Rubik financial half-year results

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Financial services software company Rubik Financial Limited (ASX: RFL) has released its reporting results for the half year period ended 31 December 2014.

Highlights include:

  • Group revenue up 33% to $19.8m (H1 FY14: $14.9m)
  • Recurring revenue up by 43% to $16.0m (H1 FY14 $11.2m)
  • Segment profits at $4.1m (HY FY14: $5.5m)
  • Underlying EBITDA at $2.2m (HY FY14: $4.2m)

Craig Coleman, Rubik Chairman, said that with the appointment of Iain Dunstan to the CEO role and a new management team in place, the focus for the business for the remainder of FY15 and FY16 will be firmly on integrating recent acquisitions and building on the solid level of recurring revenues in place.

Mr Coleman also confirmed Iain Dunstan as the permanent CEO of the company, following his interim appointment in late January.

“The Rubik Board is confident that the strategic direction of the business will be ably implemented by Rubik’s high calibre executive management team under Iain’s capable leadership,” he said.

Mr Dunstan said his focus was on continuing to invest in the group’s existing products, including the completion of integration projects currently underway, as well as continuing client growth.

“Rubik has made solid investments in business acquisitions and new staff over the past two years. My main focus will be on ensuring these acquired businesses are fully integrated within the Rubik group and, as planned projects come on-line, the results will be seen in the next financial year.

“Pleasingly, client retention remains strong, and total client numbers continue to grow across the business.” Mr Dunstan said.

The growth in group revenue was due largely to the contributions of the acquired businesses, particularly the mortgage segment. Revenues were also positively impacted by the growth in hosting income compared to the prior corresponding period.

Segment profits were down, primarily as a result of increased employment costs as a result of business acquisitions, an investment in delivery and sales staff and the build out of the senior management team. There have also been increased costs due to the delay in the establishment of the proposed offshore development centre. Hosting fees increased as a result of Rubik moving to cloud-based delivery for the majority of its users.

Mr Coleman said that, over the medium term, Rubik management will be focussing on a number of key areas.

“These include: retaining the group’s recurring revenue base; improving EBITDA margins; and growing top line revenues through increased product penetration in to existing clients.

“We anticipate an improvement in earnings as Rubik consolidates the strategic achievements of the last year, and builds on this solid basis to become an even more successful technology company for its clients in the financial services industry,” Mr Coleman said.

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About Rubik:

Rubik provides software for the financial services sector, including financial planning software, mortgage software, core banking systems and other banking systems.