Finzsoft sinks into the red as first-half revenue tumbles 28%
By Paul McBeth
March 2 (BusinessDesk) - Finzsoft Solutions sank into the red in the first half as revenue dropped by almost a third, saying the timing of its licence fees is variable and that it continues to trade well.
The Auckland-based financial service software developer, controlled by Singapore-listed Silverlake Axis Group, reported a loss of $358,000, or 4.06 cents per share, in the six months ended Dec. 31, compared to a profit of $2 million, or 22.12 cents, a year earlier. Revenue dropped 28 percent to $7.4 million, while costs gained 3.4 percent to $7.9 million, including an 83 percent increase in legal fees to $457,000 and a 54 percent rise in consultancy fees to $418,000.
"Finzsoft continues to trade well and has invested heavily in new business models to support its leading position as the next generation connected core, digital and SaaS banking and financial institution software, and the expansion into Asean markets," managing director Andrew Holliday and chair Brent Impey said in a statement. "Based on current contracted revenue, along with our pipeline opportunities, we will expect to see Finzsoft operate profitably with no debt and positive cash flow."
The company signed a five-year deal with IT services firm Datacom in December, where Finzsoft transferred staff from its services unit to Datacom, who would then provide group software and support to Finzsoft.
The software developer's operating cashflow shrank to $591,000 in the half from $3.8 million a year earlier, and after a $506,000 outflow from investing activities, Finzsoft held cash and equivalents of $2.5 million as at Dec. 31.
In November, Finzsoft signalled plans to raise new capital to help cover expanding in Australia and across Asia, but didn't provide an update today on its funding plans.
The NZX-listed shares, of which a joint venture between Silverlake and Andrew Holliday own 85 percent, trade infrequently and were last at $2.54.