Publishing Technology plc, the AIM quoted, leading provider of content systems, audience development and content delivery software and services to international publishers, information providers and academic institutions, announces that as a result of delayed completion of some very large and complex new product projects and additional research and development initiatives it expects its results for the year ending 31 December 2013 to be below market expectations and similar to the prior year.
Research and development expenditure, which has been running at around £3m per annum in each of the last few years, is written off in the period in which it is incurred leaving no capitalised development expenditure to impact future profits. The expected reduction in research and development expenditure in 2013 has been delayed as the Group brought forward some future planned investments, a significant one being the incorporation of HTML5, the now globally accepted web delivery standard. Undertaking this work removes one of the main obstacles to advance namely delivery for Apple Mac users who are widespread in publishing, increases cloud based options for advance, and allows the Company to provide “responsive design” (one web site any device) solutions for our online platforms,
This additional expenditure and the knock on effect on revenue and profits in 2013 does not impact the Group’s strategy or its expectations for 2014. The outlook for 2014 remains a steady improvement in recurring revenue from new products and services, and a decline in the rate of investment in research and development.
Recurring revenues in 2014 are expected to be boosted from the current implementations and recent and upcoming go lives in both pub2web and advance divisions.
Within the advance division, major implementations are on-going with HarperCollins, Egmont, Rosen, Thieme and Turpin. Both Rosen and Thieme are implementing the entire advance suite and having deployed the first two modules, both are due to go live on the final ‘order to cash’ (OtC) component early in 2014. As well as undertaking ongoing work, the Group is in discussions to significantly expand the advance system for an existing advance customer and there is a healthy pipeline of major new opportunities.
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