‹ Back to Article Listings

StepStone ASA, Admission to the Official List of the London Stock Exchange

Application has been made to the UK Listing Authority for the ordinary shares of StepStone ASA (the "Shares") to be admitted to a secondary listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange's Main Market for listed securities (the "Secondary Listing").

StepStone ASA (the "Company") is a leading global provider of human capital management software and services, listed on the Oslo Børs in Norway since 2000.

Application has been made to the UK Listing Authority for the ordinary shares of StepStone ASA (the "Shares") to be admitted to a secondary listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange's Main Market for listed securities (the "Secondary Listing").

It is expected that Admission will become effective and that dealings in the Shares will commence at 8.00 a.m. on Tuesday 11 November 2008. Shares will be tradable in London via Depositary Interests under the symbol STPS.L. Under the FTSE classification the Company will be in the Software 9537 sub-sector. The Company is classified in 45101010 – Internet Software & Services on the Oslo Børs.

In light of the Company’s growth, increasingly international operations and significant presence in the United Kingdom, the Directors believe it is now appropriate to seek a secondary listing on the Official List of the UKLA and admission to trading on the London Stock Exchange, as one of the world’s largest capital markets. The Company anticipates that the Secondary Listing will provide access to a wider group of potential investors.

Commenting on the Admission, CEO Colin Tenwick said: “StepStone has rapidly developed into a leading international provider of software and services for the Human Capital Management (“HCM”) sector. A growing number of organisations, currently over 16,000, including many of the world’s leading businesses, use StepStone’s software and services to gain competitive advantage through the attraction, retention and development of talent.

These products and services are hosted by StepStone and delivered on-demand through the internet so they are easy and cost effective to utilise, maintain and upgrade. Now is an appropriate time to access a broader range of international investors through a secondary listing on the London Stock Exchange.”

Panmure Gordon (UK) Limited is the Introducer, Financial Adviser and Broker to the Admission.

In accordance with PR1.2.3(8) of the Prospectus Rules, a Summary Note in English has been prepared in conjunction with the Admission, copies of which will be available following Admission at the Company’s offices in the UK and in Norway, and at the London office of Panmure Gordon (UK) Limited, during office hours and also electronically via the Company’s website, www.stepstone.com.

Enquiries:

StepStone Tel: +44 (0) 1483 739450
Colin Tenwick, Chief Executive Officer
Ian Cole, Chief Financial Officer

Panmure Gordon Tel: +44 (0)20 7459 3600
Richard Gray/ Aubrey Powell / Callum Stewart

Hudson Sandler Tel: +44 (0)20 7796 4133
Andrew Hayes / Wendy Baker

For more information see: www.stepstone.com

 

BUSINESS OVERVIEW

StepStone has two principal operating units: StepStone Online, which provides software and services that drive some of Europe’s largest online talent communities connecting employers with potential employees, and StepStone Solutions, which provides hosted software and services for human capital management. In the first nine months of 2008, StepStone Online contributed approximately 59% of group revenue and StepStone Solutions approximately 41%. As at 30 September 2008, the StepStone Group employed 928 full time staff.

In the year ended 31 December 2007, the Company generated a net profit of €8.7 million from revenue of €98.5 million and a net profit of €8.9 million from revenue of €92.5 million from the first nine months of 2008. StepStone generated €15.8 million of operating cashflow in the year ended 31 December 2007 and €17.0 million in the nine months ended 30 September 2008.

 

KEY STRENGTHS

The Directors believe that the key strengths of StepStone include the following:

