QPR Software announced on February 16th their unaudited accounts for 2011. The highlights are:
- Net sales showing 8.7% growth of 2010
- Operating profit growth of 0.4% over 2010
- Operating profit margin of 10.0% of consolidated sales
- Net sales growth for the final quarter of October - December 2011 of 15.4%
Net sales and operating profit showed a positive development towards the end of the year. Quarterly net sales were highest in the fourth quarter which led operating margin to reach 12.1%. Despite the growth in net sales, the company's operating profit was on the same level as last year, which was mainly due to increase in personnel costs and outlays in development of the new software product, QPR ProcessAnalyzer.
Net sales in Finland grew 29.5% in 2011 due to good development in software sales and professional service business, as well as consolidation of Nobultec Ltd into QPR Software Group as of 1 August 2011. The growth in operating profit in Business Operations Finland was also strong. The majority of new software sales in Finland were subscription sales.
The Group's international net sales in 2011 decreased 5.9%, which was mainly due to a decrease in software license sales. This, in turn, was partly influenced by gradual initiation of subscription based software sales in QPR's international sales channel. This has a negative impact on revenue recognition from the new contracts, but on the other hand will provide a steady increase in net sales in the future.
QPR Software estimates the consolidated net sales for 2012 to show significantly faster growth than in the previous year (growth in year 2011: 8.7%) and operating profit to remain on the same level as in the previous year, or to improve slightly. The company expects significant growth especially in software subscription net sales, SAP consulting, process analysis business and enterprise architecture services sales.
In 2012, QPR aims to place significant investments in the development of its new software product, QPR ProcessAnalyzer, and related services. QPR aims at strong international software sales growth and significant market share in this new category.
Market forecasts published in the beginning of 2012 estimate that the value of global software sales will increase approximately 6% and global professional services sales will increase approximately 3% in 2012 compared to 2011.
The company estimates that software subscription net sales, SAP consulting net sales, process analysis net sales and enterprise architecture service net sales to grow significantly from the previous year.
In 2012, QPR aims to place significant investments in the development of its new software product QPR ProcessAnalyzer and related services. This will, in short term, have a negative impact on profitability. The company believes that these outlays are well justified, since the QPR ProcessAnalyzer business, launched in February 2011, has started well and the leading market analysts are forecasting strong demand growth for process analysis products and services. QPR aims at strong international software sales growth and significant market share in this new category.
The company also aims to recruit new channel partners especially for its QPR ProcessAnalyzer and QPR EnterpriseArchitect software products and to develop replicable solutions for its present channel partners.
This is a very positive report from a software company based in Europe, considering the double dip recession that the continent has and is going through. The outlook for 2012 shows that QPR have identified a niche market which is currently unexploited by many of the large BPMS vendors and, with a year of experience in the field, are setting out to exploit that advantage. At the same time, for their international sales they will be reliant on how well their partners are able to step up to take advantage of the ABPD market. It will be interesting to watch and see, but I applaud the plan.