AIM-listed ‘spend control’ software provider Proactis has seen a quicker than expected uptake of its transactional priced cloud-based solutions and its financial results bear the scars of the change in business model. Its interim results for the six months to January 31 reveal a 13% drop in revenue to £3.0m and an operating loss of £208k (2010: £384k profit). This change in fortunes reflects the transition to the Cloud and away from perpetual licences. The detail behind the top line figures shows annualised revenues, including transactional priced deals, increased to £4.3m (2010: £3.4m); deferred revenue doubled to £1.2m; and deal activity remained fairly buoyant with 5 new customers for its cloud solutions. The timing of new customer wins has also been an issue though with some weakness in the UK public sector.
In the short term, we can expect Proactis to continue to feel the financial pain of the transition to a cloud-based model - it really is the only way to go though! That said the second half looks to have started well. It’s particularly encouraging to see Proactis has signed a couple of new local authority customers – perhaps the public sector is now ready to address spend control?