QPR Software Plc Interim report January–March 2024
QPR SOFTWARE
PLC
STOCK EXCHANGE
RELEASE 19
April 2024, AT 9.00 AM EET
QPR Software Plc's interim report for January-March
2024: SaaS- and software net sales increased. The company's
turnaround is progressing according to the strategy, and the first
partnership agreements were signed in North America.
FINANCIAL DEVELOPMENT BRIEFLY
JANUARY-MARCH 2024
- SaaS net sales increased by +15%
- Software net sales increased by +4%
- Net sales was 1,769 thousand euros, down -21% (January-March
2023: 2, 237) due to company’s discontinuation of consulting
outside the core business.
- EBITDA was 295 thousand euros (-36), a difference of 332
thousand euros from the comparison period
- The operating profit was 33 thousand euros (-287), a difference
320 thousand euros from the comparison period
- Profit before taxes was 13 thousand euros (-326), a difference
339 thousand euros from the comparison period
- The result was 13 thousand euros (-331), a difference 344
thousand euros from the comparison period
- Earnings/share was 0.001 euros (-0.027)
- Cash flow from operations EUR -5 thousand (475)
OUTLOOK FOR 2024 (Unchanged)
The company monitors the development of the world's economic
situation and geopolitical tensions. The slowly budding recovery of
economic growth, falling interest rates and normalizing inflation
will improve the financial position of customers, and investment
decisions can be expected to accelerate towards the end of
2024.
Supported by the current contract base and the projected growth
of SaaS (Software as a Service) net sales, QPR expects the growth
of SaaS net sales to be double-digit and estimates that the entire
software net sales will grow in 2024 (2023: 5,122 thousand
euros).
The company expects the operating result to improve
significantly in the financial year 2024. The operating result in
2023 was -813 thousand euros.
CEO REVIEW
The first quarter of the year has started on a positive note
with several significant successes. There's a moderate enhancement
in the market, and we've managed to expand contracts with our
existing customers, grow our international partner network, and
acquire new clients.
The company's turnaround has continued according to plan. Our
SaaS net sales, which is at the core of our strategy, grew by 15%,
and software net sales grew by 4% in the January-March period. The
group's total net sales decreased by 21% due to our decision to
discontinue consulting services outside our core business in
Finland at the end of 2023. The EBITDA was 295 thousand euros
positive, over 300 thousand euros higher than in the same period
last year. The company achieved a positive result (13 thousand
euros), marking the first time since the third quarter of 2019. At
this stage of the turnaround, our results still vary quarter by
quarter and depend on individual deals.
QPR Software's mission is to innovate, develop, and deliver
software for the analysis, monitoring, and modeling of
organizational operations. In September, we announced the company's
new direction and positioning as a leading player in the field of
Digital Twin of an Organization (DTO) technology. We offer
comprehensive DTO solutions across various areas, such as process
mining, modeling, and the management of strategy and digital
transformation. In January, we introduced our latest innovation,
Data Augmented Modeling (DAM), which combines the best features of
process modeling and mining. DAM leverages real-time data from the
company's IT systems, enhancing the credibility and reliability of
the models.
Our process mining software, QPR ProcessAnalyzer, offers a
unique integration with the Snowflake Data Cloud service, setting
it apart from competitors. Several of our large corporate clients
have recognized this value. The software enables modern data
analysis directly within the Snowflake Data Cloud, enhancing return
on investment, performance, scalability, and security.
Compatibility with Snowflake Data Cloud was a key criterion when we
entered into a contract in February for our process mining SaaS
solution with a globally operating retail company, which previously
used competing products. Currently, we are engaged in similar
discussions with several of our clients.
Our situation is also developing positively in the Middle
Eastern markets. QPR is known as a reliable player with a strong
partner network. The demand for our products has been brisk
throughout the beginning of the year, and our key achievement in
the first quarter was the deal with the Saudi Arabian Tourism
Development Fund (TDF). We are supplying TDF with QPR Metrics, our
strategy and performance management software.
Our adjusted strategy focuses on strengthening our global
partner network. A significant step in this direction has been
establishing partnerships in the United States market. Our QPR
ProcessAnalyzer Powered by Snowflake software has played a
significant role in achieving this goal as a majority of
Snowflake's customers are based in the United States. During the
first quarter, we entered into partnership agreements with Solution
BI, Accelance, and Transigma Consulting, granting them reseller
rights to QPR's process mining software in the United States.
Solution BI also has rights for the Canadian and Mexican
markets.
In addition, QPR has received a positive decision from Business
Finland regarding Market Explorer funding. This enables the company
to explore business opportunities in North America markets.
Although our operating environment remains challenging, we are
optimistic about the upcoming quarter. Our company has a strong
foundation that offers growth opportunities to leverage the
expanding market, while our technological potential, innovations,
and strategic partnerships enable us to serve new customers in
achieving our business objectives.
I want to thank our customers, partners, investors, and
shareholders for their trust in QPR during the first quarter of the
year. I also want to express my gratitude to all of our employees
for their dedication and hard work towards the future and success
of the company.
