PROACTIS Holdings plc the specialist Spend Control software provider, issues a trading update for the year ended 31 July 2011.
PROACTIS' strategy to increase the visibility of its revenues through the adoption of a cloud based subscription model was launched 12 months ago. In its first year, 14 deals of this nature have been signed out of the total of 30 new name deals (2010: Nil deals from 38 new deals). The Board of PROACTIS considers that the 14 subscription deals and the absolute level of 30 new name deals is toward the lower end of expected performance, reflecting an increasing level of competition and generally difficult market conditions Therefore it anticipates that the revenues of the Group for the year ended 31 July 2011 will be marginally behind market expectations. This shortfall will flow through to profitability and therefore the Group anticipates that will report revenues in the region of £6.2 million corresponding to adjusted EBITDA of approximately £0.2m.
Rod Jones, Chief Executive Officer, commented:
"The number of new name deals signed is lower than I would have expected and is a function of tougher sales conditions that we are experiencing. A number of deals have been slower to complete than initially expected and, therefore, the Group will report a marginal shortfall in revenue in the current year and will therefore have a knock on effect on the visibility for the next financial year. I am, however, convinced that the strategy is right and I look forward to being able to report better progress in due course."