  • Geographic diversity: StepStone has operations in 17 countries and can provide services in many additional locations via its distributors and partners; the Directors consider that this enhances the appeal of the offer to multinational clients and reduces the exposure to localised market downturns in customer activity while also allowing the business to focus its efforts on markets with attractive conditions;
  • Dual business model: StepStone sells its software and services under two different business models which the company believes diversifies shareholder risk. StepStone Online products and services are sold primarily under a volume based model whilst StepStone Solutions products and services are sold primarily under a fixed fee model;
  • Large customer base across multiple sectors: with over 16,000 clients, StepStone has a diversified revenue profile as well as significant expertise in many sectors to allow it to regularly enhance its customer offering;
  • Strong, established management team: StepStone’s executive management and board have considerable expertise in software and services, online technology including recruitment, talent management and wider industry experience, including extensive international experience and the appraisal of risk in growing businesses and cost management;
  • Recurring revenue model and high customer satisfaction: StepStone has experienced a very low rate of cancellations (less than 1% per quarter) for its StepStone Solutions subscriptions. Within the StepStone Online business there is also a high level of repeat business, with approximately three quarters (by value) of customers in 2006 and 2007 renewing their contracts in the following year. The Directors believe these features reflect the Company’s strong customer proposition and high levels of customer satisfaction;
  • Increasing profitability and cash flow generation: StepStone’s current management team and business model has delivered growing profits and consistently generated positive operating cash flow over the past 12 quarter year periods;
  • Strong balance sheet: with cash and bank deposits of €23.7 million and €30 million in available unsecured debt facilities as at 30 September 2008, the Directors consider the current financial needs of the business to be well funded;
  • Proprietary technology and intellectual property: the Company has invested significant man years in the internal development of technology used in its customer offers, and in protecting its intellectual property rights; and
  • Internationally recognised brand: since 2000 the Company's name has been closely associated with online recruitment technology and since 2003 with HCM software and solutions in Europe and the Company is well regarded in this market.

STEPSTONE ONLINE

StepStone Online provides the software and services that drive some of Europe’s largest online talent communities, connecting employers with potential employees. StepStone operates online sites in 13 European countries: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden and Switzerland.

Customers using these sites are primarily businesses operating in the relevant country, although a number of customers purchase service access for multiple sites operated by StepStone in different countries.

StepStone Online generates revenue by providing technology-enabled services to recruiters; services to candidates are provided free of charge. StepStone’s technology allows the customer to manage their own recruitment activities online. Depending on the customer’s recruitment objectives, needs and budget, StepStone provides the customer with access to internet hosted services. These services enable the customer to then undertake:

  • Job Listings: Customers are able to display their job vacancies on one or more StepStone operated sites.
  • Database searches: Recruiters are able to purchase the right to access the extensive StepStone CV database, subject to applicable data protection laws.
  • Reach and Image promotion: StepStone’s products and services offer a variety of methods designed to enhance the reach of recruiters and increase the response rates to advertised positions. These include:
    • Banners: a variety of banners are available and can be linked to a job offer, to an overview of the recruiter’s listings and to its company presentation or website
    • E-mail add-ons: recruiters can insert specific job details into the targeted daily and weekly job alerts sent to candidates by email agents
    • Newsletter alerts: recruiters can place job details into the StepStone
      newsletter
    • Company presentation: the prospective employer’s presentation can be made available online
    • Boost service: the display of banners on a network of sites increase traffic to a listing

The services are normally sold as bundled packages, priced according to the expected usage levels of the customer.

For the nine months to 30 September 2008, StepStone Online delivered revenue of €54.9 million, 32.6% higher than the same period in 2007, with a 28.7% underlying organic growth rate. StepStone Online delivered EBITDA of €17.7 million in the nine months to 30 September 2008 compared to €11.5 million in same period in 2007, with an EBITDA margin of 32.2% up from 27.8% in the nine months to 30 September 2007.

 

STEPSTONE SOLUTIONS

StepStone Solutions provides software and services for human capital management. These hosted software and services are available to customers via the internet under a fully supported subscription-based business model commonly described as "software as a service”. The countries in which StepStone operates through a directly employed local sales organisation are: Australia, Austria, Belgium, China, Denmark, France, Germany, Italy, Netherlands, Norway, Singapore, Sweden, Switzerland, United Kingdom and United States. The markets in which StepStone competes through indirect sales organisations include Dubai, Hungary, Jordan, Russia and Spain.

StepStone recognised that the market and customer demands were rapidly evolving and, as part of its strategy to offer a range of products and establish clear European market leadership, acquired EasyCruit AS in November 2004, i-GRasp Limited in July 2005 and ExecuTRACK in January 2007.

EasyCruit AS owned EasyCruit HR, a product aimed at less complex e-recruitment requirements. Core OneStep functionality was subsequently incorporated into Easycruit HR to create EasyCruit. I-GRasp Limited owned i-GRasp, a product aimed at more complex erecruitment requirements, which replaced the third party product. ExecuTRACK owned ETWeb, a market-leading strategic talent management product that includes training, career and succession planning, performance management and other functionality.