Heikki Veijola
Chief Executive Officer
KEY FIGURES
EUR in thousands,
unless otherwise indicated |
Jan-Mar, 2024 |
Jan-Mar, 2023 |
Change,
% |
Jan-Dec,
2023 |
|
|
|
|
|
Net sales |
1.769 |
2.237 |
-21 |
7,550 |
EBITDA |
295 |
-36 |
1.036 |
182 |
% of net
sales |
16.7 |
-1.6 |
|
2.4 |
Operating
result |
32 |
-287 |
114 |
-813 |
% of net
sales |
1.8 |
-12.8 |
|
-10.8 |
Result before
tax |
13 |
-326 |
105 |
-924 |
Result for the
period |
13 |
-331 |
105 |
-924 |
% of net
sales |
0.7 |
-14.8 |
|
-12.2 |
|
|
|
|
|
Earnings per
share, EUR
(basic and diluted) |
0.001 |
-0.017 |
104 |
-0.055 |
Equity per
share, EUR |
0.021 |
0.010 |
106 |
0.020 |
|
|
|
|
|
Cash flow from
operating
activities |
-5 |
475 |
-101 |
850 |
Cash and cash
equivalents |
264 |
172 |
52 |
885 |
Net
borrowings |
1,032 |
2,041 |
-49 |
934 |
Gearing,
% |
275.7 |
1,285.1 |
-79 |
268 |
Equity ratio,
% |
13.6 |
3.6 |
277 |
8.1 |
Return on
equity, % |
3.5 |
-410.2 |
104 |
-221.5 |
Return on investment, % |
1.7 |
-57.6 |
97 |
-42.0 |
REPORTING AND BUSINESS OPERATIONS
QPR Software Plc is a pioneer in business process optimization
solutions and has positioned itself as a leading player in Digital
Twin of an Organization (DTO) technology.
QPR innovates, develops, and delivers software for analyzing,
monitoring and modeling the operations of organizations. The
company also offers consulting services to ensure that customers
get full value from the software and associated methods.
QPR Software reports one business segment, which is
Organizational Development of organizations. In addition to this,
the Company reports revenue from products and services as follows:
Software licenses, Renewable software licenses, Software
maintenance services, Cloud services, and Consulting.
Recurring revenue reported by the Company consists of Software
maintenance services and SaaS net sales. In addition to these,
recurring revenue also includes Renewable software licenses. The
Company aims to increasingly focus on continuous services,
particularly in developing its Software-as-a-Service (SaaS)
business.
Software licenses are sold to customers for perpetual use or for
an agreed, limited period.
Renewable software licenses are sold to customers as a user
right with an indefinite-term contract. These contracts are
automatically renewed at the end of the agreed period, usually one
year, unless the agreement is terminated within the notice.
Renewable license revenue is recognized at one point in time, in
the beginning of the invoicing period, yet at the earliest on the
delivery.
The geographical areas reported are Finland, the rest of Europe
(including Turkey), and the rest of the world. Net sales are
reported according to the location of the customer’s headquarters.
Until 2023, the company provided consulting services, predominantly
to public administration, which were unrelated to its core
business. In the end of 2023, the company discontinued these
activities. In the future, the company will prioritize offering
consulting services tailored to the software it develops, aiming to
deliver maximum added value to its customers.
The company began reporting the production costs of the cloud
platform within the materials and services expense category
starting from 2024. The figures for the comparative period will be
presented at the end of this interim report's table section,
according to both reported and 2024 cost groupings.
NET SALES DEVELOPMENT
NET SALES BY PRODUCT GROUP
EUR in thousands |
Jan-Mar, 2024 |
Jan-Mar, 2023 |
Change,
% |
Jan-Dec, 2023 |
|
|
|
|
|
Software
licenses |
234 |
179 |
30 |
485 |
Renewable
software licenses |
225 |
302 |
-25 |
504 |
Software
maintenance services |
411 |
422 |
-3 |
1,720 |
SaaS |
661 |
575 |
15 |
2,371 |
Consulting |
237 |
759 |
-69 |
2,469 |
Total |
1,769 |
2,237 |
-21 |
7,550 |
NET SALES BY GEOGRAPHIC AREA
EUR in thousands |
Jan-Mar, 2024 |
Jan-Mar, 2023 |
Change,
% |
Jan-Dec, 2023 |
|
|
|
|
|
Finland |
701 |
1,078 |
-35 |
3,499 |
Europe incl.
Turkey |
767 |
933 |
-18 |
3,128 |
Rest of the world |
302 |
227 |
33 |
923 |
Total |
1,769 |
2,237 |
-21 |
7,550 |
JANUARY-MARCH 2024
The net sales for January-March was 1,769 thousand euros
(2,237), and it decreased by 21 % compared to the comparison
period. The group discontinued consulting services outside our core
business in Finland at the end of 2023. The proportion of
continuous net sales out of total net sales increased from 59
percent to 73 percent.
Our SaaS net sales, which is at the core of our strategy, grew
by 15%, and software net sales grew by 4% in the January-March
period.
The net sales of software licenses was 234 thousand euros (179),
and it grew by 30% primarily due to a new licensing agreement made
with a customer from the Middle East, as well as expansion with a
global pharmaceutical company according to a previous
agreement.
The net sales from renewable software licenses was 225 thousand
euros (301), a decrease of 25 %. This decline was due to several
factors, such as the expiration of individual customer contracts,
transitioning to the SaaS service model, and negative currency
exchange rate effects. However, these factors were partially offset
by price increases made to counter inflationary pressures.
The net sales of software maintenance services was 412 thousand
euros (434), a decrease of 5%. This was due to the transition of
existing customers to the SaaS service model, negative effects of
currency exchange rates, and customer churn. This was offset by the
expansion of cooperation with existing customers, new customer
contracts, and price increases made to counteract inflationary
pressures.
SaaS net sales grew by 15 % and was 661 thousand euros (575).
