ASX All Ords stock Bravura Solutions Ltd (ASX: BVS) is the top performing technology share on Friday after the beleaguered company released its full-year FY23 results.
Bravura Solutions is a management software provider in the financial services sector.
The ASX All Ords stock is screaming 26% higher to 63 cents per share at the time of writing.
The Bravura share price opened flat at 50 cents before rising to an intraday high of 65 cents, up 30%.
Meantime, the S&P/ASX 200 Information Technology Index (ASX: XIJ) is down 2.66% for the day.
The S&P/ASX All Ordinaries Index (ASX: XAO) is also down by 0.98% today.
What's most interesting about this ASX All Ords stock's dramatic rise is that it comes on the back of devastating full-year figures, including a massive profit decline.
ASX All Ords stock the No. 1 tech share on Friday
Bravura said revenue headwinds and cost increases led to a significant profit smashing in FY23.
Here are the key points:
- Total revenue $266.6 million, down 6.4% from $249.6 million in the prior corresponding period (pcp) of FY22
- Operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) at a loss of $8.1 million, down from a $45.3 million profit pcp
- Decline in operating EBITDA primarily due to impairment and non-recurring items of $257.7 million
- Net profit after tax (NPAT) at a loss of $280.7 million, down from a profit of $29.9 million pcp
- Adjusted NPAT at a loss of $23.1 million, down from a $25.7 million profit pcp
- Dividends remain suspended.
What else happened in FY23?
In short, it was a year to forget for those invested in this ASX All Ords stock.
In its statement, the company said:
Bravura's trading performance has driven the requirement and urgency for change. This has resulted in a new CEO, Chair and refreshed board joining Bravura in 2HFY23.
FY23 was a year of underperformance and great disappointment for shareholders, and the Company acknowledges it will take time to rebuild trust.
To sum up, the company said its revenue declined due to less project work and upgrades in its wealth management division, and the end of its FA contract in its funds administration business.
Operating expenses rose from $221.3 million to $257.7 million in FY23 due to extra staff recruited for anticipated work that did not materialise, higher overheads, and expenses relating to its cloud migration.
One of the worst days of FY23 was 28 February, when the company requested a voluntary suspension from trading pending an update on its performance, guidance and a possible capital raise.
The ASX All Ords tech stock was frozen at 68.5 cents and fell 50% when trading resumed on 7 March alongside the announcement of a heavily discounted $80 million capital raise.
Bravura said the capital raise would provide cash flow to fund the costs of a company overhaul.
Bravura announced its 'Organisational Change Program' alongside disappointing 1H FY23 results on 6 March that included a net loss of $190.9 million.
The Bravura CEO at the time, Libby Roy, said 1H FY23 was "undoubtedly a difficult period with our performance impacted by a number of operational and market‐related challenges".
The program will target approximately $25 million to $30 million in annualised cost benefits once fully implemented. Bravura expects the program will cost between $19 million to $24 million.
On 19 June 2023, Bravura announced the departure of Roy. Investors appeared supportive of the change, with the ASX All Ords stock rising 2.17% on the day of the news.
The board appointed independent non-executive director Andrew Russell to take over.
Russell was previously CEO of Class Limited before Hub24 Ltd (ASX: HUB) acquired it in 2022.
What did Bravura Solutions management say?
Commenting on the FY23 full-year numbers, Russell provided a very brief statement:
Bravura remains a very good business with great technology customers and people. We are fully committed to rebuilding trust and value to shareholders and customers.
What's next for Bravura Solutions?
Bravura's goal is to achieve a positive cash EBITDA run rate by the end of FY24 with a cash burn of $30 million to $35 million in FY24.
Following the changes to management and the board, Bravura said it now "has the leadership capability to implement the change required to restore value for shareholders and customers".
The company intends to present a three-year strategic plan and FY24 guidance in late October.
Recent history of this ASX All Ords stock
The ASX All Ords tech stock is down 8.7% in 2023 so far and down 54% over the past 12 months.
Meantime, the ASX 200 Info Tech Index is up 33% in 2023 and up 19% over the year.
