SmartFocus’ SaaS move paying off

(By Philip Carnelley, 21 Jul 2009, 10.00) A period of retrenchment is paying off for SmartFocus, the marketing software company. In a trading statement today the company said that revenues for the half year would be up about 13% (ie around £5.6m) and profits would be “significantly ahead” of expectations. This is a notable turnaround from last year, when revenues fell 10%, to £10.5m, and loss before tax reached £1.2m. Part of the loss in 2008 was due to the company’s costs in moving to a SaaS model, as well as investing in winning new clients. The results now look to be feeding through: cash flow was said to be strong, and SaaS revenues are now around one-third of the total. We will be writing much more in future reports on the perils and pitfalls facing software players as they reinvent their legacy products as SaaS solutions.