GBST Holdings Limited (ASX code: GBT), Australia's largest provider of securities transaction technology, today announced its financial results for the half year ended 31 December 2005.
Highlights
- Earnings before interest, tax, depreciation and amortisation (EBITDA) $3.8 million, up 45% on the prior comparative period ("pcp").
- EBITDA margin improves to 31% of operating revenue, versus 24% in the pcp.
- Net profit after tax (NPAT) $2.6 million, up 50% on pcp.
- Net operating revenue $12.4 million, 12% higher than pcp.
- Acquisition of Palion broking business for $5.3 million, completed mid-December.
- New product licences from GBST Floats™, GBST Margin Lending Interface™ and a new Third Party Clearer.
Results Summary
| |
Half year to 31 December |
% increase |
2006
$'000 |
2005
$'000 |
Normalised Results* |
| Operating Revenue |
12,412 |
11,108 |
12% |
| Operating Expenditure |
(8,599) |
(8,474) |
1% |
| EBITDA |
3,813 |
2,634 |
45% |
Reported Results |
| Profit before tax |
3,704 |
1,758 |
111% |
| Income tax expense |
(1,073) |
|
|
| Profit after tax |
2,631 |
1,758 |
50% |
| Basic EPS (cents) |
5.98 |
|
|
| Diluted EPS (cents) |
5.92 |
|
|
* Comparative results for 2005 reflect normalised results under the Australian equivalents of International Financial Reporting Standards (AIFRS).
| Name of Entity |
ABN |
| GBST HOLDINGS LIMITED |
85 010 488 874 |
1. Reporting Periods
| Financial half-year ended (“current period”) |
Financial half-year ended (“previous corresponding period”) |
| 31 December 2005 |
31 December 2004 |
2. Results for announcement to the market
| $A'000 |
| Revenue from ordinary activities |
up |
9.35% to 13,175 |
| Profit/(loss) from ordinary activities after tax attributable to members |
up |
49.6% to 2,631 |
| Net profit/(loss) for the period attributable to members |
up |
49.6% to 2,631 |
| The company does not propose to pay a dividend for the financial half-year ended 31 December 2005. |
Explanatory comments on figures above:
Refer to the reviewed Financial Statements for the half-year ended 31 December 2005. |
3. NTA backing
The net assets of the company increased from $2.8 million at 31 December 2004 to $9.7 million at 31 December 2005, however NTA
backing has moved from 16.17c to 7.90c over this period.
This change in NTA backing has been significantly affected by the reorganisation of the company's capital structure prior to
listing on the ASX on 28 June 2005 and the acquisition of intangible assets in the current period from cash reserves of the company.
A normalised calculation of net tangible assets and net assets per ordinary security has been included below to aid in the understanding
of movements in assets per security during the period.
| |
Current period |
Previous corresponding period |
| Net tangible assets per ordinary security (cents) |
7.90 |
16.17 |
| Normalised net tangible assets per ordinary security (cents) |
7.90 |
6.71* |
| Normalised net assets per ordinary security (cents) |
21.97 |
6.96* |
* The normalised previous corresponding period figures are based on 39,968,000 ordinary securities, being the number of ordinary securities on issue prior to the capital raising and listing of the company in June 2005.
4. Entities over which control has been gained or lost during the period
On 15 December 2005, the company acquired the Palion business unit from OMX Technology Australia Pty Limited for a total acquisition cost of $5,348,482. Palion is the leading supplier of derivatives clearing and client accounting technology in Australia. The purchase price included net assets of $1,998,421 and goodwill of $3,350,061. The impact of the acquired business on profitability for the half-year is immaterial.
5. Dividends
The company does not propose to pay a dividend for the financial half-year ended 31 December 2005 as a number of new product initiatives and opportunities are being evaluated and there is a current absence of available franking credits.
6. Dividend reinvestment plans
Not applicable
7. Associates and joint venture entities
Not applicable
8. Foreign entities set of accounting standards used in compiling report
Not applicable
This report should be read in conjunction with the attached Financial Statements for the half-year ended 31 December 2005 which have been subject to an independent review by the company’s auditors.
David Doyle
Company Secretary
In announcing a 45% improvement in earnings before interest, tax, depreciation and amortisation (EBITDA) for the half year, CEO and Managing Director, Stephen Lake, said he was pleased with the result, which reflected the momentum established within the business and growth in new lines of revenue.
“Over the last six months we have introduced more products into broker sites, such as GBST Floats™ and GBST Margin Lending Interface™, along with the addition of Citigroup Global Custody, a significant new third party clearer.” Mr Lake said.
“We continue to see growth in license revenues from buoyant equity trading conditions which is also resulting in increased interest from our clients in funding new product and software development projects. The effect of this growth in revenue and our continued focus on cost control has been an improvement in our EBITDA margin to 31% of operating revenue.” remarked Mr Lake.
In commenting on the acquisition of the Palion broking business during the half-year Mr Lake said “GBST’s acquisition of Palion settled on 15 December and although its contribution to profitability was immaterial in the first half we expect the business to make a strong contribution to EBITDA in the second half. The integration of the business is proceeding according to plan and we have already started to see new sales across the merged client base.”
In relation to future product initiatives, Mr Lake said, “Many of our clients have expressed a strong interest in GBST WealthFront™, which is now in the final stages of development. GBST WealthFront™ will allow advisers to increase efficiencies, manage their compliance risk and provide superior service to their clients, through the provision of an advanced wealth management platform. We plan to begin rolling this out in the second half of this calendar year.”
“With strong operating cash flows, cash reserves of $3.7 million and no borrowings at 31 December, we are actively pursuing further growth opportunities as we see continuing consolidation in our sector.” he said.
The company does not propose to pay a dividend for the financial half-year to 31 December 2005 as a number of new opportunities are being evaluated and there is a current absence of available franking credits.
About GBST
GBST provides transaction processing technology for Australian and International capital market participants. GBST’s product suite also supports the broader financial services industry.
Significant investment in technology development has enabled GBST to provide a full suite of advanced market access and transaction processing solutions for its local and international client base. As one of the only global providers with the flexibility to offer multi-market, multi-currency, and multi-entity capabilities, GBST’s proven technology platform allows it to pursue growth opportunities in overseas markets, as well as those associated with changes in regulatory environments around the world.
With offices in Brisbane, Sydney, and Melbourne, GBST has over 130 staff committed to providing advanced transaction solutions.
www.gbst.com
For Further Information Contact
Stephen Lake
Managing Director/CEO
GBST Holdings Limited
Phone: + 61 7 3331 5555
Email: stephen.lake@gbst.com
Kieran Wallis
CFO
GBST Holdings Limited
Phone: + 61 7 3331 5555
Email: kieran.wallis@gbst.com
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