Customers acquire use of i-GRasp or EasyCruit via a hosted subscription model. StepStone hosts the relevant platform at its secure third party data centres and grants customers access to the products via internet browser. Customers enter into contractual arrangements with StepStone which typically have rolling 90 day notice periods, although some customers require significantly longer notice periods. The longest EasyCruit contract is a three year contract and the longest i-GRasp contract is a five year contract where the customer has an option to renew for a further four years.

Customers acquire use of ETWeb either through the hosted subscription model described above or alternately via a monthly subscription model or a perpetual licence model which the customer hosts in either case.

 

Current Trading and Prospects

For the nine months to 30 September 2008, StepStone Solutions delivered revenue of €37.6 million, 31.9% higher than the same period in 2007, with a 29.1% underlying organic growth rate. StepStone Solutions’ EBITDA was €5.1 million in the nine months to 30 September 2008 compared to €3.8 million in same period in 2007, with an EBITDA margin of 13.6% compared to 13.4% for nine months to 30 September 2007.

In their third quarter report the Board stated "StepStone has a portfolio of software products and services delivered to a wide geographic base of customers. Our business is well financed and growing - third quarter revenue growth was 25%.

The final quarter of the year is traditionally the Company's strongest, and there is no reason at present to indicate any change to this fourth quarter trend.

However, after the unprecedented economic turmoil of the last three months, economic conditions are tightening across Europe which is in turn impacting customer confidence.

The Directors’ expectation is that overall growth will continue to soften into 2009. In anticipation, the Company will continue to closely manage its cost base and cash generation.

The Board looks forward to reporting further year on year growth in the final quarter of 2008."

 

MANAGEMENT

The group executive management consists of: Colin Tenwick, Chief Executive Officer; Ian Cole, Chief Financial Officer; Ralf Baumann, Group Managing Director, Online; Matthew Parker, Group Managing Director, Solutions; Andreas Hoynigg, Group Managing Director, International and Jo Goossens, Group Managing Director, Corporate & Business Development.

Colin Tenwick (48)
Colin Tenwick was elected to the Board on 20 November 2001. He has been Chief Executive Officer in StepStone ASA since November 2001.

He joined StepStone ASA from the position as Vice President and General Manager of Red Hat Europe, which he held from May 1999. From 1994 to 1999, Mr. Tenwick held various senior positions with Sybase Corporation, including Vice President of European Marketing and Vice President and General Manager of European Operations. Mr. Tenwick graduated from the University of Brighton with a Business Degree.

Mr Tenwick has previously served on the Board of RedHat (UK) Limited and various RedHat subsidiaries.

Ian Cole (46)
Ian Cole joined StepStone ASA as Chief Financial Officer in November 2001. Prior to joining he was Professional Services and Finance Director, Red Hat Europe. From 1997 to 1999 Mr. Cole held finance directorships with Sybase Europe.. Between 1995 and 1997 he was Financial Controller at NYNEX CableComs and earlier spent 9 years with Coopers & Lybrand.

Mr Cole has previously served on the Board of RedHat (UK) Limited and various RedHat subsidiaries.

Ralf Baumann (52)
Ralf Baumann joined StepStone ASA in July 2002 as Managing Director of StepStone Germany. From October 2005, his responsibilities grew to include overall management responsibility for StepStone Online across all its markets, covering sales, marketing and customer services.

Ralf Baumann has extensive experience in HR services and personnel administration software, as well as the sales and marketing of enterprise software solutions. Immediately prior to joining Step-Stone, Ralf worked as sales, marketing and alliances director at PeopleSoft GmbH. Before that he held executive positions at a number of major software companies, including Siebel Systems, SAP and SSA.

Matthew Parker (41)
Matthew Parker joined StepStone ASA in July 2003 with over 15 years experience in IT sales and general management. Immediately prior to joining StepStone ASA, Matthew worked at e-recruitment specialist i-GRasp, where he carried European sales management responsibilities, as well as leading the Company’s partner program.

In his earlier career, Matthew spent several years in sales and general management roles at Copysprint, TNT and Canon.

