During the third quarter recurring revenue increased by 22%, reaching over 80% of total revenue in a quarter for the first time. The newly acquired units are making a positive contribution, while existing operations are making gradual improvements, which together contribute to a favorable trend.
In recent years, we have made successful acquisitions in Norway, Finland and Denmark, while the pace of acquisitions has been lower in Sweden. With the aspiration of establishing Vitec as the leading vertical software company in the Nordic region, this has been a natural chain of events. We are now at a stage where our presence is similar in all four countries and it is therefore time to return part of our focus to Sweden. We will increase our efforts to make acquisitions in Sweden, while striving to maintain a balance in our Nordic presence.
With the Danish procurement process for writing and reading aids for dyslexics last summer, we decided not to prioritize the hardware business. As a result, we will have a more focused software offering in the Danish business within Vitec MV moving forward, which has also been an objective. This strategy had a negative impact on total revenue for the third quarter, since in previous years hardware sales have largely occurred specifically during the third quarter. With this, we have also charged the result with SEK 4 million for restructuring costs.
Our financial position is solid and we are well prepared for future acquisitions and for continued acquisition-based growth. Supported by our acquisition of well-established companies and a high and increasing percentage of recurring revenues, Vitec will stay its course - to be a vertical software company with excellent risk diversification, as well as sustainable and profitable.
/Lars Stenlund, CEO
For more information, please contact
Patrik Fransson, Investor Relations
+46-76-942 85 97
This information is information that Vitec Software Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:30 CET on Thursday October 17, 2019.
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