Consistent and stable half year financial performance: Well positioned for long-term future growth

Sydney, 17 February 2012 (ASX: BVA) – Bravura Solutions Limited (Bravura) – a leading global supplier of transfer agency and wealth management software applications and related professional services – today announced the half year results for the period ended 31 December 2011.

NPAT improved by 25 per cent to $2.2 million and EBITDA was $9.4 million. Cash flow continued to improve for the fourth consecutive six month period. Operating inflows were $12.5 million, a 54 per cent increase, compared to $8.1 million in the prior corresponding period.

Bravura Chairman, Brian Mitchell said, “Our solid NPAT and operating cash flow results are extremely pleasing, given the challenging operating environment that currently underpins financial markets. We are seeing increased market interest in financial services technology, as organisations are focused on increasing operational efficiency and employing cost reduction strategies.

“These consistent and stable half year results continue to position us well for long-term future growth.”

Bravura CEO, Tony Klim said, “We have placed significant focus over the past twelve months on defining and implementing Bravura’s strategic plan and are confident with our progress. We have continued to complete implementations and secure new contracts for key clients such as Russell Investments, which has commenced its Sonata implementation.

“In general, there is increased market interest in our Sonata platform, evidenced by the number of product demonstrations and industry consultant attention.”

“As we continue to leverage Bravura’s strengthening financial foundation, we maintain our focus on specialisation in wealth management and transfer agency in the Asia Pacific, United Kingdom and European markets.

1HFY12 highlights

  • NPAT improved by 25 per cent to $2.2 million
  • Cash flow continued to improve with operating inflow of $12.5 million compared to $8.1 million in the prior corresponding period
  • Revenue decreased marginally by 2.2 per cent to $59.8 million (but increased by 3.2 per cent to $63.1 million on a constant currency basis)
  • EBITDA decreased by $1.0 million from $10.4 million to $9.4 million (a decrease of 1.8 per cent to $10.2 million on a constant currency basis)

Results overview

ResizedImage600243-H1FY12

Revenue

Revenue for the first half of FY2012 was $59.8 million, a slight 2.2 per cent decrease from the first half of FY2011, as currency continued to impact Bravura’s overall results when compared to the foreign exchange rates from the prior period. This was predominantly caused by the strengthening of the Australian dollar against the British Pound and US dollar. Had currency rates remained stable, revenue would have increased overall by 3.2 per cent over the prior corresponding period.

Revenue continued to be well diversified across lines of business, geography and industry/product lines.

EBITDA

EBITDA decreased by $1.0 million over the prior corresponding period, however, in constant currency terms, the decrease was only $0.2 million. This consistent performance in a challenging economic environment is a satisfactory result for Bravura.

Operating costs

Operating costs continued to be effectively managed through the use of flexible and cost efficient resource pools. Bravura anticipates this trend will continue as it further builds and expands its development centres in lower cost jurisdictions, specifically India and Poland. Development and testing activities in the regions are now driving revenue generation.

Cash flow

Cash flow improved significantly from the prior corresponding period, and provided sufficient resources to operate with a lower level of debt. This enabled Bravura to undertake a share buy-back during the period. As at 16 February 2012, 57,298,970 shares were purchased under the buy-back program, a total of 84 per cent of the final ten per cent objective.

Balance sheet

Bravura’s financial position remains strong, with a slight reduction in contributed equity resulting from the share buy-back that was undertaken as part of its capital management strategy.

Current liabilities have increased from the prior year as a result of Bravura’s banking facilities that are due to expire in December 2012. Management is currently reviewing its overall banking requirements and is discussing options moving forward with several financial institutions to ensure it has effective cash management.

Bravura remained within all banking covenants as at 31 December 2011 and had $10.5 million of undrawn facilities.

Events over last six months

In the APAC Wealth Management division over the past six months, Bravura signed a contract with new superannuation client, Russell Investments to use Sonata to administer its retail offering. Russell’s implementation is currently underway. Existing client Politis, signed a seven year contract for Bravura’s Garradin Private Wealth & Portfolio Administration system, and Australian Ethical Investment implemented Garradin for unit pricing and asset management functionality.

Version 12.0 of Garradin was released during the period, with extended tax optimisation functionality that will provide Bravura access to the Trust market.

In the EMEA Wealth Management division, Bravura commenced an extensive program of work for Citi, following its acquisition of Scottish Friendly’s wrap business.

In the Transfer Agency division, several clients reviewed extensions to the scope and terms of their contracts. Business partnerships continued to be strengthened in line with Bravura’s client strategy.

Focus remained on development projects for TA (Transfer Agency) Web, Operational Data Store (ODS), Retail Distribution Review (RDR), and Babel’s improved processing capabilities.

Outlook

Bravura continues to focus on cost management in every facet of the business and is confident that its existing consistent and stable financial performance bodes well for long-term future growth.

With interest in Sonata gaining traction in wealth management and life insurance markets and compliance with regulatory change becoming more time critical for clients and creating interest in Bravura’s messaging solutions, the Company is well positioned.

As early signs emerge confirming that European financial markets are stabilising, and inquiry levels in Bravura’s software and services continues to improve, it is anticipated that this will translate to improved business flows over time.

Bravura’s Chairman, Brian Mitchell and Chief Executive Officer, Tony Klim were quoted in this press release. To ask Brian or Tony a question regarding the release or to discuss it in more detail, email PR@bravurasolutions.com

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