FIN
07/11/2013 17:11
HALFYR
REL: 1711 HRS Finzsoft Solutions Limited
HALFYR: FIN: Preliminary Finzsoft Half Year Results 2013
The Directors of Finzsoft Solutions Limited are pleased to report on the
Group's performance for the six months ended 30 September 2013.
Background: FY13 Full Year Highlights
The Company has previously reported for the twelve months ended 31 March 2013
that there have been a number of significant achievements during the year
including;
- 14% growth in revenue and a 172% growth in profitability.
- Delivery of our next generation Sovereign Business Origination solution.
- 40% of staff productive hours invested into internally sponsored Research
and Development indicating our continued commitment to future growth
- Recognition of Finzsoft's Sovereign Banking and Finance solution
("Sovereign") as a world-class tier one product through successful
participation in several competitive bid processes for Tier One banks in the
Asean region.
Background: For the six months ended 30 September 2013.
The FY13 and FY14 periods are turnaround years for Finzsoft. The board and
management have and are concentrated on known revenue opportunities in
Australia and New Zealand and tightly managed costs. At the same time, we
believe that future growth is inextricably linked to sales in Australia and
Asia. We are deliberately investing resources into both Australia and Asia,
with the anticipation of sales in the next financial year, which in turn will
provide the foundation for future growth
The highlights for the for the first half year period include:
- Restructured majority shareholding, management and a refocused strategy;
- Second sale of our next generation Sovereign Business Origination solution;
- First sale of our native Mobile Banking Solution;
- First sale and committed second sale of our new native tablet solution; and
- Positive performance in international RFI's, RFP's and POC's as a
foundation for future sales.
Strategic Focus
Finzsoft's new majority shareholder, the Board and Finzsoft's executive
remain committed to the Company mission to provide innovative,
transformational, scalable products and services. Sovereign is an enabling
technology that drives behaviour and empowers our customers. The strengths
of the solution are its security, auditability, stability, flexibility and
scalability. Its rich functionality dramatically improves effectiveness and
efficiency through automated and paperless processes. Finzsoft's vision is
to be a leading supplier of scalable banking and finance software solutions
in the APAC and Asean regions.
First Half-Year Period Performance
The first half-year period to 30 September 2013 has been challenging with
both existing and new customers deferring material expenditure decisions. The
sale of new next generation mobility modules to an existing New Zealand
customer, and positive indications of increased appetite for new modules and
increased services to support material growth opportunities by both New
Zealand and Australian customers provide a positive foundation for the second
half of this year.
In the six months ended 30 September 2013 the Group has experienced:
o A decrease in revenue of 11% to $4,216m compared to the previous six months
ended 30 September 2012, primarily from deferred customer decisions on new
module sales and services. This is offset by a decrease in operating expenses
by 4% to $4,268; and
o A decrease in Net Profit after Tax (NPAT) from $310k to a loss of $63k
compared to the previous six months ended 30 September 2012.
In order to remain a market leader in banking software, Finzsoft continues to
invest heavily in research and development of the Sovereign solution.
Based on committed growth opportunities by existing customers during the
second half of this year and into the next annual periods, and the
consequential increased appetite for new modules and increased services to
support these material growth opportunities, Finzsoft remains positive that
these opportunities will provide a positive foundation for the second half of
this year and into the following periods.
Principal Activities
Finzsoft is an experienced, mature and proven banking and financial software
vendor. Sovereign is an integrated, modular product supporting full
lifecycle/end-to-end (origination, core/servicing, arrears management and
collections) processes for retail, corporate and trading banks. It can be
deployed as a comprehensive core solution, or to support specific vertical
businesses such as auto and equipment finance. Sovereign is unique in
offering a proven, scalable full lifecycle product offering seamless vertical
and horizontal integration.
Our solution is a mission critical component of our client's business. As
such, we recognise our role as a strategic business partner and understand
the need to consistently deliver exceptional customer service along with
robust, secure and innovative solutions.
Target Markets
Finzsoft continues to source its revenue from Australia and New Zealand
whilst investing in Asia to further grow and diversify our income streams.
Currently the regional split of our revenue is New Zealand 58% and Australia
42%.
Asia
Finzsoft has chosen to enter the Asean market in response to the scale of the
market opportunity, the demand from the market for innovative, world-class
products such as Sovereign and the ability for the prospective clients to
make an investment commensurate with the value to be derived by using the
Sovereign product.
