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Ann: HALFYR: FIN: Finzsoft Solutions Amended 30 Sept 2015 Half Year Report

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    • Release Date: 02/12/15 08:57
    • Summary: HALFYR: FIN: Finzsoft Solutions Amended 30 Sept 2015 Half Year Report
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    					FIN
    02/12/2015 08:57
    HALFYR
    PRICE SENSITIVE
    REL: 0857 HRS Finzsoft Solutions Limited
    
    HALFYR: FIN: Finzsoft Solutions Amended 30 Sept 2015 Half Year Report
    
    Finzsoft Solutions Limited (NZX:FIN) Reports Interim Financial Results for
    Half Year Ended 30 September 2015
    
    Finzsoft Solutions Limited wishes to advise, that Note 3 to the Financial
    Statements regarding Segment Information within the announcement for NZX
    titled "30th September 2015 Half Year Report", requires a correction. The
    first two lines of the note should read:
    Segment revenue from external customers: New Zealand $4,963 (previously
    $8,112) and Australia $5,982 (previously $2,833).
    Adjusted EBITDA: New Zealand $1,255 (previously $4,345) and Rest of the World
    -$3 (previously -$3,093).
    
    The correction has not required Finzsoft to make an adjustment to any of its
    financial statements, total revenue, director's statement, or any other
    performance measures.
    
    This announcement serves as a correction and a revised half year report is
    attached.
    
    CONTINUED YEAR-ON-YEAR GROWTH & CONTINUED STRONG MOMENTUM LEVERAGING
    OPPORTUNITIES IN ASEAN POST TAKEOVER
    
    Finzsoft is pleased to announce its performance highlights for Half Year
    Ended 30 September 2015:
    o Record six month operating revenue result of $11 million, an increase of
    $3.1 million (39.4%) from $7.9m million at 30 September 2014.
    o Compound Annual growth for the corresponding period of 22.1% operating
    revenue over five years.
    o Strong and continued customer base with supporting underlying recurring
    licence and services revenue.
    o Current Market capitalisation of nearly 200 percent higher than at the end
    of the corresponding period last year, and over 700 percent higher than at
    the end of the corresponding period in 2013.
    o Strong EBITDA result of $0.9 million notwithstanding continued material
    investment in R&D and marketing. First period revenue and EBITDA also
    impacted by time deferred intercompany sales, now to be completed in the
    second six-month period.
    o Continued profitability, no debt and positive cash flow.
    o Net profit after tax has reduced to $0.147 million, down from ($2.023
    million) for the same period last year, largely due to full period inclusion
    of Sush (together with increased base costs), as well as investment in and
    operational losses incurred by the Sush Mobile subsidiary.
    o Andrew Holliday has confirmed his intention to re-contract as Managing
    Director. This reappointment has the full support of the Finzsoft and
    Silverlake Axis Boards for Mr Holliday's continued role for at least the next
    for five years.
    o Continued material investment in sales and marketing to continue to
    leverage and convert the opportunities in ASEAN brought about by the
    Silverlake investment.
    
    Over the past six months, Finzsoft has focused on the following operating
    priorities:
    
    o Settlement of the Full Takeover, understanding inter-group integration and
    leverage opportunities, understanding and shaping a target end state Group
    solution offering and go-to-market strategy for the 120 plus incumbent and
    established top-tier banking and insurance customers of the Silverlake Group.
    
    o Investment and settling in of our entry into omni-sector digital services
    through the final settlement of the Sush business.
    o R&D investment for growth in next generation software solutions, in
    particular, omni-channel Customer Interface solutions.
    o Ongoing delivery to significant Westpac/St George and other key customer
    work orders.
    
    Finzsoft Solutions Limited (NZX:FIN) today reported its half yearly earnings
    to September 30, 2015, continuing Finzsoft's strong revenue growth while
    investing in the company to set up for long term sustainable growth in New
    Zealand, Australia and the wider ASEAN region.
    
    "Finzsoft delivered strong growth, particularly in the Australian market with
    increases in the size and value of work orders from existing clients.  We've
    achieved this while continuing to invest in research and development of our
    Sovereign product and our next generation offerings," said Finzsoft Managing
    Director, Andrew Holliday.
    
