GBST posts loss on Syn~ technology R&D costs

ompany looking at its legal options after acqusition plans go astray

Finance industry software provider, GBST Holdings (ASX:GBT), is forecasting a loss of $576,000 for the 12 months to 30 June.

In a statement to the ASX, GBST managing director, Stephen Lake, said the company suffered an impairment charge of $5.5 million as a result of the software development Syn~ technology acquired through the acquisition of Coexis in late 2008 not being as advanced as it had been led to believe.

“GBST is considering its legal options,” Lake said.

The loss is a reversal of fortunes for the company after posting a $2 million after tax profit at the end of the last financial year.

However, the company highlighted an increase in operating EBITDA of 26 per cent year on year to $16.9 million based on unaudited figures.

“A strong second half reflects the confidence returning to the financial services industry and the momentum we are re-establishing in our business after the global financial crisis,” Lake said. “The investment we have made in improving and expanding our operations has contributed significantly to the growth and quality of the company’s earnings.”

Revenue in the Australian Broker Services division was up seven per cent year on year to just over $30.1 million with new client wins and increased trading activity the main drivers.

The Global Broker Services was dragged down to a $403,000 loss as a result of research and development costs associated with the Syn~ technology despite a 36 per cent increase year on year in revenue with the first European clients going live with GMST solutions.

The Australian Wealth Management division successfully deployed the company’s “Composer” solution for two new clients and overall achieved a 49 per cent increase in EBITDA to $5.5 million.

The Financial services unit achieved its maiden profit with revenues of $2.58 million and EBITDA of $31,000.

In a statement to the ASX, GBST managing director, Stephen Lake, said the company suffered an impairment charge of $5.5 million as a result of the software development Syn~ technology acquired through the acquisition of Coexis in late 2008 not being as advanced as it had been led to believe.

“GBST is considering its legal options,” Lake said.

The loss is a reversal of fortunes for the company after posting a $2 million after tax profit at the end of the last financial year.

However, the company highlighted an increase in operating EBITDA of 26 per cent year on year to $16.9 million based on unaudited figures.

“A strong second half reflects the confidence returning to the financial services industry and the momentum we are re-establishing in our business after the global financial crisis,” Lake said. “The investment we have made in improving and expanding our operations has contributed significantly to the growth and quality of the company’s earnings.”

Revenue in the Australian Broker Services division was up seven per cent year on year to just over $30.1 million with new client wins and increased trading activity the main drivers.

The Global Broker Services was dragged down to a $403,000 loss as a result of research and development costs associated with the Syn~ technology despite a 36 per cent increase year on year in revenue with the first European clients going live with GMST solutions.

The Australian Wealth Management division successfully deployed the company’s “Composer” solution for two new clients and overall achieved a 49 per cent increase in EBITDA to $5.5 million.

The Financial services unit achieved its maiden profit with revenues of $2.58 million and EBITDA of $31,000.

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