UNIT4 down in Poland

Dutch ERP software specialist UNIT4 reported an overall 4% y/y growth to €230.8m in revenue in H1 2012. However it saw a 32% fall in revenue in Poland and a 10% y/y drop in Spain, according to its 2012 interim financial results.

Net income fell to €4.9m from €7.8m in the same period of time a year ago.

And it seems that the company’s business in Poland affected its results to a large degree. First of all, UNIT4 discovered irregularities related to external partners in Polish operating company’s accounts which resulted in EBITDA and revenues being overstated, it says.

“Currently there is a risk management and legal investigation going on regarding Polish accounts” comments CEO Chris Ouwinga.

Additionally, the necessary steps have been already taken, as the company says, and that includes CEO replacement. Also, it stresses that the first of these transactions started before UNIT4 acquired Teta SA, a Poland-based software specialist.

The fall in revenue in Poland in H1 was, however, unrelated to these irregularities and caused rather by a cost of the big hardware deal with relatively little margins, it says. Spain was down due to reorganisation process and lower revenues in services.

Germany was almost flat in terms of revenue with Benelux, Sweden, Norway and UK showing a positive growth. “In the UK the majority of growth has been organic with only small acquisitions” adds Ouwinga.

The company says it saw a positive trend in SaaS & subscriptions and posted a 20% growth counting year-on-year. Product revenue for the first half of the year amounted to €36m (by 5%) with significant growth in Sweden and in the UK.

Revenues in services were down by 2.5% y/y to €76.6m as capacity in Spain was greatly reduced due to reogranisation. Also, there were some delays in license related services in Sweden and UK, it says.