Sydney, Aug 20, 2008 AEST (ABN Newswire) - eServGlobal Limited (ASX:ESV)(LON:ESG), a specialised supplier of large-scale telecoms network software and services to telecoms carriers around the world, today announces its audited results for the year to 30 June 2008.
Key highlights:
Financial
- Record revenue of A$177.9 million, 15.9% up from A$153.6 million in FY07
- EBITDA of A$24.2 million, 27.6% up from A$18.9 million in FY07
- EBITDA margin 13.6%, up from 12.3% in FY07
- NPAT (Net profit after tax) of A$10.4 million, up 91.5% from $A5.4 million in FY07.
(note: after amortisation charge of A$6.9 million)
- Diluted EPS of 6.0 Australian cents, up 88% from 3.2 cents in FY07
- Dividend of 3 Australian cents per share, up 50% from 2 cents in FY07, payable 15 September 2008 [to those shareholders on the register on 29 August 2008]
- Net cash at 30 June 2008 of A$18.2 million, up from A$12.5 million at 30 June 2007
Operational
- New Intelligent Network & Convergent Billing wins in Latin America, Asia and Africa, demonstrating eServGlobal's competitive strength
- Continuing organic growth, including capacity and functionality upgrades from our global installed base
- Continuing improvement in product mix, software licence sales increasing to 39% of revenue, up from 31% in FY07
Commenting on the results, Laurent Lafarge, Chief Executive Officer, said:
"We have again delivered outstanding growth, resulting from our technology advantage and our established position in the world's highest growth telecommunications markets. Our investment in new technology, particularly around mobile payments, gives us confidence of continuing our progress in FY09."
Chairman's statement
The 2008 financial performance is an excellent achievement, highlighted by major new contracts and strong upgrade demand from our installed base, which - with over 500 million subscribers in more than 50 countries - is the largest of any independent telecoms advanced services software company.
Sales revenue for the year was A$177.9 million, compared with A$153.6 million in the previous year, growth of 15.9%. Profit after tax and minorities was A$10.4 million for the year to 30 June 2008, compared with A$5.4 million in the previous year, growth of 91.5%. This represents Diluted EPS of 6.0 Australian cents for the year, up 88% from 3.2 cents in FY07, after an intangible asset amortisation charge of A$6.9 million arising from the acquisition of Ferma SA in 2005.
The company spent A$25.1 million on R&D in FY08 and plans to increase this to A$26.9 million in FY09. This investment ensures that we maintain our competitive position and will underwrite our growth in future years.
Gross Profit was 53.5% of revenue (47.7% in FY07). EBITDA margin improved to 13.6%, up from 12.3% in FY07 as a result of improved economies of scale. We expect margins to increase again in FY09, due to further efficiency improvements and continuing growth in the proportion of our revenue derived from product licence sales.
Net cash improved to A$18.3 million as a result of improved focus on collection processes and further improvements are planned in FY09.
No acquisitions were made in the course of FY08, although we reviewed a number of companies and we maintain a watch for opportunities that can improve shareholder value.
Outlook
The company is confident of further progress in 2009. New subscriber growth is expected in developing markets, with continuing uptake of new technologies in both developed and developing markets. In today's telecommunications industry, where operators are increasingly focused on operating efficiency and new subscriber revenue opportunities, eServGlobal is regarded as a forward thinking supplier with solutions that deliver flexibility, scale and reliability.
Ian Buddery
Executive Chairman
Financial Summary
Results for the year to 30 June 2008
----------------------------------------------------- Full Year Full Year to 30 Jun 08 to 30 Jun 07 A$ % Revenue A$ % Revenue-----------------------------------------------------Sales Revenue 177,934 153,591 Cost of Sales 82,721 80,378 Gross Profit 95,213 53.5% 73,213 47.7%Other Revenue 272 188 R&D 25,062 14.1% 18,771 12.2%Sales and Marketing Costs 20,271 15,835 Administration Costs 25,990 19,861 EBITDA 24,162 13.6% 18,934 12.3%Amortisation (1) 6,883 6,975 Depreciation 2,997 2,577 EBIT 14,282 9,382 Interest Expense 400 266 Profit Before Tax 13,882 9,116 Tax Expense 3,342 3,506 Profit After Tax 10,540 5,610 Minority Interest 149 185 Profit Attributable to Members 10,391 5,425-----------------------------------------------------Notes:(1) Amortisation is non-cash write down of intangible assets from the Ferma acquisition in 2005, being software & customer relationships, as required by IFRS.
Cautionary statements
Statements in this document expressing the beliefs and expectations of management regarding future performance are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on management's expectations as of the date of this document and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to risks and uncertainties including, but not limited to, uncertainty in communications spending, the implementation of the Company's strategic repositioning and market acceptance of the Company's new solutions strategy, six-monthly fluctuations in financial results, the Company's ability to exploit fully the value of its technology and its strategic partnerships and alliances, the availability of products from product component vendors and other risks. In addition, while management may elect to update forward-looking statements at some point in the future, management
Specifically disclaims any obligation to do so, even if its estimates change. Any reference to our website in this press release is not intended to incorporate the contents thereof into this press release or any other public announcement.
Contact
Ian Buddery, Executive Chairman
investor@eservglobal.com
T: +61 2 9364 2700
F: +61 2 9252 6195
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