Andreas Hoynigg (47)
Formerly Vice President and General Manager Europe of Best! Software, Dr. Andreas Hoynigg joined ExecuTRACK in October 2001 and then StepStone ASA as part of the acquisition of ExecuTRACK in January 2007. Previously he was with HR Software, EFS Consulting Group, and BCG.

His background includes 17 years of experience in the human resources software industry. Dr. Hoynigg received a Doctor degree of Law from the University in Vienna, Austria.

Jo Goossens (46)
Jo Goossens is Group Managing Director, Corporate and Business Development. He is responsible for a range of new business initiatives including strategic partnerships, acquisitions and evaluation of new market opportunities. Prior to this role, Jo served as Managing Director Online Recruitment, having previously managed StepStone's Northern Region. He was a founder of StepStone Belgium in February 2000.

 

RATIONALE FOR THE SECONDARY LISTING

In March 2000, StepStone ASA completed an initial public offering that raised €232 million and its shares were listed on the Oslo Børs and the London Stock Exchange. Following the large losses sustained during 2001, the new management downsized the business and withdrew from the United Kingdom and a number of other countries and consequently cancelled the Company’s listing on the Main Market of the London Stock Exchange in December 2001.

StepStone ASA re-established a small operational base in the United Kingdom in 2003 and expanded this in July 2005 with the acquisition of i-GRasp Limited. Since 2003, StepStone’s financial position has consistently strengthened and in 2007, revenue exceeded €98 million. This compares to €18 million in 2003 and reflects both market growth and the rapid scaling of the Company’s operations. At the same time, the Company continued to improve its profitability and cash generation abilities. StepStone’s current strategy is to expand its customer base, including by selective acquisition, and to enhance its product offerings whilst retaining its focus on cash generation, controlling costs and improving profitability.

In light of the Company’s progress and growth and its increasingly international footprint, combined with the Company’s significant presence in the United Kingdom, the Directors believe it is now appropriate to seek a secondary listing on the Official List of the UKLA and to trading on the London Stock Exchange as one of the world’s largest capital markets.

 

DEPOSITORY INTEREST ARRANGEMENTS

With effect from Admission, CREST members will be able to hold and transfer interests in the Share within CREST (a computerised system for the paperless settlement of sales and purchases of securities, which is the UK equivalent of VPS in Norway), pursuant to a depository interest arrangement established by the Company ("Depository Interests") with Capita IRG (Trustees) Limited ("Capita"). Capita will issue Depository Interests (which will be admitted to CREST) in respect of the underlying Shares (which will not be admitted to CREST). The Depository Interests will be independent securities constituted under English law which may be held and transferred through the CREST system. Depository Interests will have the same security code (ISIN) as the underlying Shares and will not require a separate quotation on the Main Market of the London Stock Exchange. The Depository Interests will be created and issued pursuant to a deed poll entered into by Capita. Shareholders may, should they wish to do so, hold Shares in certificated form and Shareholders wishing to do so should contact the Company’s registrars, Capita.

Holders of Depository Interests wishing to exercise any administrative rights attached to the underlying Shares (such as the right to attend and vote at meetings of the Company's shareholders ("Shareholders")), must seek a registration for voting purposes in the register of Shareholders (which is operated through VPS, Norway’s paperless centralised share registry) prior to the relevant Shareholders' meeting. Prior to any general meeting, holders of Depository Interests will be contacted by Capita (by way of an OPS Bulletin) to notify them of the general meeting and invite them to seek such a registration, in order to enable them to attend and vote at the relevant meeting. By seeking registrations for voting purposes, holders of Depository Interests will need to agree to place their holdings of Depository Interests into escrow (thereby delaying settlement of any trades in respect of the Depository Interests put into escrow) from the deadline for receipt of instructions (at which point the instructions received will be reconciled against the register of Depository Interests) until the record date for the general meeting, which is anticipated to be a period of 2 business days. Each holder of Depository Interests will need to comply with the instructions sent by the Company or Capita.

More detailed information regarding the Depository Interest arrangements will be sent to all Shareholders prior to the next annual general meeting of the Company. Information on the Depositary Interests is also contained in the Summary Note available on the Company’s website from Admission.

