2020).

10. Trade and other payables

	31 Dec 2020	31 Dec 2019
	£000	£000
Trade payables	600	1,509
Other tax and social security payable	2,020	1,549
Other payables	166	92
Accruals	5,163	4,130
Deferred income	25,703	22,842
	33,652	30,122

11.  Capital lease obligations

The Group leases various offices which, following the adoption of IFRS 16, met the criteria set out to be recognised as capital lease agreements.

	31 Dec 2020	31 Dec 2019
	£000	£000
Amounts payable under capital lease agreements:
Within one year	908	901
Within two to five years	1,084	1,171
After five years	-	229
Total	1,992	2,301
Less: future finance charges	(139)	(178)
Present value of lease obligations	1,853	2,123
Less: Amount due for settlement within 12 months (shown under current liabilities)	(881)	(835)
	972	1,288

	31 Dec 2020	31 Dec 2019
	£000	£000
The present value of financial lease liabilities is split as follows:
Within one year	881	835
Within two to five years	972	1,064
After five years	-	224
	1,853	2,123

12. Provisions for other liabilities and charges

	Provisions
	31 Dec 2020	31 Dec 2019
	£000	£000
At 1 January	375	424
Charged to income statement	69	90
On disposal of subsidiary	-	(132)
Foreign exchange movement	(3)	(7)
At 31 December	441	375

Provisions have been analysed between current and non-current as follows:

	Provisions
	31 Dec 2020	31 Dec 2019
	£000	£000
Current	-	38
Non-current	441	337
	441	375

£ 386,000 (2019: £ 317,000) of the total provision at 31 December 2020 of £ 441,000 relates to the cost of dilapidations in respect of its occupied leasehold premises. All of the non-current provision is expected be utilised within 2 to 5 years (2019: £ 337,000).

13. Share capital

Ordinary shares of 7 1/3p each	Number	£000
Issued and fully paid:
At 1 January 2020	56,217,970	4,128
Issued under share option schemes	210,997	15
At 31 December 2020	56,428,967	4,143

14.  Cash flows from operating activities

Reconciliation of profit before tax to net cash generated from operations:

	Year ended 31 Dec 2020	Year ended 31 Dec 2019
	£000	£000
Profit before tax for the year from
Continuing operations	8,108	8,775
Discontinued operations	-	22,961
Profit before tax including discontinued operations	8,108	31,736
Adjustments for:
Depreciation	1,573	1,844
Amortisation	846	1,392
Overseas taxation provision	-	713
Share-based payment expense	337	1,033
Gain on disposal of subsidiary, excluding direct costs incurred	-	(23,657)
Finance income	(61)	(158)
Finance costs	100	326
Changes in working capital excluding the effects of acquisition:
Decrease in receivables	1,917	1,493
Increase in payables	3,484	3,900
Decrease in provisions	(66)	(202)
Cash generated from operations	16,238	18,420
Cash generated from operations is from:
Continuing operations	16,238	15,295
Discontinued operations	-	3,125
	16,238	18,420

15.  Discontinued operations

15(a) Description

On 30 May 2019, the Group announced that it had entered into an agreement to sell the entire issued share capital of Microgen Financial Systems Limited, to Moscow Bidco Limited, a newly incorporated private limited company controlled by Silverfleet Capital Partners LLP, for consideration of £ 51.4 million. The disposal was approved by Aptitude Software Group plc's shareholders at a General Meeting held on 24 June 2019, with completion of the disposal effective on 28 June 2019 and is reported in the current period as a discontinued operation. Financial information relating to the discontinued operation for the period to the date of disposal is set out below, with the gain on disposal being presented within the profit from discontinued operation (see analysis in 15(b) below).

15(b) Financial information and cash flow information

The financial performance and cash flow information presented are for the period 1 January 2019 to 28 June 2019.

	Period from 1 Jan 2019 to 28 June 2019
	£000
Income statement
Revenue	8,089
Operating costs	(4,866)
Adjusted Operating Profit	3,223
Non-underlying items	(540)
Gain on disposal of subsidiary	-
Operating profit	2,683
Finance income	2
Finance costs	(29)
Profit before income tax	2,656
Income tax expense	(531)
Profit after tax from discontinued operation	2,125
Gain on disposal of subsidiary after tax (see (c))	20,305
Cash generated from operations	22,430
Other comprehensive income
Items that will or may be reclassified to profit or loss
Currency translation gain	22
Total comprehensive income for the year arising from discontinued operations	22,452
Profit from non-underlying items is generated from:
Non-underlying operating costs	(540)
Gain on disposal of subsidiary	20,305
Income tax credit	116
	19,881

	Period from 1 Jan 2019 to 28 June 2019
Cash flow statement	£000
Net cash from operating activities	3,125
Net cash generated from investing activities (includes an inflow of £47,152,000 from the sale)	47,078
Net cash generated from financing activities	554
Net increase in cash generated by the subsidiary	50,757

15(c) Details of the sale of the subsidiary

	Book value
	£000
Net assets disposed
Property, plant and equipment	1,213
Goodwill	25,006
Intangible assets	6,308
Other long-term assets	257
Deferred income tax assets	302
Trade and other receivables	3,267
Cash and cash equivalents	4,259
Trade and other payables	(9,299)
Capital lease obligations	(815)
Current income tax liabilities	(1,298)
Provisions for liabilities and charges	(132)
Deferred tax liabilities	(1,314)
NET ASSETS	27,754
Consideration received
Proceeds received on completion	51,411
Less: direct costs incurred	(3,352)
	48,059
Gain on disposal excluding direct costs incurred	23,657
Gain on disposal	20,305

16.  Post balance sheet events

Since the year end, new country by country guidance took effect in respect of the United Kingdom's withdrawal from the European Union. The withdrawal represents a non-adjusting event for the purposes of these financial statements and, even if it had represented an adjusting event the Directors believe the impact of this would have been immaterial. This is based on the conclusions set out within the Chief Executive Officer's Report.

In addition, the Group continues to be affected by the global restrictions implemented by governments in response to the COVID-19 outbreak detailed within the Chief Executive Officer's Report. This impact remains unchanged since the year end.

17. Statement by the directors

The preliminary results for the year ended 31 December 2020 and the results for the year ended 31 December 2019 are prepared under International Financial Reporting Standards as adopted for use in the EU ("IFRS").  The accounting policies adopted in this preliminary announcement are consistent with the Annual Report for the year ended 31 December 2020.

The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 31 December 2020 or 31 December 2019.  The financial information for the year ended 31 December 2019 is derived from the Annual Report delivered to the Registrar of Companies.  The Annual Report for 2020 will be delivered to the Registrar of Companies in due course. The auditors' report on those accounts was unqualified and neither drew attention to any matters by way of emphasis nor contained a statement under either section 498(2) of Companies Act 2006 (accounting records or returns inadequate or accounts not agreeing with records and returns), or section 498(3) of Companies Act 2006 (failure to obtain necessary information and explanations).

The Board of Aptitude Software Group plc approved the release of this audited preliminary announcement on 10 March 2021.

The Annual Report for the year ended 31 December 2020 will be posted to shareholders in due course and will be delivered to the Registrar of Companies following the Annual General Meeting of the Company.  The report will also be available on the investor relations page of our web site (www.aptitudesoftware.com).  Further copies will be available on request and free of charge from the Company Secretary at Old Change House, 128 Queen Victoria Street, London, EC4V 4BJ.

 

END

 

 

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