16 February, 2006
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.
• 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.
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.
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