The increase in SaaS net sales was mainly a result of expanding
cooperation with existing customers and successes in acquiring new
ones. In addition, growth was boosted by customers switching from
licenses to the SaaS service model and partly by price increases
against inflationary pressure. The negative effect of exchange
rates and customer churn, on the other hand, decreased SaaS net
sales.
The consulting net sales was 237 thousand euros (759),
decreasing by 69 % after the company ceased its core business
outside consulting in Finland. Additionally, the company recorded
revenue from fixed-price projects in the Middle East according to
the completion percentage in the first quarter of 2023. These
projects were concluded during the second quarter of the same
year.
The Group’s net sales was 40 % (53) from Finland, 43% (31) from
the rest of Europe (including Turkey) and 17 % (16) from the rest
of the world.
FINANCIAL DEVELOPMENT
JANUARY-MARCH 2024
The Group’s EBITDA in January-March was 295 thousand euros
(-36), an improvement of 332 thousand euros compared to the
previous year. The operating profit was 33 thousand euros (-287),
an increase of 320 thousand euros compared to the reference period.
The net profit for the period was 13 thousand euros, which is a
significant improvement compared to the previous year (-331).
The active measures implemented by the company in 2023 to
improve cost structure and develop business profitability are
already partially visible in the first quarter of 2024 and fully
realized by the third quarter.
The variable expenses of the group amounted to 260 thousand
euros (469), primarily driven by the completion of demanding
fixed-price software delivery projects in the Middle East during
the previous year’s second quarter. This completion resulted in a
notable decrease in the requirement for external services, reducing
expenses.
The company's fixed expenses were 1,319 thousand euros (2,079),
and they decreased by 37% compared to the comparison period. This
decrease was due to the savings programs implemented in the second
and last quarter of 2023, as well as the reduced personnel costs as
a result of the change negotiations. The overall effect of the
cost-saving measures will be realized from the third quarter of
2024. The effect of cost-saving measures was partially reduced by
lower product development activations.
The credit loss provision, included in the fixed costs of the
quarter, was -1 thousand euros, (1) due to a release in previous
provisions.
Earnings per share were EUR 0.001 (-0.017) per share.
FINANCE AND INVESTMENTS
The cash flow from operations for the period was negative 5
thousand euros (475). The main reason for this change compared to
the comparable period was successful collection in the last quarter
of 2023, particularly regarding the advanced license payments for
2024. A greater portion of the advance payments was collected in
the last quarter of 2023, leading to a lower cash flow from annual
licenses in the first quarter of 2024. Annual billing is mostly
concentrated around the end of the year, making it seasonal.
Additionally, changes in working capital were affected by higher
sales commissions paid to the company's personnel for 2023 and
holiday compensation payments made to employees who left the
company due to change negotiations. As a result of the company's
strong cost-saving measures, the continuous outflow of cash
decreased significantly towards the end of the quarter.
Net financial expenses amounted to 16 thousand euros (27),
including exchange losses of 2 thousand euros (4).
Investments totaled 105 thousand euros (275), and those were
mainly research and development investments.
The company's financing net cash flow was -512 thousand euros
(-45). This was mainly due to the company reducing its loan by 500
thousand euros and paying 12 thousand euros in office rent.
The group's financial situation is fair. At the end of the
review period, the group's cash and cash equivalents were 264
thousand euros (172) and short-term receivables were 1,460 thousand
(1,685). Euro-denominated receivables accounted for 63%, and 76% of
invoices had not yet matured. Of the total amount of short-term
receivables, the share of 1-30 days overdue receivables was 9%,
30-60 days 1% and more than 60 days 13%. The company was able to
improve its invoicing cycle and enhance its collection. In
addition, the group has available a credit limit of 500,000 euros.
At the end of the review period, the group had a bank loan of EUR
1,500 thousand, of which EUR 1,000 thousand was long-term.
In accordance with the original financing agreement, the first
installment of EUR 0.5 million is due on January 31, 2024. After
this, installments of EUR 0.5 million will mature annually in
January 2025 and 2026. The covenants related to the loan are based
on the company's EBITDA and equity ratio. The EBITDA of the
covenants is tested every six months, and the equity ratio is
tested annually according to the situation on the last day of the
year. In the testing carried out on 31 December 2023, EBITDA fell
below the agreed covenant limit. In December 2023, the bank pledged
not to exercise its receivables maturity right under the financing
agreement in the event of a potential violation of the group's
operating margin covenant as per the 2023 financial statements.
The company's free cash flow, operating and investment cash
flows, and office lease costs totaled -123 thousand euros (+155).
The significant change was due to the improvement of operating cash
flow, lower cash flows from investments, and lower paid office
lease costs.
The equity ratio was 13.7% (3.6%), and it enhanced by the
improved results, the directed share issue carried out in the third
quarter resulting 760 thousand euros proceed. Additionally, the
headquarters' lease agreement, which the company shortened from 5.5
years to 3.5 years in June 2023, improved the equity ratio. The
equity ratio was reduced by the loss-making result of -924 thousand
euros for the financial year 2023.
PRODUCT DEVELOPMENT
QPR has positioned itself as a leading player in Digital Twin of
an Organization (DTO) technology. The company innovates and
develops software products that analyze, measure, and model the
operations of organizations.
QPR innovates and develops software products that analyze,
measure, and model operations in organizations. The Company
develops the following software products: QPR ProcessAnalyzer, QPR
EnterpriseArchitect, QPR ProcessDesigner, and QPR Metrics.
Product development expenses for the first quarter were 323
thousand euros (510) and product development expenses were
capitalized in the balance sheet of 105 thousand euros (275).