 

APPLICATION OF THE LISTING RULES AND CORPORATE GOVERNANCE

Application has been made for the Secondary Listing pursuant to Chapter 14 of the Listing Rules (made by the UK Listing Authority for the purposes of Part VI of the Financial Services and Markets Act 2000), which sets out the requirements for secondary listings.

The Company intends to comply with the Listing Principles set out in Chapter 7 of the Listing Rules which would otherwise apply to the Company if it were to obtain a "primary listing" on the Official List. The purpose of the Listing Principles is to ensure that issuers pay due regard to the fundamental role they play in maintaining market confidence and ensuring fair and orderly markets. They are designed to assist listed companies in identifying their obligations and responsibilities under the Listing Rules. The Company is not, however, subject to such Listing Principles and will not be required to comply with them. Further information regarding the applicability of the Listing Rules to the Company can be found in the Summary Note.

StepStone ASA complies with the Norwegian Code of Practice for Corporate Governance (the "Norwegian Code") but, as a Norwegian company, is not required to comply with the United Kingdom's Combined Code on Corporate Governance (the "Combined Code"). Although the Norwegian Code and the Combined Code have the same general objectives and give similar recommendations in respect of most issues, there are certain differences between the two, some of which result from the Norwegian Code’s lack of distinction between executive and non-executive directors. With regard to independence, the recommendations of the Norwegian Code are similar to those of the Combined Code, although the criteria for establishing independence under the Norwegian Code are potentially more onerous than those of the Combined Code. The Combined Code gives somewhat more extensive recommendations regarding publication of guidelines and contact with shareholders than the Norwegian Code. In addition, the Norwegian Code contains certain recommendations that are not reflected in the Combined Code, such as a recommendation that companies should not obstruct takeover bids. Although the Company is not required to comply with the Combined Code, it intends to do so, to the extent that the recommendations of the Combined Code are not in conflict with those of the Norwegian Code or with Norwegian law. This compliance is on a voluntary basis and the FSA will not have authority to monitor this voluntary compliance or impose sanctions.

 

IMPORTANT NOTICE

Panmure Gordon is acting exclusively for StepStone ASA and no one else in connection with the Secondary Listing and will not be responsible to anyone other than StepStone ASA for providing the protections afforded to clients of Panmure Gordon or for providing advice in relation to the Secondary Listing or any matter or arrangement referred to in this announcement.

The distribution of this announcement in jurisdictions other than the United Kingdom and Norway may be restricted by the laws of those jurisdictions and therefore persons into whose possession this announcement and all other documents relating to the proposed Secondary Listing should inform themselves of and observe such restrictions.

This announcement does not constitute an offer to sell or the solicitation of an offer to acquire the Shares in any jurisdiction in which such an offer or solicitation is unlawful. None of the Shares have been, or will be, registered under the United States Security Act of 1933 (as amended), or under the securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States or of any province or territory of Canada, Australia, the Republic of South Africa or Japan. Subject to certain exceptions, the Shares may not, directly or indirectly, be offered, sold, taken up or delivered in, into or from the United States, Canada, Australia, the Republic of South Africa or Japan or to or for the account or benefit of any national, resident or citizen of the United States, or any person resident in Canada, Australia, the Republic of South Africa or Japan. This announcement does not constitute an offer to sell or a solicitation of an offer to sell or a solicitation of an offer to purchase or subscribe for Shares in any jurisdiction in which such offer or solicitation is unlawful or would impose any unfulfilled registration, publication or approval requirements on StepStone ASA or Panmure Gordon.

Certain statements contained in this announcement are or may constitute "forward-looking statements". Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company or the Group, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, among others: general economic and business conditions, particularly in the United Kingdom, changes in technology, government policy and ability to attract and retain personnel. These forward-looking statements speak only as at the date of this announcement. Except as required by the Financial Services Authority, the London Stock Exchange or by law or by any appropriate regulatory body, StepStone ASA expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's or Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Investors should not rely on the information set out in this announcement but should refer to the Summary Note to be issued by the Company. The Summary Note should be read as an update to the prospectus issued by the Company on 20 November 2006. Investors should read the whole of the prospectus and not rely solely on the information contained in the Summary Note when deciding whether or not to make an investment in StepStone ASA.

‹ Back to Article Listings