    "Something interesting and exciting is happening, and Finzsoft is well
    positioned to continue to embrace opportunities and to lead from the front.
    The dominating companies of today embrace the reality that customers lives,
    their needs and their social context are inextricably linked to the digital
    economy. At their core they have understood that they do not create needs,
    nor do customers really care what they do or how they do it, but rather why
    they do it. Does your offering add value to my life, now, is the mantra of
    our age.
    
    Customer delight has deposed satisfaction, as customer empowerment and the
    demand for services that will add value to a customer's life have displaced
    product or brand loyalty. Today customers are choosing to vote with their
    feet as they embrace the sector disruptors and in so doing they demonstrate
    that the traditional products and models of service delivery are no longer
    relevant to their lives today. These disruptors have understood and enshrined
    as their core value that the internet and mobility are the most powerful
    mechanisms needed to empower connectedness between people with a need, to
    people with the goods, the services or the solutions to that need. In an age
    of commoditisation of core services, core IT and digitalisation, the battle
    is for, and the value lies in, the Interface(s) that empower Connectedness.
    
    In understanding these market and social dynamics, Finzsoft has, and
    continues to, adapt and evolve its offerings. We have done this by leveraging
    off our past two decades of legacy, by continuing our investment and strong
    performance over the past five years, and evolved and embraced our role as a
    disruptor in the provision of Life-style banking, finance and insurance
    solutions. At Finzsoft, we believe in empowering people to choose, access and
    consume products and services anytime, anywhere and in the way they want
    through omni-channel single experiences. In everything we do we seek to
    encourage customers to start from outside the circle, to challenge and think
    differently in order to be empowered to not only disrupt, but redefine and
    lead in order to win the battle for and own the customer interface.  The
    continued success of our strategy is demonstrated through continued,
    repetitive strong performance as demonstrated in today's announcement", said
    Holliday.
    
    Despite continuing and strong revenue growth, the profit after tax has
    reduced when compared to the same period in 2014, largely due to operational
    losses from the Sush Mobile subsidiary which are NZ$862k behind budget.
    Holliday said that had the Sush result been profitable, Finzsoft's after tax
    profit would have been similar to the prior year.
    
    "The losses were driven predominantly from the need to upgrade Sush systems,
    processes and capabilities from rudimentary start-up levels to tier one
    enterprise grade, larger than expected triage work required following the
    acquisition of Sush and the hiring of world-class talent into the business as
    Sush prepares to drive profitable growth into FY16.  The status of and
    results from the business are not what we anticipated. Although the status of
    the business and the extent of the triage was disappointing, the Board
    remains confident that a digital focused evolution of the business is in the
    Group's long-term best interests with the rise of the digital only customer.
    
    Based on the current contracted revenue, along with our pipeline
    opportunities for our financial year ending 30 June 2016, we will expect to
    see Finzsoft continuing to operate profitably with no debt and positive cash
    flow.  We have ongoing delivery to our key client work orders both in
    Australia and New Zealand".
    
    The Company's focus remains on delivering tools and platforms that drive
    efficiencies into traditional banking operations and practices and enable its
    clients to be at the forefront of mobile solutions for their staff and
    customers.
    
    A lot has been done to talk and document the changing consumer behavior,
    however very few institutions in Asia Pacific really understand how to
    respond to this changing behavior, or what the best strategy is for them.
    Research shows that the real stickiness lies in customer communication
    consistency, not brand or products. Customer delight has deposed
    satisfaction, as such a bank or insurance institution should be able to
    seamlessly access information (data), connect and interact with their
    customers through any channel, 24/7, and the customer with their service
    providers. This new, bespoke banking practice is termed as Life-style Banking
    and Insurance.  In an age of commoditisation of core services and
    digitalisation, the battle is for, and the value lies in, the Interface(s)
    that empower Connectedness." Said Holliday
    
    Finzsoft is seeking continued strong and increased appetite for its Customer
    Interface, vertical and core modules and services.
    