Product development depreciation was recorded at 226 thousand euros
(171). The amortization period for capitalized product development
expenses is four years.
PERSONNEL
At the end of the review period, the group employed 35 people
(65). The average number of personnel in January-March was 39
(67).
The average age of the personnel is 44 (46) years. Women account
for 31% (26) of employees, and men for 61% (74). Of all personnel,
17% (16) work in sales and marketing, 28% (43) in consulting and
customer care, 41% (29) in product development, and 14% (12) in
administration.
Personnel expenses were 1,021 thousand euros (1,661), of which
the share of salaries and bonuses was 872 thousand euros
(1,378).
For incentive purposes, the company has a bonus program covering
the entire personnel. The top management's short-term remuneration
consists of monetary salary, fringe benefits and a possible annual
bonus, mainly determined by the net sales development of the group
and profit units. In addition, the company has a stock option
program for key personnel.
SHARES AND SHAREHOLDER
Trading of shares |
Jan-Mar,
2024 |
Jan-Mar,
2023 |
Change,
% |
Jan-Dec,
2023 |
|
|
|
|
|
Shares traded,
pcs |
1,856,283 |
483,326 |
284 |
3,538,455 |
Volume, EUR |
768,482 |
304,257 |
153 |
1,585,931 |
% of shares |
10.4 |
3.0 |
245 |
19.8 |
Average trading
price, EUR |
0.41 |
0.63 |
-34 |
0.45 |
Average trading
value per day, EUR |
12,198 |
4,754 |
157 |
6,318 |
Treasury shares
acquired during the year, pcs |
- |
- |
- |
- |
Shares and market capitalization |
Mar 31,
2024 |
Mar 31,
2023 |
Change,
% |
Dec 31,
2023 |
|
|
|
|
|
Total number of
shares, pcs |
18,175,192 |
16,455,321 |
10 |
18,175,192 |
Treasury shares,
pcs |
339,471 |
413,487 |
-18 |
339,471 |
Book counter
value, EUR |
0.11 |
0.11 |
- |
0.11 |
Outstanding
shares, pcs |
17,835,721 |
16,041,834 |
11 |
17,835,721 |
Number of
shareholders |
2,008 |
1,747 |
15 |
1,943 |
Closing price,
EUR |
0.69 |
0.69 |
0 |
0.33 |
Market
capitalization, EUR |
12,306,647 |
11,036,782 |
12 |
5,957,131 |
Book counter
value of all treasury
shares, EUR |
37,342 |
45,484 |
-18 |
37,342 |
Total purchase
value of all treasury
shares, EUR |
347,552 |
405,726 |
-14 |
347,552 |
Treasury shares, % of all shares |
1.9 |
2.5 |
-26 |
1.9 |
GOVERNANCE
The Annual General Meeting of QPR Software Plc was held May 3,
2023 in Helsinki. The Annual General Meeting adopted the Company's
financial statements for the financial year 2022 and discharged the
members of the Board of Directors and the CEO from liability. The
Annual General Meeting resolved that no dividend be paid based on
the balance sheet adopted for the financial year ended on December
31, 2022, further adopted the Company’s Remuneration Report, and
resolved to amend the Company’s Articles of Association. Further,
the Annual General Meeting resolved to reduce the share capital of
the Company, to authorize the Board of Directors to decide on share
issues and on the issue of other special rights entitling to shares
as well as on the acquisition of own shares.
Annual accounts and the use of the profit shown on the
balance sheet
The Annual General Meeting adopted the Company’s financial
statements and discharged the members of the Board of Directors and
the CEO from liability for the financial period January 1 –
December 31, 2022. The Annual General Meeting resolved that no
dividend be paid based on the balance sheet adopted for the
financial year ended on December 31, 2022.
Board of Directors and Auditor
According to the Nomination Committee, The Annual General
Meeting confirmed that the number of Board members is four. Pertti
Ervi was re-elected as the Chairman of the Board of Directors and
Matti Heikkonen, Antti Koskela, and Jukka Tapaninen were re-elected
as members of the Board of Directors.
The Authorised Public Accountants KPMG Oy Ab was re-elected as
the Company’s auditor. KPMG Oy Ab has announced that Petri
Kettunen, Authorized Public Accountant, will act as the principal
auditor.
Remuneration of the members of the Board of Directors
and the Auditor
The Nomination Committee proposed, and the Annual General
Meeting resolved that the Chairman of the Board of Directors be
paid EUR 45,000 per year and the other members of the Board of
Directors EUR 25,000 per year. Approximately 40 percent of the
remuneration will be paid in shares and 60 percent in cash. The
shares will be granted as soon as possible after the Annual General
Meeting and if the insider regulations allow it. The members of the
Board of Directors will also be reimbursed for travel and other
expenses incurred while they are managing the Company's
affairs.
The remuneration to the Auditor shall be paid according to the
reasonable invoice.
Amendment of the Articles of Association
The Annual General Meeting resolved to amend Articles 6 and 9 of
the Company’s Articles of Association. Article 6 was amended to
correspond to the responsibility for the auditor oversight
stipulated in the amended Finnish Auditing Act (1141/2015) and
further so that the term of the auditor shall end at the closing of
the first Annual General Meeting following the election. Article 9
was amended to enable holding a general meeting entirely without a
meeting venue as a so-called remote meeting in addition to the
Helsinki, Espoo and Vantaa. Further, said article was amended due
to certain legislation changes stipulating the matters to be
resolved upon in an Annual General Meeting.
