FIN
28/11/2014 16:34
INTERIM
NOT PRICE SENSITIVE
REL: 1634 HRS Finzsoft Solutions Limited
INTERIM: FIN: 30th September 2014 Half Year Report
Directors' Report
28 November 2014
Directors' Report
HALF YEAR RESULT POSITIONS FINZSOFT FOR RECORD FULL YEAR PROFIT
The Directors of Finzsoft Solutions Limited are pleased to report on the
Group's performance for the six months ended 30 September 2014.
Finzsoft Group reports a net profit after tax of $2.023 million on revenue of
$7.865 million. This half year result compares to a reported small loss after
tax of $(0.063 million) and sales of $4.199 million for the same period of
the prior year.
The half year result reflects the acquisition of Sush Mobile effective 28
August 2014, and includes the consolidated accounts of both businesses,
reflecting one month revenue from the Sush operations. On a like for like
basis, excluding any net profit after tax or revenue from Sush Mobile,
Finzsoft Group reports a net profit after tax of $1.981 million on revenue of
$7.603 million. As above, this compares to a reported small loss after tax of
$(0.063 million) and sales of $4.199 million for the same period of the prior
year.
Finzsoft Managing Director Andrew Holliday said: "Based on the current
contracted revenue and pipeline opportunities for the year ending 31 March
2015, we will materially exceed our previous profit guidance of four times
last year's profit result"
In light of the excellent first half financial performance, as well as the
expected full year financial results for the year ending 31 March 2015, the
Board expect to announce that Finzsoft will pay an interim dividend. The
Board are meeting in early December to consider this matter and the decision
on the interim dividend will be announced after that meeting.
Continuation of record year performance
Finzsoft Managing Director Andrew Holliday said: "As signalled by the Board,
FY13 and FY14 have been turnaround years for Finzsoft with the new majority
shareholder, Board and management refocussing the business and securing the
Company's largest work orders to date. Sales efforts in the previous periods
have delivered a strong order book, and the continued focus on efficiency and
on-time, on budget delivery to customers has resulted in profitable growth
for Finzsoft, and we are on track to deliver a third year of record growth.
"Key highlights for the period include the continued expansion of our
Australian operations, the acquisition of Sush Mobile to expand our product
offering, and a new management team and structure in place to identify and
optimise ongoing gains across our operations."
Strategic Initiatives
As part of Finzsoft's planned approach to build next generation capabilities
and transform how Finzsoft's customers approach core banking refreshes and
upgrades, the Company successfully acquired and integrated Sush Mobile into
its team and signed a five-year cloud agreement with IBM. "An increased focus
by banking and finance customers on digital, mobility, online banking and
granular customer data means Finzsoft customers want greater flexibility and
more personalised and integrated solutions," said Andrew Holliday.
Sush Mobile develops end-to-end mobile solutions, specialising in apps for
Android, iOS, and Windows Phone, for businesses primarily in the enterprise
space. In the past six months, Sush Mobile has been acknowledged for its
innovations and growth being named the ninth fastest-growing company in New
Zealand in the 2014 Deloitte Fast 50 and just one of 12 New Zealand companies
to be ranked in the top 100 of the 2014 index of the Deloitte Asia Pacific
Technology Fast 500. The Kiwibank Home Hunter app, co-developed by Sush
Mobile, was named a winner of the Innovation in Financial & Professional
Services Awards at the recent NZ Innovators Awards.
Andrew Holliday said: "Sush Mobile's innovations, coupled with the company's
next generation knowledge and customer support tools, will help Finzsoft and
its customers meet the competitive challenges that lie ahead. As a Group,
Finzsoft and Sush Mobile will provide 'mBank' solutions to respond to key
disruptive trends in banking - O2O (online to offline), IoT (Internet of
Things) and customer centricity."