We have established our presence in this region over the last 24 plus months
and in the sales opportunities that we have pursued we are consistently being
chosen to move through the sale process to the final stage.
Finzsoft continues to perform in international RFI's, RFP's and POC's as a
foundation for future sales. We have a number of well-advanced sales
opportunities that have proceeded to post POC stage, which we are confident
will translate into a foundation for material levels of revenue and
profitability in the near future.
Australia
Finzsoft has an established strong client list in Australia including Harvey
Norman, Westpac Bank and the Royal Automobile Club of Victoria. We have a
significant opportunity to develop our offering within these companies and to
also grow our client base within Australia. This is one of our key
strategies for the coming year.
Key customers in Australia have committed to material growth opportunities
during the second half of this year and into the next annual periods, and the
consequential increased appetite for new modules and increased services to
support these material growth opportunities, Finzsoft remains positive that
these opportunities will provide a positive foundation for the second half of
this year and into the following periods.
New Zealand
Finzsoft remains a dominant market provider in the New Zealand IT finance
sector market and we have aspirations to further consolidate and grow that
position.
Many of Finzsoft's New Zealand's customers have expressed a desire to expand
the use for Finzsoft software. An expression of this desire has resulted in:
- Second sale of our next generation Sovereign Business Origination solution;
- First sale of our native Mobile Banking Solution; and
- First sale of our new native tablet solution.
These sales are evidence of the strong appetite for innovative,
transformational and enabling solutions from the New Zealand customer base.
Increased Investment in Research and Development
Finzsoft has continued to increase its investment in the Sovereign banking
and finance software solution. This will accommodate growth in new markets
and respond to existing client demands for new features and functionality.
Our software architecture and development philosophy is focused on ensuring
that Finzsoft's Sovereign solution remains "best of breed". We develop and
upgrade our software incorporating global best practise and legislative
central bank requirements, while ensuring we enable our clients to improve
their customers experience and achieve significant cost savings through
innovation and automation.
Over the last two years we have developed our next generation Business
Origination solution, and have made the first sale and installation of this
solution in the current year. This new Business Origination product has been
consistently well received by existing and prospective clients and we have a
number of well-advanced sales opportunities for this product.
In response to our client needs we have developed a Debit Card system during
the year and we continue to invest in online and mobile solutions to keep our
clients at the forefront of these developing technologies.
Staff
Finzsoft has a highly skilled team of professionals who are focussed on
developing "best of breed" solutions, in the area of banking and finance.
Finzsoft's growth will come from leveraging these skills and taking the
Sovereign product internationally.
Capital Structure
In order for the Group to meet its' expansion plans, particularly into
Australia and Asia, the Board has reinforced that it may require a change in
the capital structure. The Full Takeover offer dated 14 October 2013 from
Holliday Group Holdings (ICT Investments) Limited ("Holliday Group") formed
part of this strategy. The Directors continue to examine additional options
including a combination of new equity and debt. The directors are hopeful of
securing the first contract in Asia which may impact on the Group's future
capital structure.
Dividend
For the full year period ended 31 March 2013, the Directors recorded that
they had resolved not to pay a final dividend to shareholders at this time.
The Director's hereby note that it is their current intention that no
dividends will be made in the medium term whilst Finzsoft executes its Asean
growth strategy.
Outlook
Finzsoft previously recorded that FY14 financial year will see further
investment in the following areas:
o Continuing our sales and marketing investment in the Asean and Australasian
regions and converting the current opportunities into long term revenue
streams;
o Continuing to invest both funds and resources into research and
development; and
o Continued review and investment in our delivery and service model.
This strategy for the second half of this period remains unchanged.
The Directors are confident that based on committed growth opportunities by
existing customers during the second half of this year and into the next
annual periods, and the consequential increased appetite for new modules and
increased services to support these material growth opportunities, that these
opportunities will provide a positive foundation for the second half of this
year and into the following periods.
The Directors are also confident that the significant investment that the
Group continues to make into developing the product and entering new markets
will provide future returns to shareholders.
For more information on our activities, please refer to our web site
http://www.finzsoft.com
Authorised for issue on the 4 November 2013.
Brent Impey Andrew Holliday
Chairman Managing Director
End CA:00243498 For:FIN Type:HALFYR Time:2013-11-07 17:11:24