Reduction of the share capital
The Annual General Meeting resolved to reduce the Company’s
registered share capital from EUR 1,359,090 to EUR 80,000, i.e. by
an aggregate amount of EUR 1,279,090, with the reduced amount of
EUR 1,279,090 being transferred to the reserve for invested
unrestricted shareholders’ equity. The reduction of the share
capital requires a public notice in accordance with the Finnish
Companies Act.
Authorization of the Board of Directors to decide on
share issues and on the issue of other special rights entitling to
shares
The Annual General Meeting resolved to authorize the Board of
Directors to decide on issuances of new shares and conveyances of
the own shares held by the Company (share issue) either in one or
more instalments. The share issues can be carried out against
payment or without consideration on terms to be determined by the
Board of Directors. The authorization also includes the right to
issue special rights referred to in Chapter 10, Section 1 of the
Finnish Companies Act, which entitle to the Company's new shares or
own shares held by the Company against consideration. Based on the
authorization, the maximum number of new shares that may be issued
and own shares held by the Company that may be conveyed in share
issues or on the basis of special rights referred to in Chapter 10,
Section 1 of the Finnish Companies Act is 3,200,000 shares. The
authorization includes the right to deviate from the shareholders'
pre-emptive subscription right. The authorization is in force until
the next Annual General Meeting.
Authorization of the Board of Directors to decide the
acquisition of own shares
The Annual General Meeting resolved to authorize the Board of
Directors to decide on the acquisition of the Company’s own shares.
Based on the authorization, an aggregate maximum amount of 500,000
own shares may be acquired, either in one or more instalments. The
authorization includes the right to acquire own shares otherwise
than in proportion to the existing shareholdings of the Company’s
shareholders, using the Company’s non-restricted shareholders’
equity. The authorization is in force until the next Annual General
Meeting.All related materials can be found in the Investors section
on the company's website.
The Nomination Board
The Shareholders' Nomination Board of QPR Software Plc is a body
of QPR Software’s shareholders responsible for preparing proposals
to the Annual General Meeting for the election and remuneration of
the members of the Board of Directors, and the remuneration of the
Board committees. The Nomination Board consists of three members
who represent QPR Software’s three largest shareholders who, on
August 30 preceding the next year’s Annual General Meeting, hold
the largest number of votes calculated of all shares in QPR
Software.
The Nomination Board is chaired by Roger Kempe, representing Oy
Finncorp Ab, and consists of Erkki Myllärniemi, representing UMO
Capital Oy, and Eero Leskinen, representing Vesa-Pekka
Leskinen.
The Nomination Board submits the following proposals to the
Annual General Meeting, which is planned to be held on May 15,
2024. The proposals will be also included in the notice to the
Annual General Meeting, which will be published separately later
on.
Electing Board members and the Chairman
The Nomination Board proposes to the Annual General Meeting that
Pertti Ervi, Antti Koskela and Jukka Tapaninen be re-elected as
Board members. Current Board member Matti Heikkonen has informed
the Nomination Board that he is no longer available for
re-election. The Nomination Board further proposes that Linda von
Schantz be elected to the Board of QPR Software as a new member.
All the nominees have given their consent to the position, and they
are independent of the Company and of the Company’s significant
shareholders.
Furthermore, the Nomination Board proposes that Pertti Ervi be
re-elected as the Chairman of the Board.
The curriculum vitae of the proposed new member of the Board,
Linda von Schantz, is attached to this stock exchange release.
Information about the experience and previous positions of the
persons proposed to be re-elected as Board members is available on
QPR's website at:
https://www.qpr.com/company/board-of-directors
Deciding on the remuneration of the Board
members
The Nomination Board proposes that the remuneration of the Board
members be kept unchanged. According to the proposal, the Chairman
of the Board will be paid EUR 45,000 per year and the other Board
members EUR 25,000 per year. Approximately 40% of the
above-mentioned remuneration is paid in shares and 60% in cash. The
Shares will be transferred at earliest after the General Meeting
election and in accordance with the insider trading
regulations.
Furthermore, the Nomination Board proposes that the members of
the Board of Directors will be reimbursed for travel and other
expenses incurred while they are managing the Company's
affairs.
SHORT-TERM RISKS AND UNCERTAINTIES
Internal control and risk management at QPR Software aim to
ensure that the Company operates efficiently and effectively,
distributes reliable information, complies with regulations and
operational principles, reaches its strategic goals, reacts to
changes in the market and operational environment, and that
business continuity is secured considering the financial
position.
The Company has identified the following three groups of risks
related to its operations: risks related to business operations
(country, customer, personnel, legal), risks related to information
and products (QPR products, IPR, data privacy, and security), and
risks related to financing and liquidity (foreign currency,
short-term cash flow).
The Company has an insurance policy covering property,
operational, and liability risks. Financial risks include
reasonable credit risk concerning individual business partners,
which is characteristic of any international business. QPR seeks to
limit this credit risk by continuously monitoring standard payment
terms, receivables, and credit limits.
Approximately 78% of the Group’s trade receivables were in euros
at the end of the quarter (60%). At the end of the quarter, the
Company had not hedged its non-euro trade receivables.
EVENTS AFTER THE REVIEW PERIOD
No events after the review period.
FINANCIAL REPORTING
QPR will publish three Interim Reports in 2024:
- Half-year Financial Report January-June 2024 on Friday 2 August
2024
- Interim Report January-September 2024 on Friday 25
October 2024
QPR Software's financial statement bulletin, activity report,
audit report, and report on the corporate governance system for the
financial year 2023 were published on Friday, February 16,
2024.
