News & Events » Newsroom » 2008 » Bravura Solutions Limited half year results December 2007 EBITDA increases to $9.6 million
Bravura Solutions Limited half year results December 2007 EBITDA increases to $9.6 million
26 February 2008 Bravura Solutions Limited half year results December 2007 EBITDA increases to $9.6 million Sydney, 26 February 2008 (ASX: BVA) – Bravura Solutions Limited (Bravura) today announced a strong performance for the six month period ended 31 December 2007. Results Mr Iain Dunstan, Bravura’s Group CEO and Managing Director said Bravura’s business plan and its ongoing successful execution has been clearly demonstrated in a number of key areas. “We have delivered on our major new platform with Perpetual, which is already attracting new business interest from other financial service companies who have become more focused on cost control in the current market environment. “Our cash flows are strong, and we have had four major new client wins including an extension on the Bank of New York Mellon contract out to 2013. Bravura has demonstrated an ability to successfully integrate acquisitions, most recently with Garradin, and we are well placed to further grow the business through a blend of bolt-on acquisitions, new client wins and organic growth,” Mr Dunstan said. Operational highlights Business commentary The first half saw Bravura deliver and implement its major new back-office platform with Perpetual Limited. There has been high user satisfaction in the early months, and the successful roll-out is attracting the attention of financial services groups, who are becoming increasingly focused on cost measures, which includes reviewing back-office platform operations and seeking greater efficiencies from outsourcing applications. Bravura’s operating costs and profitability are driven primarily by headcount and there has been careful expansion of the employee base and rigorous hiring controls are in place. Progress on operating costs is reflected in the positive cash flow for the half, with cash of $16.4 million up 134 per cent on the previous corresponding period. Bravura increased its revenues by $35.9 million to $67.4 million across the three major streams of Maintenance fees, Professional services fees and Licence fees. Recurring revenue streams are a significant feature of Bravura’s business model and over 65 per cent of forecast revenues for FY08 were either contracted at the start of the period or are recurring in nature. The lower NPAT line of $1.6 million was impacted by strong acquisition growth resulting in additional amortisation of IP ($2.7 million), non-cash interest charges ($1.8 million), increased interest due to debt funding of acquisitions ($1.3 million), and an unrealised loss on an FX contract for a future earn-out payment for the Rufus acquisition ($0.9 million). Dividend The Board has maintained a dividend payout ratio of 50 per cent of NPAT consistent with previous dividends. It is the Board’s longer-term intention, however, to incrementally increase the dividend payout ratio to 70 per cent. An interim dividend for the half year ended 31 December 2007 of 0.6 cents per share will be paid to shareholders on 3 April 2008. The dividend will be fully franked. Outlook for FY2008 and beyond Mr Iain Dunstan said there were clear trends in the industry, which placed Bravura on a solid footing going forward. ‘We are seeing significant changes in the global wealth management market and an increased focus on back-office costs and the incentive to outsource. “An increasing part of many financial institutions’ revenue is being generated by their wealth management operations, and our demonstrated experience in building and delivering backoffice platforms for companies like Perpetual, holds us in very good stead for future contract wins,” Mr Dunstan said.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were $9.6 million representing an 87 per cent increase on the EBITDA of $5.2 million achieved in the corresponding six month period ended 31 December 2006. The company’s revenue grew 111 per cent on 1H07 levels to $67.6 million and Operating Cash Flows increased to $4.4 million compared to ($2.5) million in the first half of 2007.
The six months to December 2007 has been a period of focusing on delivery of our stated business strategy across Bravura’s three main geographies of Australia/New Zealand, UK/Europe, and Asia. The period was highlighted by four significant contract wins including a major UK financial institution, JPMorgan Asset Management, ABSA and the current Bank of New York Mellon contract being extended to 2013.
The company is on track to meet its FY2008 forecasts and today reconfirms its FY2008 revenue and EBITDA guidance of approximately $26 million to $29 million.
