25th Aug 2009 07:00
Sydney 25 August, 2009: eServGlobal Announces 2009 Results
eServGlobal Limited ("eServGlobal" or "the Company") ASX:ESV & LSE: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 2009.
Key highlights:
Financial
Revenue of A$147.2 million, compared to A$177.9 million in FY08
EBITDA of A$2.4 million (before restructuring costs), compared to A$24.2 million in FY08
Restructuring costs of A$7.7m arising from headcount reduction action
Net Loss after tax of A$34.7 million, compared to profit $A10.4 million in FY08
Net cash at 30 June 2009 of A$14.1 million, compared to A$18.2 million at 30 June 2008
Operational
New Intelligent Network & Convergent Billing wins in North America, Europe and Asia/Pacific
International Remittance platform, HomeSend, trials completed and commercial launch in August 2009
Headcount reduced by 13%
New CEO and COO appointed in July 2009
Commenting on the results, Richard Mathews, Chief Executive Officer, said:
"2009 was a challenging year for eServGlobal customers and subsequently for eServGlobal, given the difficult market conditions faced right around the world. However despite this, the Company has continued to secure new customers and introduce innovative products, which will help to drive our long-term recovery."
"The recent introduction of a new management team (CEO,COO,CTO), a 13% reduction in headcount (greater than 100 staff), the continuation of cost control measures for the foreseeable future and a laser focus on new business opportunities, are all key elements of our future strategy."
Apart from the restructuring cost, the Net Loss for the year of $34.7 million was influenced by two exceptional factors. Firstly, a goodwill impairment charge of $12.5 million reduced goodwill in the Group balance sheet to $35.5m. Secondly a tax expense of $5.4m was recognised. This tax charge arose primarily from items specific to FY09, namely, the non deductibility of the goodwill impairment charge, foreign withholding tax and deferred tax assets not recognised.
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For further information, please contact: Richard Mathews |
T: +61 2 9364 2700 F: +61 2 9252 6195 |
Chairman's statement
The financial outcome for the year ending 30 June 2009 saw our revenue return to 2007 levels as the telecommunications industry reacted to the global financial crisis and curtailed investment in infrastructure capacity. Having entered the year with a cost base appropriate for a larger revenue objective, it became necessary to instigate a restructuring program during 2009, which resulted in a reduction of over 100 full time equivalent employees, mainly in our European operations.
Sales revenue for the year was A$147.2 million, compared with A$177.9 million in the previous year, a decline of 17%. (Loss)/Profit after tax and minorities was A$(34.7) million for the year to 30 June 2009, compared with A$10.4 million in the previous year. This represents Diluted EPS of (20.1) Australian cents for the year, compared to 6.0 cents in FY08, after a goodwill impairment charge of A$12.5 million.
The Company spent a total of A$21.9 million on R&D in FY09 including A$4.0 million attributed to development of the HomeSend platform, which has been capitalised. This investment ensures that we maintain our competitive position and will support our growth in future years.
Gross Profit was 45% of revenue (53.5% in FY08) reflecting the effect of lower revenue on the pre-existing cost base.
Net cash declined to $14.1 million, as a result of reduced invoicing in the second half.
Outlook
We have found significant challenges in 2009 and we have made the business leaner and more focused. The Board and our new management team continue to have great confidence in our products, our markets and our people.
We are well positioned to take advantage of improved trading conditions in 2010. While we expect the upcoming financial year to be tough, we also expect it to provide the foundation for taking the Company forward on behalf of shareholders.
David Smart
Chairman
Financial Summary
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Results for the year to 30 June 2009
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Full Year to 30 Jun 09 |
Full Year to30 Jun 08 |
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A$ |
% of Revenue |
A$ |
% of Revenue |
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Sales Revenue |
147,246 |
177,934 |
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Cost of Sales |
81,519 |
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82,721 |
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Gross Profit |
65,727 |
44.6% |
95,213 |
53.5% |
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Other Revenue |
421 |
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272 |
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R&D |
17,906 |
12.2% |
25,062 |
14.1% |
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Sales and Marketing Costs |
24,650 |
20,271 |
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Administration Costs |
28,853 |
25,990 |
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Non-recurring charges EBITDA (before non-recurring) EBITDA |
7,691 2,430 (5,261) |
-3.5% |
24,162 |
13.6% |
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Amortisation (1) |
7,783 |
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6,883 |
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Goodwill Impairment Depreciation |
12,501 3,284 |
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2,997 |
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EBIT |
(28,829) |
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14,282 |
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Interest Expense |
262 |
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400 |
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(Loss)/Profit Before Tax |
(29,091) |
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13,882 |
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Tax Expense |
5,435 |
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3,342 |
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(Loss)/ProfitAfter Tax |
(34,526) |
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10,540 |
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Minority Interest |
218 |
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149 |
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(Loss)/Profit Attributable to Members |
(34,744) |
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10,391 |
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Notes:
About eServGlobal
eServGlobal (LSE: ESG & ASX: ESV) provides smart communication and payment services for telecommunications service providers operating on all generation networks.
Over 80 of the world's leading service providers, with over 500 million mobile subscribers in more than 50 countries, are taking advantage of eServGlobal's end-to-end solutions and expertise to quickly deliver revenue-generating services. With 15 offices around the world and 650 staff, we provide flexible solutions, based on a deep understanding of our customers' requirements and challenges.
eServGlobal is listed on the Australian Stock Exchange (ASX: ESV) and the London Stock Exchange AIM market (LSE: ESG). More information can be found at: www.eservglobal.com
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eServGlobal Limited |
Tel: +61 2 9364 2700 |
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Richard Mathews |
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Chief Executive Officer |
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Altium |
Tel: +44(0)20 7484 4040 |
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Nominated adviser, Mike Fletcher/Paul Lines |
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Corporate Broking, Chloe Ponsonby |
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.
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