22nd Aug 2007 09:34
eServGlobal Limited22 August 2007 eServGlobal Limited eServGlobal announces record 2007 results, increases dividend. Sydney, Australia - 22 August, 2007 - eServGlobal Limited (ASX:ESV & LSE:ESG), aspecialised supplier of large-scale telecoms network software and services totelecommunications carriers, today announces its audited results for the year to30 June 2007. Key highlights: Financial • Record revenue of $153.6 million, 62% up from $95 million in FY06 • EBITDA of $18.9 million, 88% up from $10.088 million in FY06 • EBITDA margin 12.33%, up from 10.6% in FY06 • Diluted EPS of $0.03 up from $0.017 in FY06 • Dividend of $0.02 per share, up from $0.012 in FY06 • Net cash $12.5million, up from $5.471 million at 30 June 2006. Operational • New Intelligent Network & Convergent Billing wins in Indonesia and Malaysia, demonstrating eServGlobal's leadership in large-scale cost-efficient platforms. • Successfully converted strong capacity and functionality upgrade demand, resulting in the largest installed base of any independent telecoms advanced services software company • Completed acquisition of certain assets of Empower Interactive Group Limited, a provider of content delivery and management platforms for mobile carriers. Commenting on the results, Ian Buddery, Executive Chairman, said: "We are proud to have delivered an outstanding growth performance, which exceedsrecent forecasts and analyst expectations. This result includes significantlyimproved margins and an expanded product portfolio. eServGlobal is firmlyestablished in all of the world's fastest growing telecommunications markets,with an integrated modern technology platform that brings flexibility, capacityand competitiveness to our customers and partners. We expect continuing growth in FY08 and our confidence is reflected in ourincreased product investment, with "pure" R&D planned at 14% of revenue in FY08." For further information please contact: eServGlobal Ian Buddery, Executive Chairman Tel. +61 2 9364 2700 [email protected] Chairman's statement Sales revenue for the year was $153 million, compared with $95.004 million inthe previous year, a growth of 62%. The eServGlobal group recorded a profitafter tax and minorities of $5.4 million for the year to 30 June 2007. Thisrepresents Earnings per Share (EPS) of $0.03, a strong increase over theprevious year ($0.017) and includes an intangible asset amortization charge of$6.975 million arising from the acquisition of Ferma SA in 2005. We have changed the reporting of Gross Profit, excluding self-funded R&D fromthe cost of sale. The company spent $18.77 million in product R&D in FY07 andplans to increase this to $24 million in FY08. Removing this amount from "cost-of-sale" better reflects the true sales margin and brings us into line withreporting practices in the broader software industry. Gross Profit on the new basis was 47.7% (46.6% in FY06). EBITDA margin improvedto 12.3%, up from 10.6% in FY06 as a result of improved economies of scale insales and administration. We expect both Gross margin and EBITDA margins toincrease again in FY08, as a result of further efficiency improvements andcontinuing growth in the product license component of our revenue. This financial performance represents an excellent full year result, highlightedby major new contracts and strong upgrade demand from our installed base, whichis the largest of any independent telecoms advanced services software company. The integration of the Empower Interactive assets was achieved quickly and weare now making progress with both a new product strategy and new sales activityin the content gateway market. Net cash improved to $12.5 million as a result of improved focus on collectionsand the successful completion of a number of major projects. Outlook The company is confident of continuing growth in developing markets and thecontinuing uptake of new technologies in both developed and developing markets.In today's telecommunications industry, where significant consolidation ofnetwork and billing vendors is occurring, eServGlobal stands out as thestrongest independent provider with the largest installed base. Thispositioning enables us to offer the best technology solution withoutcompromising delivery or service. Ian Buddery Executive Chairman Financial Summary Results for the year to 30 June 2007 Full Year to Full Year to 30 Jun 07 30 Jun 06Sales Revenue 153,591 100% 95,004 100%Cost of Sales 80,378 50,741Gross Profit 73,213 48% 44,263 47%Other Revenue 188 459R&D 18,771 12% 8,059 8%Sales and Marketing Costs 15,835 10% 11,513 12%Administration Costs 19,861 13% 15,062 16%EBITDA 18,934 12% 10,088 11%Amortisation 6,975 3,164Depreciation 2,577 1,963EBIT 9,382 4,961Interest Expense 266 489Profit Before Tax 9,116 4,472Tax Expense 3,506 1,820Profit After Tax 5,610 2,652Minority Interest 185 68Profit Attributable to Members 5,425 2,584 Notes: (1) Amortisation is non-cash write down of intangible assets from Fermaacquisition, being software & customer relationships, as required by IFRS.Software $17.95m over 5 years = $3.59m, Customer relationships $22.35m over 7years = $3.19m, Total $6.78m per year. (2) We have changed the basis of the Gross Profit calculation, to bring thegroup into line with accounting practices used by the majority of softwareproduct companies. Previously, the "Cost of Sales" figure included all softwareengineering costs, both those associated with customer projects and those forproduct research & development (R&D). We now remove R&D from cost of sale,which gives a more meaningful measure of gross margin. (3) The Ferma SA group was acquired on 1 November 2005. Its results from thatdate are included in the 2006 results. About eServGlobal eServGlobal's software systems connect the world's telecommunications networkswith the charging, billing and payments worlds. Phone companies use our softwareso that they can charge for phone calls, messages and other services instantly,and manage advance payments. We link the communications and financial aspects of telephony, in real-time. eServGlobal Intelligent Network applications enable service providers tomaximize today's proven revenue streams whilst ensuring service continuity andnew revenue opportunities when evolving to next generation networks. We enable telephone companies to not just grow, but to grow profitably andefficiently. Over 80 of the world's leading telcos are taking advantage of eServGlobal'sadvanced solutions and expertise to successfully address their business challenges and to manage over 160 million telecommunications customers. eServGlobal is listed on the Australian Stock Exchange (ASX: ESV) and the LondonStock Exchange AIM market (LSE: ESG). More information can be found at:www.eservglobal.com Cautionary statements Statements in this document expressing the beliefs and expectations ofmanagement regarding future performance are "forward-looking statements" withinthe meaning of the United States Private Securities Litigation Reform Act of1995. These statements are based on management's expectations as of the date ofthis document and are subject to uncertainty and changes in circumstances.Actual results may differ materially from these expectations due to risks anduncertainties including, but not limited to, uncertainty in communicationsspending, the implementation of the Company's strategic repositioning and marketacceptance of the Company's new solutions strategy, six-monthly fluctuations infinancial results, the Company's ability to exploit fully the value of itstechnology and its strategic partnerships and alliances, the availability ofproducts from product component vendors and other risks. In addition, whilemanagement may elect to update forward-looking statements at some point in thefuture, management specifically disclaims any obligation to do so, even if itsestimates change. Any reference to our website in this press release is notintended to incorporate the contents thereof into this press release or anyother public announcement. Paste the following link into your web browser to download the PDF documentrelated to this announcement: http://www.rns-pdf.londonstockexchange.com/rns/6154c_-2007-8-22.pdf http://www.rns-pdf.londonstockexchange.com/rns/6154c_2-2007-8-22.pdf This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Wameja Di