Share Crash! Here’s why GBST Holdings Limited tanked today

Credit: Alex Proimos

Shares in GBST Holdings Limited (ASX: GBT) have slumped around 7% today after the provider of client accounting and securities technology solutions reported an interim profit result which underwhelmed the market.

Here’s what the company has just reported:

  • Revenue increased 2% to $56.7 million
  • Operating earnings before interest, tax, depreciation and amortisation (EBITDA) came in at the upper end of guidance at $8.5 million, but this still represented a 31% decline on the prior corresponding period (pcp)
  • Adjusted net profit after tax and adjusted earnings per share both fell 51% to $4.4 million and 6.5 cents per share (cps) respectively
  • A bright spot was the dividend. Shareholders are set to receive a fully franked interim dividend of 5.5 cps which equates to a 10% increase on the pcp. GBST’s shares will trade ex-dividend on April 6; payment is due on April 21.


While peers Class Ltd (ASX: CL1) and Link Administration Holdings Ltd (ASX: LNK) can boast of share prices near record highs, GBST’s share price is trading at close to a 52-week low.

Despite the share price weakness, today’s results don’t immediately suggest value has emerged in the stock, however, there is definitely the potential for a re-rating if the group, under the guidance of its recently appointed Managing Director Mr Robert De Dominicis can steady the business and set it firmly back on a growth path.

For the second half, the company has provided guidance for EBITDA in the range of $12 million to $14 million which represents a large increase on the first half.

With the company stating that “GBST’s global growth strategy continues with a disciplined focus on immediate market opportunities. Through its new-generation suite of digital platforms, the company has significant new business opportunities in the UK, Australia and New Zealand, and Asia.” This stock would appear to be one for the watch list.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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