Temenos raises outlook after bullish Q1; seeks acquisitions

Temenos raises outlook after bullish Q1; seeks acquisitions

Swiss core banking systems vendor Temenos has raised its revenue outlook for 2006 following an upbeat performance in first quarter and says it is also on the look out for acquisitions.

Temenos says first quarter licence revenues exceeded targets to come in at $11.1m, up 16% on Q1 2005. Total reported revenues for Q1 2006 were up five per cent to $36.8m, compared to $34.9m a year ago.

Growth in the first quarter was driven by sales of Temenos' T24 platform - up 64% on a year ago - compensating for the lack of sales for the top-end CoreBanking platform.

Overall, net profit for the quarter was $0.5m, compared to zero in the same period last year. But reported Ebitda for the first three months remained flat at $0.5m.

Looking ahead Temenos says there is increased and robust growth in core spending for retail, universal and private banks on a global basis. As a result the vendor is increasing its license revenues outlook for 2006 to $80-85m, up from from $75-80m. License revenues are now expected to grow by 28% compared to 2005.

The vendor also expects earnings growth for 2006 in excess of 30% compared to 2005.

As well as focusing on growing revenues, Temenos says it is also seeking acquisitions to strengthen its existing core business with new products, a new client base or additional delivery and distribution capabilities. Earlier this year Temenos added a Basel II compliant risk product to its portfolio by acquiring TLC Risk Solutions.

The vendor will fund these transactions either through cash or equity. The company raised $100m in March through a convertible bond offering for this purpose.

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