SINGAPORE (Aug 25): Silverlake Axis, the software provider to financial institutions, announced FY17 earnings more than trebled to RM846 million ($269.3 million) from RM273.8 million in FY16.
The stronger bottomline came on the back of a one-off gain of RM480.4 million from the group’s disposal of 34.9 million shares in Global Infotech.
To return a portion of the gains from the sale to shareholders, Silverlake Axis has proposed a final and special dividend of 0.3 cent and 1 cent respectively.
Group revenue for FY17 decreased 20% to RM506.4 million compared to RM636.3 million in the previous year due to challenging business conditions as customers deferred and reduced IT capital expenditures amid uncertainties in the regional economies.
In turn, lower value of project-related revenue was booked during the year although this was moderated by higher contributions from the recurrent revenue segments which continued to grow in FY17.
As a result, group gross profit declined 28% to RM277.2 million from RM383.9 million last year.
Administrative expenses increased 26% to RM103.8 million due to additional expenses from the consolidation of Symmetri Group's full-year results, higher charge on share awards granted under Silverlake Axis’ performance share plan in FY17 and an increase in staff-related costs.
This was partially offset by the non-recurring professional fees incurred for special independent review on interested person transactions and acquisitions in FY16.
The group reduced its stake in Global Infotech to 9.24% from 20.01% and raised about RM502.8 million in proceeds after capital gains tax.
The majority of the proceeds are expected to be repatriated from China in FY18 and will deploy it towards payment of special dividends as well as acquisitions.
This will help the group expand its portfolio of Fintech and Insuretech software products and services to address the growing demand for transformational digital banking and insurance offerings.
Raymond Kwong, Managing Director of Silverlake Axis, says, “Since the beginning of the year, we have been more active in responding to requests for proposals and is engaging existing and potential customers for core IT replacements and digital banking upgrades.”
The group expects customers to start prioritising IT capital expenditures for digital banking which will likely to benefit from higher demand for project related services.
Shares in Silverlake Axis closed at 60 cents on Friday.
