Finzsoft

From the Boatf
Finzsoft is a provider of software and solutions for financial institutions across Australia, Asia and NZ. FIN is also listed on the NZX. The company has 8.3M shares on issue and rarely trades due to the lack of a free float. The MD, Andrew Holliday, controls 68% of the company, and just over a year ago made a failed full takeover offer for the company at 45c a share. One would think that is pretty cheeky, considering the company at the FY15 half year results has already made a $2M profit or 24c a share. The company is also forecasting full FY15 profit to exceed materially more than 4x last year's profit of $750k. Based on this, it is reasonable to assume FIN is going to earn over $4M profit this financial year (around 48c eps). FIN shares are up 5 times in the last 2 months and 18 times in the last 10 months!! Wow!

So why are we telling you all this?

Well, it is not known to many investors, but Rubik Financial (RFL) owns just under 20% of FIN. The current market cap of FIN is NZD$44M, valuing RFL's holding at AUD$8M. If FIN continues its last 3 years of growth, then it is plausible that FIN's market cap may exceed that of RFL's! Whether that happens or not, RFL's holding in FIN is becoming quite material. It's important to note that FIN has initiated dividend payments and has appointed PWC to evaluate strategic options for the company's capital base and to address liquidity issues.

Another point to mention is that RFL is carrying its FIN holding on the balance sheet at under $1M as of June 2014. We would expect a material adjustment to that in the upcoming half year result which would make it quite interesting...... Stay tuned.