Vipera PLC Prilim Results Show Continued Growth

Vipera plc

Vipera Plc (LON:VIP), the specialist provider of mobile financial software services, has today announced its preliminary audited financial results for the year ended 31 December 2017.


· Total revenue up 27% to €10.1 million (2016: €7.9 million)

· Recurring revenue up 43% to €1.6 million

· Adjusted underlying EBITDA loss, excluding non-recurring items, improved to €0.1million (2016: €1.0 million loss)

· Acquisition in Spain is profitable and expanding

· Successfully executed reorganization of Codd&Date

· Secured a strategic investment in the Company by Banca Sella Holdings who invested €2.5 million

· Continued to invest in product development

· Cash at year-end was €1.9 million (31 December 2016 €1.5million)

Marco Casartelli, CEO of Vipera plc, commented: “We took a number of significant steps forward in 2017 with continued growth, significantly reduced losses and evolving our relationship with Banca Sella. Subsequent to the year end it was announced on 18 April 2018 that Sella Open Fintech Platform S.p.A., a Banca Sella subsidiary, has made a recommended cash offer for the Company.”


Activities and business review

Vipera provides software and services that enable mobile access to personal financial services and offers multi-channel mobility solutions for a range of banking, card management, digital customer engagement and other functionality ready for deployment by financial institutions, primarily banks. We also provide consultancy services focused on the technology needs of banks and financial institutions.

In 2017 Vipera continued its growth in revenues; increasing from €7.9 million to €10.1 million. Part of the revenue growth was attributable to the acquisition of SoftTelecom Desarrollos I Mas D S.L. (“SoftTelecom”) in Spain, announced on 27 July 2017, but even without the contribution from SoftTelecom revenues would have increased by 20%, versus 16% for 2015/16. The results of the Group for the year are set out in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Financial Position.

Of the total revenue, recurring revenues increased by 43% and now comprise 16% of total revenue. Gross margins increased from 22% to 32%, in part from increased licence sales, but primarily from a larger scale of operations

A key milestone achieved in August 2017 was the successful acquisition and integration of SoftTelecom. The company, now called Vipera Iberica, is profitable and has grown rapidly since acquisition.

Your Board would, again, like to thank all of our staff and our business partners for their enthusiastic work and commitment during the year.


The Group’s core strategy is to provide and develop customised mobile solutions, operating both directly and also with local partners in key markets for distribution and system integration.

Deployments of solutions are subject to varying pricing models according to the needs of the customer, in common with normal practice in the systems solutions and payments industries.

The digital banking and payments market

The market in which we operate continues to evolve and show new opportunities. The field of digital banking and payments is demanding ever more features and functionalities as banks and their customers re-set their expectations.

The Group continues to develop its customer proposition and remains confident that it is well placed to benefit from changes in the financial services market.


We have continued to win new customers, and to provide additional products and services to existing customers. The majority of our customers are in Mainland Europe and in the Middle East and range from smaller local banks to Tier 1 institutions with millions of active users. These customers embrace both our mainstream mobile banking solutions and new innovations.


Vipera operates with a blended mix of in-house and outsourced technical staff. This has enabled us to deal with past fluctuations in demands for specific skills and to manage staff risk. As we have grown, so too have the teams of both out-sourced staff and in-house technical staff. During 2017 the in-house technical team grew by over 70% to 89 people at the year-end as we look to meet the needs of new and larger projects. We look to keep our skill sets at a leading edge – which in itself assists in recruitment.

Research and development

We have continued to invest in our product, creating enhancements and additional functionality in response to and in anticipation of trends in industry and technology, investing in the year some €635k in in-house staff and external contractors output.

At the start of the year it was determined that the Group’s intellectual property should be regarded as having two components: a core component of the Motif platform which should continue to be subject to impairment review, and an additional component that should be subject to annual amortisation. Whilst this evolution results a material annual amortisation charge, it is felt to appropriately reflect the business evolution.


During the year we successfully executed on a planned restructuring of our subsidiary, Codd&Date so as to spin out a part of its operations into a new wholly-owned subsidiary of Vipera, and the Company increased its holding in Codd&Date srl to 81% (2016: 51%).

We believe this has improved the effectiveness of the Codd&Date staff.


In August we completed the acquisition of SoftTelecom for a total consideration of €1.3 million. This acquisition enabled us to access to the Spanish market more effectively with an established local presence and provided an enhanced team of technical staff. Since acquisition the company has expanded and operated profitably.


