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GBST swings to FY11 profit

GBST swings to FY11 profit

Finance industry software and technology services provider GBST Limited (ASX:GBT) has reported a swing to profit, but flat revenue for FY11.

The company said its net profit for the year was $1.4 million, compared to a $2.4 million loss in FY10.

But ebitda fell 16% to $13.7 million, and group operating revenue stayed flat at $67.5 million.

GBST's earnings for FY10 had been impacted by an impairment charge, after the company discovered that the Syn~ securities transaction software business it had acquired was using a business model that was resulting in version fragmentation.

In June, the company launched Syn~ 2.0, a version of the product that brings together all the various installations into one code line, and recently revealed it expects the division to return to profit in FY12.

But GBST on Friday said that earnings at its Global Broker Services business had been impaired by around $2.3 million worth of restructuring costs and R&D expenses as a result of these efforts. The operating ebitda loss for the unit widened to $2.1 million, from $240,000 in FY10.

Compensating for this was a 25% increase in operating ebitda at the wealth management business to $6.9 million.

The Financial Services business also contributed operating ebitda of $395,000, from just $56,000 in FY10, as a result of the first full year's contribution of a qualitative data services business.

Regarding its outlook for the year ahead, GBST said in a market statement that “despite long investment and sales cycles to begin win clients, [we have] begun to see substantial demand for [our] new products.”

GBT shares stayed unchanged on Friday at $0.890.

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