Incadea PLC : Trading Update

incadea, a leading provider of enterprise software solutions and services to the global automotive dealership industry, is pleased to announce that revenues and profitability for the year ended 31 December 2013 are expected to be in line with management's expectations. Revenues grew organically by more than 20% during the year anticipating a margin on EBITDA in excess of 20% (before expensing about €0.6 million of costs associated with non organic corporate development costs).

Trading was strong during the last few months of the year, particularly in December with the new business wins, detailed below, secured during the month. Timing of the invoicing cycle, investments in these new projects and geographies, pre sales and corporate activities have resulted in the Company closing the year with a net debt position of €2.2 million.

In addition, the Company is pleased to announce that it has signed a €15 million, five year senior unsecured working capital facility with Citi to support the Company's growth plans. Together with the cash on the balance sheet, the undrawn portion of the facility will provide the necessary financial resources to deliver against the record pipeline that the Company has built up during the last few months, indicated by the announcement of the following business wins:

• International strategic partnership with major European OEM
  
  The Company has finalized an international strategic partnership with a major European car manufacturer (OEM), worth several million of Euro, over the life of the contract. Under the agreement, incadea will roll out its latest-generation software solutions to the OEM's owned and franchised dealer network across Europe.
  
• First project with a leading European premium brand car manufacturer
  
  incadea and its partner have signed a contract to roll out incadea's latest-generation software solutions to the car manufacturer's owned and franchised dealer network in Eastern Europe.  This is a significant milestone in establishing a partnership with a new premium auto manufacturer.
  
• Strengthening of position in Turkey and Middle East
  
  incadea is successfully expanding its business with its traditional customers having signed new contracts in Turkey, the Middle East and Egypt.

In addition to these signed contracts detailed above, negotiations are well advanced with two new global OEMs where the scope of work has been agreed between the parties and formal signature and launch is anticipated in the first quarter of 2014.

These new contracts and relationships fit well with the Company's strategy of diversifying from its traditional customers and geographies. They are expected to improve the risk profile of the business, increase the directly accessible installed base by 57,000 users (over the next 4-5 years) and the increased recurring revenues should improve the visibility of the Company's earnings as the contracts roll out the during the years ahead. In parallel, incadea's relationship with Microsoft has strengthened significantly, being among the top 16 global partners, out of 2,000 in the Microsoft Dynamics channel, providing the Company with the necessary support to roll out large international contracts efficiently.

In the short term, the new wins and contracts being finalized will require significant investment in customization and integration in 2014 to prepare for roll out largely from 2015 onwards. This will have a corresponding impact on the Company's profitability and cash position, depending on the scale of the roll out of the new contracts. However, the Board believes that these developments signal a material, positive shift in scale for the prospects of the company in the medium term.

David Hobley, Chairman of incadea, commented, "incadea closed 2013 in a considerably enhanced position. The final months of the year saw the signing and agreement of terms for some of the most significant contracts in the history of the Company.  These contracts position incadea as one of the leading global providers of software for the automotive industry. We are now entering a phase of significant investment. Underpinned by our Citi facilities, these new initiatives should provide us with high levels of revenue visibility for many years to come and, hence, give us great confidence about the future prospects of the Group."

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About incadea

incadea (LSE AIM: INCA) is the leading provider of enterprise software solutions and services to the global automotive retail and wholesale market. With a proven industry focus and expertise, incadea is the vendor of choice for car manufacturers and their dealer networks around the world. incadea is present in 80 countries, serving a growing community of 50,000 end users, across 2,000 dealerships of market leading OEMs. incadea was founded in 2000 and listed on the AIM market of the London Stock Exchange in 2012.

Headquartered in Germany, incadea has offices in Austria, Greece, Spain, Portugal, Russia, China, India, Taiwan, Mexico, New Zealand. The Company has a network of worldwide certified channel partners, and its range of blue chip customers include over 50 OEMs such as BMW, Toyota, Volkswagen and Mercedez Benz.