Platform provider GBST managed to double its profit in financial year 2019.
The group’s net profit after tax (NPAT) came to $12.7 million, up by 103 per cent from FY18.
Total revenue and other income came to $94.3 million, up by 7 per cent from FY18, while the group’s earnings before interest, tax, depreciation and amortisation (EBITDA) came to $18.6 million, up by 48 per cent. Operating EBITDA was $19 million, up by 52 per cent.
GBST’s Australian wealth management arm produced a revenue of $17.4 million for the year, up by 12 per cent, while its operating EBITDA before its strategic R&D and group expenditure was $6.6 million, down by 12 per cent.
The technology provider said the cut in earnings came about from increased investment in mandatory regulatory legislation capability in Australia as well preparation work for the E-VOLVE project to bring the Composer platform to modern standards.
License revenue increased by 4 per cent to $13.1 million from the year before, as service revenue shot up by 49 per cent.
The capital markets segment in Australia generated $22.3 million in revenue, up by 5 per cent, while operating EBITDA grew 24 per cent in the year.
Wealth management in the UK generated a revenue of $42.3 million, up by 6 per cent from the prior year.
Capital markets in the rest of the world made the company $12 million in revenue, up by 5 per cent.
Currently the company is undertaking a strategic R&D program with work across Catalyst, E-VOLVE, a new annuity product build in the E-VOLVE technology and its ASX CHESS upgrade products.
GBST spent $1 million on its R&D in FY19.
Basic earnings per share for the year were 18.7 cents, nearly double FY18’s 9.2 cents. However, due to GBST’s systems needing prudential capital management, no dividend was declared.
In July, the company yielded to a binding agreement for a takeover by the UK-based FNZ, containing a scheme which if approved, would see it buy the fintech for $3.85 per share.
The GBST board unanimously recommended that shareholders vote in approval of the scheme valuing the company’s equity at around $269 million.
Among GBST’s wealth management clients are Mercer, NAB, Investec, Fidelity and Russell Investments.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].