Vipera has several customers in the Middle East. A new subsidiary has been formed in Dubai with the intention that having a local presence and a wider team based permanently there will enable us to serve those customers, and prospect new customers, better.


During the year, we secured a strategic investment in the company by Banca Sella Holdings (“Banca Sella”) who invested €2.5 million. As well as being a customer, we regard Banca Sella, a leader in the Italian market in adopting new technologies, as a partner in developing new product concepts. The subscribed capital has been deployed to the acquisition of SoftTelecom and to provide additional working capital.

Financial review and key performance indicators

The Board considers that Group sales and the financial position for the year continue to be the key performance indicators of Vipera and these are set out in the Consolidated Statement of Comprehensive Income. Further strengthening our relationships with partners and with long standing customers continues to have a significantly positive impact on our increasing sales.

The adjusted underlying EBITDA, excluding non-recurring items improved substantially; from a €998,000 loss in 2016 to a €99,000 loss in 2017. This reflects, inter alia, €250,000 of transaction costs incurred in relation to the acquisition of SoftTelecom, additional costs incurred in relation to the set up of a new subsidiary in Dubai to meet growing demand in the area and foreign exchange movements. In addition, operating profit was impacted by an evolution in the Group’s depreciation policy to depreciate capitalised intellectual property, absorbing a charge of €260,000 versus €39,000 impairment for 2016.

The Group loss before tax narrowed to €0.9 million for the year ended 31 December 2017 (2016: loss of €1.5 million); the loss per share was 0.38c (2016: 0.62c).

Cash as at 31 December 2017 was €1.9 million, which will allow for continued investment in product development and will support the working capital needs of the Group.

Risk management

The Group is exposed to a number of business risks. The risk appetite of the Group is determined by the Board which is responsible for identifying and evaluating the key risk areas of the business and ensuring that those risks can be managed at a level acceptable to the Board.

The Board has identified the following as the key risks:

· Technology

The business is highly dependent on its key software in providing its mobile banking solutions. Its own and competitive technology is always subject to evolution. The Group is constantly investing in its product offering and looking to address new additional needs of customers.

· Customer relationships

The Group is reliant upon key contracts with large financial institutions and other organisations. The Group has expanded its customer relationships and sales channels, in part, to mitigate this risk.

· Key staff

Staff are a key asset in the business and retaining the services of key staff is essential to ongoing revenue generation and development of the business. All the Directors during 2017 are shareholders in the business with longstanding commitment to its prosperity. In attracting and retaining staff, the Board seeks to have a remuneration structure that takes into account what is affordable, and what market rates are. Just as importantly, it seeks to create an environment of interesting work in a cordial but professional setting.

· Liquidity

Adequate working capital is a core requirement of the Group. The Group currently has cash balances and no long-term borrowings. Cash forecasts identifying the future liquidity requirements of the Group are produced on a regular basis. The Board seeks to strike the right balance between investing to grow the business rapidly, and the prudence of conserving cash. In assessing this balance, the board has regard to operational liquidity, and to the long-term solvency of the business.

Going concern

The Board keeps Group budgets and updated projections under regular review. As part of its assessment of the risks, and opportunities, facing the Group, the board keeps under review the longer-term capital requirements, the business model and customer proposition as these evolve in a fast moving technology environment over the foreseeable future.

Future developments

In October 2017, Vipera was been awarded Platinum status by Mastercard for its Digital Wallet and ranked among the five platinum vendors on Mastercard Engage global digital wallet vendor list. In March 2018 the launch of SME Pay was announced in collaboration with Mastercard, a solution which addresses the real needs of Small Business customers in controlling their card spend and receiving payments on the go.

SME Pay is built atop Motif and delivered as Cloud offering potentially available to any SME customer of banks working with Mastercard.

The evolution of banking services and payments continues, to our advantage, as consumers and businesses have become more accepting, and indeed more expecting, of their digital relationship with financial service providers. Within the EU, regulatory changes in the form of the Second Payment Services Directive reinforce this trend and we believe we are well placed to provide new services to banks and other service providers with products and services based on our Motif platform.

Cloud and SaaS solutions are one of the key drivers of future development of Vipera.

Outlook for the coming year

We have started 2018 with a significant backlog of business from a wide range of customers and the new SaaS offering with Mastercard. We therefore look to further substantial progress in the year.

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