    "Investment in R&D is critical to delivering the innovations our customers
    require to offer their customers the on-line experiences and products they
    want in the palm of their hands whenever they make a purchasing decision,"
    said Holliday.
    
    "Delivering the best new solutions first is also how we will leverage the
    opportunities for new customers amongst the 120 top-tier banks across Asia
    that our relationship with Silverlake Axis gives us access to," he said.
    
    "We are focussed on expanding our client base and with the recent acquisition
    of Finzsoft shares by Silverlake Axis Group together with my interests
    through Silverlake HGH Limited, we see significant opportunities for future
    growth in the ASEAN markets, which we are working to leverage and convert,"
    said Holliday.
    
    Earlier this month, Finzsoft Group and Silverlake Axis Group ("SAG") hosted
    SAG's clients in Queenstown for the annual Silverlake Axis Group Client
    Summit.  With over 150 attendees including representatives from the top-tier
    financial service organisations across ASEAN attending, Mr Holliday said the
    Silverlake client summit was an 'excellent opportunity' to engage with key
    customers within the ASEAN region and allowed Finzsoft to showcase our next
    generation omni-channel digital solutions to key decision makers.
    
    "Finzsoft is currently in a transition phase with the Silverlake Axis
    relationship.  As previously noted, we are actively investing in Asian
    opportunities, particularly those that we can build from our Silverlake
    partnership.  We believe investing in these opportunities will create
    long-term shareholder value.
    
    In line with our growth strategy, Finzsoft is growing its capability with
    leading talent joining the company across all areas to continue the
    development of our technologies and to support our growth aspirations the New
    Zealand, Australian and Asian markets." Said Holliday.
    
    In order to position the Company for future growth, three key executive
    appointments and one board appointment have been made during the period
    adding senior mobile, finance and banking leadership to the Finzsoft team.
    These are:
    
    o Craig Parnham has been appointed as CEO for Finzsoft subsidiary, Sush
    Mobile.
    o Brad Edley, who comes from an international corporate and commercial
    background, to be Finzsoft's Chief Financial Officer.
    o Finzsoft was also pleased to welcome Silverlake Axis Group CEO & Managing
    Director, Dr Raymond Kwong joined the Finzsoft Board.
    
    Dr Kwong says that he looks forward to working more closely with the Finzsoft
    team as the company expands to meet a growing demand for its customer
    interface, digital, vertical and core banking and insurance solutions. "There
    are strong synergies between Silverlake's product and solutions, and I look
    forward to working with Andrew Holliday and his team as they provide
    transformational next generation customer interface, digital and vertical
    solutions to our customers and they continue the company's growth through new
    technologies and by broadening into new industries and markets."
    
    In the first half of this year the company has been focussed on settling in
    the Silverlake relationship and on the integration of Sush Mobile into the
    Finzsoft group.  Holliday said the management team would continue to focus on
    both operations and profitability of Sush to enable the business to reach its
    full potential to contribute both revenue and new mobile innovations.
    
    Short-term earnings have been impacted by the upfront investment in sales and
    marketing spend in this six-month period as compared with the prior period.
    This related to the Silverlake Queenstown conference and the IDC conferences
    at three locations across Asia where Silverlake provided Finzsoft the
    opportunity to headline its stand at these important ASEAN industry
    conferences.
    
    Holliday said the board and management see the next 12 months as an
    investment phase for the company backed by continued focus on revenue growth.
    
    "With ongoing investment in its people, processes and infrastructure to
    support the future plans of the Group, the company will be well positioned to
    capitalise on the opportunities for growth that the board and management have
    identified.
    
    I am personally very excited to be part of the Finzsoft and Silverlake
    journey, and part of lifestyle technology transformation that will mark the
    next five years. I believe this next phase will be the most exciting in our
    and our company's histories" said Holliday.
    
    The Board will be meeting in mid-December to consider whether an interim
    dividend will be announced.
    
    Authorised for issue on the 30th of November 2015.
    End CA:00274483 For:FIN    Type:HALFYR     Time:2015-12-02 08:57:02
    				
 
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