QPR's Annual Report 2023 was published on Friday, March 22,
2024.
QPR's Annual General Meeting 2024 is scheduled to be held on
Wednesday 15 May 2024. The Board of Directors convenes the Annual
General Meeting with an invitation to be announced later.
QPR SOFTWARE PLC
BOARD OF DIRECTORS
For further information:
Heikki Veijola
Chief Executive Officer
QPR Software Plc
Tel. +358 40 922 6029
QPR Software in Brief
QPR Software (Nasdaq Helsinki) is a leading player in the
Digital Twin of an Organization (DTO) use case and one of the most
advanced process mining software companies in the world. The
company innovates, develops, and delivers software for analyzing,
monitoring, and modeling organizational operations. Additionally,
QPR provides consulting services to ensure its customers derive
full benefits from the software and associated methodologies.
www.qpr.com
DISTRIBUTION
Nasdaq Helsinki
Key medias
www.qpr.com
FINANCIAL STATEMENT INFORMATION
QPR Software’s Board of Directors has approved this interim
report for January 1–March 31, 2024, to be published.
The figures for the financial year 2023 presented in the figures
section of the interim report have been audited. The presented
interim financial report figures have not been audited.
CONSOLIDATED COMPREHENSIVE INCOME
STATEMENT
EUR in thousands, unless
otherwise indicated |
Jan-Mar, 2024 |
Jan-Mar, 2023 |
Change,
% |
Jan-Dec, 2023 |
|
|
|
|
|
Net sales |
1,769 |
2,237 |
-21 |
7,550 |
Other
operating income |
- |
- |
- |
1 |
|
|
|
|
|
Materials and
services |
260 |
469 |
-45 |
896 |
Employee
benefit expenses |
1,021 |
1,661 |
-39 |
5,287 |
Other operating expenses |
193 |
144 |
34 |
1,186 |
EBITDA |
295 |
-36 |
915 |
182 |
|
|
|
|
|
Depreciation and amortization |
263 |
251 |
5 |
995 |
Operating
result |
32 |
-287 |
111 |
-813 |
|
|
|
|
|
Financial
income and expenses |
-20 |
-39 |
-49 |
-111 |
Provisions |
- |
- |
- |
- |
Result before tax |
13 |
-326 |
104 |
-924 |
|
|
|
|
|
Income taxes |
0 |
-5 |
- |
0 |
Result for the
period |
13 |
-331 |
104 |
-924 |
|
|
|
|
|
|
|
|
|
|
Earnings per
share, EUR
(basic and diluted) |
0.001 |
-0.021 |
103 |
-0.055 |
|
|
|
|
|
Consolidated
statement of
comprehensive income: |
|
|
|
|
Result for the
period |
13 |
-331 |
104 |
-924 |
Exchange differences on
translating foreign operations |
-1 |
1 |
200 |
1 |
Total comprehensive income |
12 |
-330 |
104 |
-925 |
CONDENSED CONSOLIDATED BALANCE
SHEET
EUR in thousands |
Mar 31,
2024 |
Mar 31,
2023 |
Change,
% |
Dec 31,
2023 |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Non-current
assets: |
|
|
|
|
Intangible
assets |
2,123 |
2,513 |
-15 |
2,245 |
Goodwill |
358 |
358 |
0 |
358 |
Tangible
assets |
68 |
141 |
-52 |
81 |
Right-of-use
assets |
295 |
707 |
-58 |
318 |
Other non-current assets |
277 |
277 |
0 |
277 |
Total
non-current assets |
3,122 |
3,997 |
-22 |
3,279 |
|
|
|
|
|
Current
assets: |
|
|
|
|
Trade and
other receivables |
1,460 |
1,685 |
-13 |
1,706 |
Cash and cash equivalents |
264 |
172 |
53 |
884 |
Total current
assets |
1,723 |
1,857 |
-7 |
2,590 |
|
|
|
|
|
Total assets |
4,845 |
5,853 |
-17 |
5,869 |
|
|
|
|
|
Equity and
liabilities |
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
Share
capital |
80 |
1,359 |
-94 |
80 |
Other
funds |
21 |
21 |
0 |
21 |
Treasury
shares |
-348 |
-406 |
-14 |
-348 |
Translation
differences |
-67 |
-67 |
-1 |
-67 |
Invested
non-restricted equity fund |
4,925 |
2,943 |
67 |
4,925 |
Retained earnings |
-4,237 |
-3,691 |
-15 |
-4,263 |
Equity
attributable to shareholders of
the parent company |
374 |
159 |
136 |
348 |
|
|
|
|
|
Non-current
liabilities: |
|
|
|
|
Interest-bearing liabilities |
500 |
1,000 |
-50 |
1,000 |
Interest-bearing lease liabilities |
170 |
609 |
-72 |
192 |
Total
non-current liabilities |
670 |
1,609 |
-58 |
1,192 |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
Provisions |
- |
8 |
- |
- |
Interest-bearing liabilities |
500 |
500 |
0 |
500 |
Interest-bearing lease liabilities |
126 |
104 |
21 |
126 |
Advances
received |
1,582 |
