Bravura Solutions Limited (ASX: BVS) belongs to Australia’s information technology sector and is a market leading provider of enterprise software and SaaS to wealth management clients, life insurance administration as well as funds administration industries.
On 30 April 2019, Bravura Solutions Limited released its investor presentation on ASX. In the presentation, the company had provided its segment overview which consists of Wealth Management and Funds Administration. The wealth management segment contributes 71% of the revenue whereas the funds administration segment contributes 29% of the revenue. The EBITDA contribution through the Wealth Management segment is of 68% whereas the funds administration segment has 32% EBITDA contribution.
Under the Wealth management segment, the company has 64 clients with 13 clients under the fund administration segment.
Overall, the company has earned A$246 million over last year with 5-year Revenue CAGR of 12% and ROE of 28%.
In 1H FY2019, the company had generated A$127.4 million, up by 23.8% as compared to the previous corresponding period. At the same time, there was also a strong EBITDA growth of 28.64% to A$23.8 million. The EBITDA margin and ROA stood at 19% and 22% respectively.
Next, the company also highlighted its flagship product Sonata. Sonata is essential software for financial institutions for managing a wide range of financial products. Sonata allows the front office to originate as well as distribute financial products. The middle office can assess risk and based on the risk they can align the product strategy to the broader group. For Back office operations, Sonata helps in processing customer transaction, reporting and correspondence. Sonata also helps in simplifying the legacy client system.
The company also highlighted that in the first half of FY2019, new clients were added, and the existing client had broadened their use of functionality, supported by the long-term nature of client contracts with the company. As a result, the recurring revenue in the 1H FY2019 increased by 31% as compared to the previous corresponding period. The source of recurring revenue consists of maintenance, managed services, and in-production professional services from ongoing client demand.
The implementation fee consists of professional services from initial implementation and development requirements. The licence fee earned on a one-off or recurring basis.
The presentation also highlighted the growth drivers of the company along with the execution of the growth drivers.
The company is enthusiastically exploring a number of growth opportunities for expanding into the adjacent market in the existing geographies along with new or existing markets in new geographies.
In FY2019, the FY2019 includes the strong sales pipeline, increased scale driving operating leverage and FY19 earnings guidance for EPS growth in the mid to high-teens which the company re-affirmed.
On 12 April 2019, the company announced that it had submitted an indicative proposal to acquire all shares in GBST Holding Limited.
The shares of BVS have generated a decent YTD return of 47.11%. At present, the shares of BVS are trading at A$5.730 (AEST: 3:45 pm, 30 April 2019), up by 2.5% as compared to its previous closing price. BVS holds a market capitalization of 1.2 billion and approximately 214.48 million outstanding shares.
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