In September, Finzsoft signed an agreement with IBM to move Finzsoft's core
and vertical banking application to the IBM cloud. This move will enable
Finzsoft to offer solutions-as-a-service across the Asia Pacific Region and
allow the Company to be more responsive and more agile.
Under the agreement, Finzsoft will leverage IBM Cloud Managed Infrastructure
Services for New Zealand, as well as infrastructure from SoftLayer, an IBM
company, enabling Finzsoft to take advantage of IBM's global network of
enterprise-grade data centres to support future expansion.
Management and Board appointments
In order to position the Company for future growth, two key executive
appointments have been made during the period adding senior IT and banking
leadership to the Finzsoft team. Hugh McKellar joined the Company as Chief
Operations Officer, and Paul Doig, who comes from an international corporate
and commercial banking background, has returned to New Zealand from HSBC in
Singapore to be Finzsoft's Sales Director.
Finzsoft was also pleased to welcome Westpac Banking Corporation General
Manager Service Delivery Infrastructure, Gary Sim, to the Finzsoft Board.
"Attracting a Director of Gary Sim's calibre underscores the quality of
Finzsoft's products and service and the company's current momentum and growth
path," said Andrew Holliday.
"Finzsoft is well-placed to leverage its world leading capabilities for
sustained growth in Australasia and internationally, and I relish the
opportunity to apply my experience and passion around leading technology for
business transformation," said Mr Sim.
Investment and Product development
Positive product feedback and increased appetite for new modules and services
has seen the sale of Finzsoft's next generation Business Origination, tablet
app Seal the Deal and Mobile Banking modules to New Zealand and Australian
customers.
The Company's focus remains on delivering tools and platforms that drive
efficiencies into traditional banking operations and practices and enable our
clients to be at the forefront of mobile solutions for their staff and
customers.
Markets
FY14 has seen significant growth out of the Australian market with continued
substantial work orders from Westpac St. George Bank.
Andrew Holliday says: "St George uses Finzsoft's software and solutions
across its vehicle and equipment finance businesses in Australia. Since St
George, a division of Westpac Banking Corporation, acquired CFAL from Lloyds
Banking Group Australia last year, Finzsoft has secured multiple work orders
to integrate CFAL's portfolios into St George.
With 59% of our revenue now coming out of Australia we have diversified our
income across Australasia. Finzsoft continues to be a significant provider of
financial technology services in the New Zealand finance sector, delivering
next generation mobile banking solutions to existing Sovereign clients,
including the Nelson Building Society and Police and Families Credit Union.
In addition to our mobile banking module, our Seal the Deal app allows our
customers to be one step closer to paperless banking."
Capital Structure
As previously announced, Finzsoft has engaged PWC to assist with a strategic
review of its capital and ownership structure. The review is considering a
range of initiatives to improve the capital structure and share trading
liquidity to more appropriately reflect current and future market
opportunities, the Company's investment in R&D over 25 years and the value of
its IP. The Board has the full support of the Company's majority shareholder
to execute these initiatives.
Outlook
The Board and Asean Management will continue to focus on known revenue
opportunities in Australia, New Zealand and tightly manage costs.
Finzsoft Chairman Brent Impey said: "IDC Financial Insights is tracking
external spend on third party financial technology providers at $300 billion
globally. As a financial technology company Finzsoft is positioned to
capitalise on the growing Fintech spend with its excellent track record of
delivery to banking and finance customers in Australia and New Zealand,
combined with the broader market opportunities from its partnership with Sush
Mobile and relationship with IBM."
"The Board is absolutely delighted with the outstanding performance by the
Company over the period, in particular, the work done by the Finzsoft team on
securing and successfully delivering on the work orders for St George Bank.
We remain committed as a Board and Management to investing in our people,
products and services and delivering continued profitable growth."
Authorised for issue on the 28 November 2014.
Brent Impey
Chairman
Andrew Holliday
Managing Director
End CA:00258275 For:FIN Type:INTERIM Time:2014-11-28 16:34:46
