Software provider Bravura Solutions Ltd (ASX: BVS) share price is up 7% to $4.83 in Tuesday trade. Bravura shares have been volatile following the release of the company's full-year result last Friday. After hitting an intra-day high of $5.23 on Friday, the share price fell to a low of $4.13 before recovering to close down 2% at $4.60.
FY19 result beats analysts' expectations
Bravura reported another solid operational performance for the financial year ended 30 June 2019. Group revenue increased 16% to $257.7 million, narrowly beating the consensus estimate of $255.8 million.
Group earnings before interest, tax, depreciation and amortisation (EBITDA) margin increased by 160 basis points to 19.0%. As a result, the business' operating leverage expanded with group EBITDA rising 27% to $49.1 million. For FY19 Bravura reported a 19% increase in earnings per share to 15.0 cents. This was slightly ahead of the consensus estimate of 14.8 cents.
The FY19 result was driven by strong growth across the Bravura product suite. The Wealth Management segment reported a 14% increase in revenue to $176.8 million and segment EBITDA rose 17% to $53.9 million. The company's flagship solution, Sonata, now makes up almost all of the Wealth Management segment.
The standout performer, however, was Bravura's Funds Administration segment which reported a 22% increase in revenue to $80.9 million. Segment EBITDA rose 21% to $32.3 million after benefitting from increased implementation and project work from a renewed and enhanced contract with a major global client and improved utilisation from existing clientele.
Outlook
Management expects FY20 net profit after tax to grow in the mid-teens as a result of Bravura's strong recurring revenue (76% of total revenue in FY19) and new sales opportunities.
Bravura also announced on Friday that it will acquire Midwinter Financial Services for $50 million. Midwinter's financial planning software, AdviceOS, is expected to complement Bravura's existing product suite in an adjacent market with attractive growth prospects. The software "powers back office administration for financial advisers and drives online self-directed digital advice portals for superannuation funds in Australia." The acquisition is projected to be earnings per share accretive in the first year of ownership.
Further acquisitions are likely in the future with Bravura holding $194.8 million in cash at the end of June.
Other notable risers on the ASX today include Nanosonics Ltd (ASX: NAN) which is up 30% and Afterpay Touch Group Ltd (ASX: APT) which is up 7%.