1,438 |
10 |
1,558 |
Accrued
expenses and prepaid income |
1,175 |
1,438 |
-18 |
1,539 |
Trade and other payables |
419 |
597 |
-30 |
607 |
Total current
liabilities |
3,802 |
4,085 |
-7 |
4,329
|
|
|
|
|
|
Total liabilities |
4 471 |
5 694 |
-21 |
5 521 |
|
|
|
|
|
Total equity and liabilities |
4 845 |
5 853 |
-17 |
5 869 |
CONSOLIDATED CONDENCED CASH FLOW STATEMENT
EUR in thousands |
Jan-Mar, 2024 |
Jan-Mar, 2023 |
Change,
% |
Jan-Dec, 2023 |
|
|
|
|
|
Cash flow from
operating activities: |
|
|
|
|
Result for the
period |
13 |
-269 |
105 |
-924 |
Adjustments to
the result |
312 |
192 |
62 |
1,078 |
Working
capital changes |
-314 |
583 |
-154 |
821 |
Interest and
other financial
expenses paid |
-16 |
-27 |
-42 |
-107 |
Interest and
other financial
income received |
0 |
0 |
0 |
0 |
Income taxes paid |
0 |
-5 |
-100 |
-19 |
Net cash from
operating activities |
-5 |
475 |
-101 |
849 |
|
|
|
|
|
Cash flow from
investing activities: |
|
|
|
|
Purchases of tangible and
intangible assets |
-105 |
-275 |
-62 |
-620 |
Net cash used
in investing activities |
-105 |
-275 |
-62 |
-620 |
|
|
|
|
|
Cash flow from
financing activities: |
|
|
|
|
Proceeds from
short term
borrowings |
1,000 |
1,500 |
-33 |
1,500 |
Repayments of
short-term
borrowings |
-1,500 |
-1,500 |
0 |
-1,500 |
Payment of
lease liabilities |
-12 |
-45 |
-74 |
-121 |
Share issue net |
- |
- |
- |
760 |
Net cash used
in financing activities |
-512 |
-45 |
1,038 |
639 |
|
|
|
|
|
Net change in
cash and cash
equivalents |
-623 |
156 |
499 |
868 |
Cash and cash
equivalents
at the beginning of the period |
884 |
17 |
5,103 |
17 |
Effects of exchange rate changes
on cash and cash equivalents |
2 |
0 |
0 |
0 |
Cash and cash equivalents
at the end of the period |
264 |
172 |
52 |
884 |
|
|
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
NOTES TO INTERIM FINANCIAL STATEMENTS
EUR in thousands |
Share
capital |
Other
funds |
Translation
differences |
Treasury
shares |
Invested non-
restricted
equity fund |
Retained
earnings |
Total |
Equity
Jan 1, 2023 |
1 359 |
21 |
-66 |
-406 |
2 943 |
-3 364 |
487 |
Stock option scheme |
|
|
|
|
|
36 |
36 |
Reduction of share
capital |
-1 279 |
|
|
|
1 279 |
|
0 |
Disposal of own shares |
|
|
|
58 |
|
-10 |
48 |
Share issue, net |
|
|
|
|
703 |
|
703 |
Comprehensive income |
|
|
0 |
|
|
-924 |
-925 |
Equity
Dec 31, 2023 |
80 |
21 |
-66 |
-348 |
4 925 |
-4 263 |
348 |
Stock option scheme |
|
|
|
|
|
13 |
13 |
Reduction of share
capital |
|
|
|
|
|
|
0 |
Disposal of own shares |
|
|
|
|
|
0 |
0 |
Share issue, net |
|
|
|
|
|
|
0 |
Comprehensive income |
|
|
-1 |
|
|
13 |
12 |
Equity
Mar 31, 2024 |
80 |
21 |
-67 |
-348 |
4 925 |
-4 237 |
374 |
ACCOUNTING PRINCIPLES
This report complies with the requirements of IAS 34” Interim
Financial Reporting”.
The interim report does not contain full notes and other
information presented in the financial statements, and therefore
the interim report should be read in conjunction with the Financial
Statements Bulletin published for 2023.
The interim report has been drawn up according to the same
accounting principles as in the Consolidated financial statements
for 2023 excluding standards and amendments to standards which
entered into force on January 1, 2024. The new standards and
standard amendments had no significant impact on QPR Software’s
consolidated financial statements.
Considering the company's financial position, this financial
statement has been prepared on a going concern basis. The company
entered into a refinancing agreement in January 2023.
In preparation of the consolidated interim report, company’s
management is required to make estimates and assumptions regarding
the future and to consider the appropriate application of
accounting principles, which means that actual results may differ
from those estimated.
All amounts presented in this report are consolidated figures,
unless otherwise noted. The amounts presented in the report are
rounded, so the sum of individual figures may differ from the sum
reported.
