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GFT Group exceeds 2013 revenue and earnings targets: pre-tax earnings up 45 percent
Consolidated revenue up 15 percent to EUR 264.29 million / GFT division raises revenue by 44 percent / Dividend increase to EUR 0.20 per share proposed
The GFT Group comprises the two operating divisions GFT (formerly GFT Solutions) and emagine. Dedicated to delivering IT solutions for the finance sector, the GFT division posted revenue growth of 44 percent to EUR 174.04 million (prev. year: EUR 121.05 million). Adjusted for the revenue contribution of Sempla totalling EUR 21.77 million, GFT posted organic growth of 26 percent. This positive trend was mainly driven by the division's IT solutions for investment banking and its compliance solutions for growing regulatory requirements in the finance sector. Project business relating to the introduction of the Single Euro Payment Area (SEPA) also played a key role in driving growth. The company's German and UK operations posted particularly strong revenue increases.
The earnings contribution of the GFT division rose by 53 percent to EUR 19.63 million (prev. year: EUR 12.86 million) with a corresponding improvement in the operating margin to 11.3 percent (prev. year: 10.6 percent). Increased capacity utilisation and an adjustment of the remaining purchase price for Asymo AG were chiefly responsible for the disproportionately strong increase in earnings compared to revenue. "We steadily improved our performance in the GFT division over the year, enabling us to exceed even the upgraded revenue and earnings targets from mid year," says Ulrich Dietz, CEO of GFT Technologies AG.
On the UK success, GFT UK's Managing Director, Christopher Ortiz expanded: "GFT UK saw amazing growth in the areas of regulatory and big data projects in the Capital Markets space in 2013. But the work is just beginning with 2014 continuing the strong growth and need for expert business and IT consulting services."
With its services for the staffing of technology projects, the emagine division posted revenue of EUR 90.23 million - 18 percent down on the previous year (EUR 109.54 million). This decline in revenue resulted mainly from the planned discontinuation of its low-margin Third Party Management (TPM) business. As a result, the TPM business contributed just EUR 3.46 million (prev. year: EUR 18.57 million) to segment revenue. Segment earnings of the emagine division were burdened by expenses for its realignment, especially in the first six months. Following an upturn in the third quarter, the division was able to achieve full-year earnings of EUR 1.06 million (prev. year: EUR 2.32 million).
GFT Group improves EBITDA by 53 percent
Earnings before interest, taxes, depreciation and amortisation (EBITDA) of the GFT Group rose by 53 percent to EUR 20.49 million (prev. year: EUR 13.35 million). The EBITDA result includes tax-free income of EUR 2.42 million from expected remaining purchase prices (prev. year: EUR 2.63 million) for an acquisition in 2011. Earnings before taxes (EBT) amounted to EUR 17.52 million and were thus 45 percent up on the previous year (EUR 12.11 million). The operating margin before taxes improved by 1.4 percent points, from 5.2 percent in the previous year to 6.6 percent. In the past financial year, the GFT Group generated net income of EUR 13.63 million, corresponding to year-on-year growth of 63 percent (EUR 8.34 million). Undiluted earnings per share amounted to EUR 0.52 in 2013 (prev. year: EUR 0.32). The calculated tax ratio was 22 percent, compared to 31 percent in the previous year.
Headcount grows by 52 percent to 2,111
Due to the positive development of business and high utilisation of capacity, headcount at the Spanish development centres was increased by 19 percent to 1,046 during the reporting period. The acquisition of Sempla raised headcount in the GFT division to 1,968 (prev. year: 1,239). All in all, the number of full-time staff employed by the GFT Group increased by 52 percent to 2,111 (prev. year: 1,386) as of 31 December 2013.
In view of the encouraging development of business, the Executive Board will recommend that the Supervisory Board proposes an increase in the dividend for 2013 of 33 percent to EUR 0.20 (prev. year: 0.15 Euro) per share at the Annual General Meeting on 27 May 2014. This would correspond to a total dividend payout of EUR 5.27 million (prev. year: EUR 3.95 million).
Additional key data
In the fourth quarter of 2013, the GFT Group generated revenue of EUR 78.85 million (prev. year: EUR 56.08 million) and pre-tax earnings of EUR 6.31 million (prev. year: EUR 4.31 million). On 31 December 2013, the GFT Group had cash and cash equivalents of EUR 48.62 million (prev. year: EUR 40.42 million) and EUR 20.88 million after deduction of financial liabilities (prev. year: EUR 40.42 million).
The GFT Group expects business to make further progress in 2014 and anticipates year-on-year revenue growth of 17 percent to EUR 310 million. The Executive Board expects pre-tax earnings (EBT) to improve to EUR 23 million with an increase in EBITDA to EUR 28 million.
Detailed financial figures are available in the Investor Relations section of the GFT website at http://www.gft.com/ir.
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