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GBST EBITDA up 89 per cent – strong result underpins first dividend

GBST Holdings Limited (ASX:GBT), Australia’s leading provider of securities transaction technology, today announced its results for the year ended 30 June 2006.

  • Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 89 per cent to $9.0 million (FY2005: $4.8 million).
  • Profit after tax of $6.1 million, up 44% on prior comparative period (“pcp”) for the year to 30 June 2006.
  • Operating margins continued to grow, with EBITDA margins increasing to 33.7 per cent of operating revenue (FY2005: 21.5 per cent).
  • Net operating revenue was $26.7 million, up 21 per cent (FY2005: $22.2 million), including $1.3 million from Palion since December 2005.
  • Maiden listed dividend of 4.0 cents per share fully franked.

 

Results Summary

 

Results Summary for FY2006
($000)
FY2005 *
($000)
%
Increase
Net Operating Revenue 26,721 22,166 21%
EBITDA (Earnings before interest, tax, depreciation and amortisation) 9,025 4,773 89%
Profit before tax 8,628 3,540 144%
Profit after tax 6,136 4,260 44%
Earnings per share – adjusted basic (cents) 13.96 9.26 51%
Earnings per share – diluted (cents) 13.77
Final dividend per share (cents – fully franked) 4.0

* For the purposes of comparison, reported 2005 figures have been adjusted according to the Australian equivalent of IFRS.

GBST CEO and Managing Director Mr Stephen Lake said: “This strong result demonstrates the success of our strategy to develop recurring licence revenue from  proven, reliable financial transaction solutions, underpinned in 2006 by increased domestic quity trading volumes.

“The Palion derivatives business, acquired in December, is now fully integrated and has been a strong contributor. We have maintained costs across the group while winning new clients, broadening our range of solutions and strengthening management.

“GBST’s balance sheet continued to strengthen and we improved cash reserves to $10.6 million at 30 June. The company has no debt.”

 

Operations

GBST strengthened its product range during the year with the release of GBST Floats™ and GBST Margin Lending Interface™. The acquisition of Palion also added DCA™, the leading client accounting system for options trading in Australia, the TOMS™ order management system and the RMS™ risk management system to our range. Development of GBST WealthFront™ has been delayed, as work by a third party has not met our strict quality standards, and we are currently reviewing the most effective way to complete the product.

The GBST Shares™ platform now used by 44 stockbrokers and has a 55 per cent market share; while 22 stockbrokers use DCA™, representing more than 50 per cent of the equity options market. GBST’s client network now extends to 55 brokers, up from 41 last year.

New clients included the Citigroup Custody and UBS third party clearing service businesses, as well as 11 new broker clients using Palion products. Approximately 40 per cent of ASX equity trading volume was processed by GBST clients, up from 34 per cent last year.

Strong equity market trading increased demand for consulting and software customisation, revenue of $2 million from consulting and software development was up $1.2 million compared with the previous year. GBST has a strong pipeline of software development projects and continues to focus on product research and development, expensing $3.3 million for research and development in FY2006 (FY2005: $3.0 million).

 

Outlook

Stephen Lake said, “GBST will continue to expand through introducing new or enhanced products that secure additional recurring revenue.”

“We anticipate that industry consolidation will bring acquisition opportunities, and will continue to focus on businesses that have synergies with GBST’s culture, business model and client base both in Australia and overseas. These opportunities warrant maintaining our current cash reserves.”

 

Final Report

Analyst Briefing Results 2006 (PDF 818 kb)

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