INTANGIBLE AND TANGIBLE ASSETS
EUR in thousands |
Jan-Mar, 2024 |
Jan-Mar, 2023 |
Jan-Dec,
2023 |
|
|
|
|
Increase in
intangible assets: |
|
|
|
Acquisition
cost Jan 1 |
14,836 |
14,217 |
14,217 |
Increase |
105 |
275 |
619 |
|
|
|
|
Increase in
tangible assets: |
|
|
|
Acquisition
cost Jan 1 |
2,816 |
2,816 |
2,816 |
CHANGES IN INTEREST-BEARING LIABILITIES
EUR in thousands |
Jan-Mar, 2024 |
Jan-Mar, 2023 |
Jan-Dec,
2023 |
|
|
|
|
Interest-bearing liabilities Jan 1 |
1,818 |
2,279 |
2,279 |
Proceeds from
borrowings |
1,000 |
1,500 |
1,500 |
IFRS 16 |
-23 |
-45 |
-319 |
Repayments |
1,500 |
1,521 |
1,641 |
Interest-bearing liabilities Dec 31 |
1,295 |
2,213 |
1,818 |
PLEDGES AND
COMMITMENTS
EUR in thousands |
Mar 31, 2024 |
Mar 31, 2023 |
Change,
% |
Dec 31,
2023 |
|
|
|
|
|
Business
mortgages (held by the Company) |
2,382 |
2,382 |
0 |
2,382 |
|
|
|
|
|
Minimum lease
payments based on lease agreements: |
|
|
|
|
Maturing in
less than one year |
30 |
42 |
-28 |
30 |
Maturing in 1-5 years |
19 |
69 |
-73 |
27 |
Total |
49 |
111 |
-56 |
57 |
|
|
|
|
|
Total pledges and commitments |
2,439 |
2,493 |
-2 |
2,439 |
CONSOLIDATED INCOME STATEMENT BY QUARTER (2023
RESTATED)
EUR in thousands |
Jan-Mar,
2024 |
Oct-Dec,
2023 |
July-Sept,
2023 |
April-June,
2023 |
Jan-Mar,
2023 |
|
|
|
|
|
|
Net sales |
1 769 |
1 599 |
1 806 |
1 908 |
2 237 |
Other
operating income |
|
- |
- |
1 |
- |
|
|
|
|
|
|
Materials and
services |
260 |
229 |
240 |
304 |
469 |
Employee
benefit expenses |
1 021 |
1 202 |
1 056 |
1 368 |
1 661 |
Other operating expenses |
193 |
199 |
268 |
229 |
144 |
EBITDA |
295 |
-31 |
242 |
8 |
-36 |
|
|
|
|
|
|
Depreciation and amortization |
263 |
252 |
254 |
238 |
251 |
Operating
result |
32 |
-283 |
-12 |
-231 |
-287 |
|
|
|
|
|
|
Financial
income and expenses |
-20 |
-24 |
-25 |
-23 |
-39 |
Provisions |
0 |
- |
- |
- |
- |
Result before tax |
13 |
-307 |
-37 |
-254 |
-326 |
|
|
|
|
|
|
Income taxes |
0 |
0 |
- |
5 |
-5 |
Result for the period |
13 |
-307 |
-37 |
-249 |
-331 |
CONSOLIDATED INCOME STATEMENT BY QUARTER
(2023 AS PUBLISHED)
EUR in thousands |
Oct-Dec,
2023 |
July-Sept,
2023 |
April-June,
2023 |
Jan-Mar,
2023 |
|
|
|
|
|
Net sales |
1 599 |
1 806 |
1 908 |
2 237 |
Other operating
income |
- |
- |
1 |
- |
|
|
|
|
|
Materials and
services |
134 |
147 |
221 |
394 |
Employee
benefit expenses |
1 202 |
1 056 |
1 368 |
1 599 |
Other operating expenses |
294 |
361 |
313 |
218 |
EBITDA |
-31 |
242 |
7 |
26 |
|
|
|
|
|
Depreciation and amortization |
252 |
254 |
238 |
251 |
Operating
result |
-283 |
-12 |
-231 |
-225 |
|
|
|
|
|
Financial
income and expenses |
-24 |
-25 |
-23 |
-39 |
Provisions |
- |
- |
- |
- |
Result before tax |
-307 |
-37 |
-254 |
-264 |
|
|
|
|
|
Income taxes |
0 |
- |
5 |
-5 |
Result for the period |
-307 |
-37 |
-249 |
-269 |
GROUP KEY FIGURES
EUR in thousands, unless
otherwise indicated |
Jan-Mar or Mar, 2024 |
Jan-Mar or Mar, 2023 |
Jan-Dec or
Dec 31, 2023 |
|
|
|
|
Net sales |
1,769 |
2,237 |
7,550 |
Net sales
growth, % |
-20.9 |
1.6 |
-3.5 |
EBITDA |
295 |
-36 |
182 |
% of net
sales |
16.7 |
-1.6 |
2.4 |
Operating
result |
32 |
-287 |
-813 |
% of net
sales |
1.8 |
-12.8 |
-10.8 |
Result before
tax |
13 |
-326 |
-924 |
% of net
sales |
0.7 |
-14.6 |
-12.2 |
Result for the
period |
13 |
-331 |
-924 |
% of net
sales |
0.7 |
-14.8 |
-12.2 |
|
|
|
|
Return on
equity (per annum), % |
14.1 |
-410.2 |
-221.5 |
Return on
investment (per annum), % |
6.9 |
-57.6 |
-42.0 |
Cash and cash
equivalents |
264 |
172 |
885 |
Net
borrowings |
1,032 |
2,041 |
934 |
Equity |
374 |
159 |
348 |
Gearing,
% |
276 |
1285 |
268 |
Equity ratio,
% |
13.6 |
3.6 |
8.1 |
Total balance
sheet |
4,845 |
5,853 |
5,869 |
|
|
|
|
Investments in
non-current assets |
106 |
270 |
637 |
% of net
sales |
6.0 |
12 |
8.4 |
Product
development expenses |
332 |
510 |
1,427 |
% of net
sales |
18.8 |
22.8 |
18.9 |
|
|
|
|
Average number
of personnel |
39 |
67 |
57 |
Personnel at
the beginning of period |
49 |
85 |
85 |
Personnel at
the end of period |
35 |
65 |
49 |
|
|
|
|
Earnings per
share, EUR
(basic and diluted) |
0.001 |
-0.017 |
-0.055 |
Equity per share, EUR |
0.021 |
0.010 |
0.020 |
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