Finzsoft shares jump to record on first half profit

Shares of Finzsoft Solutions [NZX: FIN] jumped to a record after the financial software developer reported a profitable first half on Friday, and said its board is considering paying an interim dividend for the first time in four years.

The stock rose 42 percent to $4 on trading of just 6,300 shares, and has soared 840 percent this year, valuing the company at $29.3 million.

Finzsoft reported a net profit of $2.02 million, or 23.64 cents per share, in the six months ended Sept. 30, compared to a loss of $63,000, or 0.73 cents, a year earlier, the Auckland-based company said in a statement late Friday. Revenue climbed 87 percent to $7.9 million, helped by growth in the Australian market.

Managing director Andrew Halliday, who owns about 68 percent of the company, said Finzsoft now anticipates materially exceeding previous earnings guidance for a fourfold increase on last year's $755,000 profit, and that based on the forecast and strong result the board expects to pay an interim dividend. The company's directors are meeting in early December to consider the payout.

"As signalled by the board, FY13 and FY14 have been turnaround years for Finzsoft with the new majority shareholder, board and management refocusing the business and securing the company's largest work orders to date," Halliday said. "Sales efforts have delivered a strong order book, and the continued focus on efficiency and on-time, on budget delivery to customers has resulted in profitable growth for Finzsoft, and we are on track to deliver a third year of record growth."

In October Finzsoft signed its biggest ever contract with St George Bank to integrate the auto and equipment finance businesses of Capital Finance Australia which it said would underpin the previous profit guidance. Australia now accounts for about 59 percent of the firm's revenue.

Finzsoft's Australian segment lifted adjusted earnings before interest, tax, depreciation and amortisation to $4.2 million in the six month period from $880,000 a year earlier, on a 306 percent increase in revenue to $4.6 million. The New Zealand segment widened its Ebitda loss to $744,000 in the period from $100,000 a year earlier, on a 6.1 percent increase in revenue to $3.2 million.

The company's hired PwC to help with a strategic review of its capital and ownership structure in October, and is considering ways to improve share trading liquidity to reflect the firm's market opportunities, its research and development over the past 25 years and the value of its intellectual property.

(BusinessDesk)