Financial services technology provider, GBST, has announced a growth in its net profit after tax (NPAT) of 48 per cent to $3.7 million after the first six months of the 2019 financial year.
At the same time, total revenue and other income increased by three per cent, up to $43.9 million, driven by a positive growth in licence revenue which helped to offset a four per cent decline in the service revenue segment.
However, operating earnings before interest, tax, depreciation and amortisation (EBITDA) before strategic research and development (R&D) was down significantly due to the growth in operating expenditure by $5 million compared to 1HFY18 and up $3 million compared to 2HFY18, the firm said.
“The cost increase reflects that the transformation of our software incurs a duplication of infrastructure costs during the development phase, one-off costs to expedite and reduce risks of execution in our software transformation, one-off short-term resource expense to deliver client opportunities and the increased use of cloud hosting, replacing capital expenditure,” GBST’s managing director, Robert DeDominicis, explained.
As far as the full year forecast was concerned, GBST expected revenue growth of between five to seven per cent, compared to the previous corresponding period, with the second half of 2019 being a 13-14 per cent uplift on the first half of financial year 2019, with licence revenue accounting for 70 per cent of this growth.
Additionally, operating EBIDTA before strategic R&D for the full year would be expected to hit at least $18 million due to increased revenue from work already signed and risk weighted revenue from clients near the final stages of agreement.
“We have now commenced three new major projects and as they ramp up, we will have increased services revenue and then recurring licence revenue,” DeDominicis said.
“These new projects are being delivered on our new technology architecture which reinforces the benefits from our strategic R&D program.”