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CORRECT: Finzsoft shares soar to record on new deal

CORRECT: Finzsoft shares soar to record after signalling fourfold earnings boost

(Fixes relationship with St George in lead, updates share price in 2nd graph, valuation in 4th graph)

By Paul McBeth

Oct. 2 (BusinessDesk) - Shares of Finzsoft Solutions soared to a record a day after the financial software developer said annual earnings would likely grow fourfold after the firm signed its biggest contract with Australian customer St George Bank.

The stock jumped 46 percent to a record $2.54, adding to yesterday's 24 percent gain, though only 9,400 shares of the 8.3 million on issue changed hands today, and 10,500 were traded yesterday.

Finzsoft managing director Andrew Holliday, who owns about 68 percent of the company, said yesterday the St George work order to integrate the auto and equipment finance businesses of Capital Finance Australia would underpin "forecast earnings at four times last year's profit result" of $755,000 in the 12 months ended March 31. That forecast didn't include expected gains from the $1.9 million cash-and-scrip acquisition of Sush Global Solutions, which develops mobile apps.

Before yesterday's announcement, the stock traded at $1.40, valuing the company at $11.6 million, a level chairman Brent Impey said the board believes didn't reflect the "intrinsic value of the company." At today's share price, Finzsoft is valued at $21.1 million.

The company has also embarked on a strategic review of its capital and ownership structure, hiring PwC to assist with the process, it said in yesterday's statement.

Impey said the review will consider initiatives to improve the capital structure and share trading liquidity "to more appropriately reflect current and future opportunities, the company's investment in R&D over 25 years and the value of its IP (intellectual property)."

The review had the backing of its majority shareholder, and is expected to be completed before the end of the year, Impey said.

(BusinessDesk)

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