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Axway Updates on Second Quarter Financial Earnings [Professional Services Close - Up](Professional Services Close - Up Via Acquire Media NewsEdge) The Board of Directors of Axway Software, under the chairmanship of Pierre Pasquier, closed the financial statements for the first six months of 2014. According to its release on July 24, the Company noted: -Total revenue of EUR114.9 million in H1/2014 with organic growth of 5.7 percent compared to the first half of 2013; -Profit on operating activities of EUR5.4 million or 4.7 percent (compared with 6.7 percent in the first half of 2013); -Net profit of EUR2.8 million. On overall activity: The demand in Middleware's historical segments is continuing to undergo a major transformation, confirming the importance of incorporating today's emergent yet extremely dynamic technologies. The impact of these new technologies in the Middleware segment is still limited and led to an overall stable level of licenses over Q2. Revenue by activity, weak demand from the infrastructure market has penalized Licenses, especially in the USA. There was a lack of "major contract" wins during the second quarter, which was not compensated by the very encouraging gains made in the API and OI segments.Maintenance's outstanding performance should be underscored and it now represents more than half (50 percent) of the overall business activity over the six-month period. Services continue to make a turnaround with total growth of close to 10 percent during the first half. Revenue by type of activity Customers have greeted the OI technology, coming from the Systar acquisition in the first half of 2014, as a real enhancement to Axway's offering and the products synergies have been developing very naturally.In the first half of 2014, management devoted a considerable amount of energy to the Systar acquisition that was successfully completed in June 2014, now allowing an integration project to take place in the second half of 2014.Profit on operating activities amounted to EUR5.4 million (4.7 percent of revenue). In comparison with the first half of 2013, the weaker performance of Licenses in the second quarter of 2014 should be taken into account. Financial position Axway sustained a strong financial position at June 30, with a cash balance of EUR41.3 million and equity totaling EUR255.3 million. Bank indebtedness amounted to EUR60.9 million at June 30, including the financing for the acquisition of Systar in April 2014. The company's debt at June 30, allows us to comfortably respect our banking covenants. The June 30, net income per share of EUR0.13 per share is not directly comparable to the same period of 2013. The 2013 first semester net result integrates the GSA matter settlement with the American Department of Justice and the activation of the tax losses in the United States, made possible from the growth in profitability (historic and forecasted) of the US subsidiary of the group. Without the impact of these two exceptional items, our net result would have been EUR5.6 million or EUR0.27 per share as compared to EUR0.13 per share for the same period in 2012. The consolidated interim financial statements were subject to a limited audit. The limited audit report is in the process of being published. Outlook As with each year, the performance in the first half does not provide any particular indication as to what the overall performance for the year will be. The following events should be taken into account for Axway: the slowdown in licenses recorded in the second quarter; the change in demand leading to a momentum differentiating the relevant technologies; the necessary efforts to integrate Systar in order for it to achieve an appropriate level of profitability at year-end as well as the expected volume of licenses by the end of the year, which is not fully visible at present. With this in mind: -Axway confirms its outlook for positive organic growth in 2014; -The operating profit margin should be similar to that of 2013. More Information: www.axway.com ((Comments on this story may be sent to [email protected])) (c) 2014 ProQuest Information and Learning Company; All Rights Reserved. |