Shares in Bravura Solutions Ltd (ASX: BVS) are plunging today after the company released its interim report and financial results for the half-year ended 31 December 2021.
At the time of writing, the Bravura share price is trading deep in the red at $1.56 apiece, down 17.7%, after releasing its earnings.
Bravura share price slumps amid earnings growth
Key takeouts from the wealth management company's earnings results today include:
- Revenue was up 14% to A$132.3 million, a gain from A$115.7 million in 1H21)
- Earnings before interest, tax, depreciation and amortisation (EBITDA) was 61% higher to A$25.3 million
- net profit after tax (NPAT)also up 69% to A$15.3 million
- EBITDA margin increased to 19% compared to 14% the same time last year
- First half earnings per share (EPS) up 68% to 6.2 cents per share
- Unfranked interim dividend declared of 3.7 cents per share
- Dividend payout ratio totalling 60% of 1H22 NPAT.
What else happened this half for Bravura?
In its release today, Bravura said it had seen developments in key markets, particularly the Superannuation Fund Consolidation. The company highlighted a "vertical integration leading to value chain disruption", and a greater need to improve the digital experiences of customers.
From its efforts this half, Bravura grew revenue by 14% to $132 million with EBITDA and NPAT expanding substantially by 61% and 69% respectively.
Meanwhile, revenue from wealth management was also happy and grew 10%. As a result, the group's EBITDA margin decreased by 100 basis points to 24% this half.
In the same breath, funds administration division revenue grew by 23%, and EBITDA margin widened by 9 percentage points to 51%.
"Included in the funds administration revenue was the licence associated with a major contract renewal," Bravura said.
With the growth at the top, Bravura carried this through to EPS of 6.2 cents – up almost 70% year on year – and declared a 3.7 cents per share on a payout ratio of 60% of NPAT.
Bravura also noted in its release today that it "continues to evaluate a pipeline of additional acquisitive and organic growth opportunities".
Management commentary
Speaking on the group's performance, Bravura CEO Nick Parsons said:
Bravura's 1H22 results are encouraging and the return to both revenue and EBITDA growth is very welcome. We are beginning to see the positive effects of our strategic investments.
We continue to sell and deploy our new solutions, which together with increasing economic activity as our core markets emerge from COVID-19, makes us optimistic for future growth.
What's next for Bravura?
The company expects revenue growth to continue throughout 2H22, resulting in "full-year revenue growth in excess of 10% against FY21".
It also noted that "some opportunities are shifting to FY23", and that operating costs are increasing at a similar rate to revenue.
As such, management guides that FY22 EBITDA will be in the range of $45 million to $50 million and the revised guidance for FY22 NPAT "to be in the range of $25 million to $30 million, below previous guidance provided at the November 2021 AGM".
Bravura share price snapshot
In the past 12 months, the Bravura share price has plummeted more than 46% and is down almost 36% this year to date.
