GFT posts full year results

Source: GFT Technologies

International IT company GFT Technologies AG (GFT) reported its financial figures for the past financial year.

"In 2008 we succeeded in clearly reinforcing our position in the financial sector, despite the difficult environment," announced Ulrich Dietz, Chairman of the Executive Board of GFT. He continued, "to remain competitive in the current economic climate, companies need a flexible and innovative IT partner."

At € 242.2m, the GFT Group's 2008 revenue was just below the level of the successful previous year (€ 247.1m). The Resourcing division, with € 145.7m, and Services, with € 90.9m, made the greatest contributions here. Earnings before taxes (EBT) came to € 6.9m (prev. year € 12.4m). Significant investments in marketing and sales for the introduction of the archiving solution inboxx contributed significantly to the decline in earnings. Against the background of the turbulence in the financial markets, the GFT Executive Board had lowered the full year forecast to € 240m in revenue and € 6m in earnings before taxes during the course of the year. "In the fourth quarter, the effects of the crisis in the financial services area opened up interesting possibilities for us," says Ulrich Dietz. "Through our pragmatic IT solutions we managed to secure opportunities and as a result, at the end of the year we were able to outdo the modified forecast."

First distribution of dividends in company history

For the first time in company history, GFT intends to pay out a dividend. The ongoing good earnings situation and solid liquidity permit distribution, is to be retained should business continue to be good in the future. The Executive Board proposes to the Supervisory Board that a dividend of € 0.10 per share be distributed for the 2008 financial year.

Well-positioned for future economic developments

Ulrich Dietz explained: "For us, the fact that we have been able to successfully hold our own in the current recession has been a confirmation of our strategy of risk distribution across three business divisions. We are well-positioned to exploit the opportunities in the crisis with our offering in the Services, Resourcing and Software divisions. We support banks particularly by means of IT-based risk management systems; in addition, our customers benefit from the flexible use of external IT specialists, whom we refer quickly and promptly, as well as from our comprehensive archiving solutions. With our flexible and innovative range of services, we are also prepared for volatile economic developments in 2009."

The uncertain world economic conditions render a reliable assessment of likely business development difficult. However, the Executive Board expects conditions to remain challenging. Based on the current outlook, GFT Group expects for the financial year 2009 revenue at the level of the previous year and earnings before taxes of € 6m to 8m are expected.

Additional key data

In 2008, the GFT Group generated the most revenue in the Resourcing division. At € 145.7m the previous year's figure (€ 140.4m) was exceeded by four percent and made up 60 percent of overall revenues (previous year: 57 percent). The Resource Management sector grew by 24 percent and managed to more than make up for the slight decline in Third Party Management. The current economic conditions led to greater price sensitivity among the clients in hiring freelancers. Despite the decline in revenue, earnings of the Resourcing segment were with € 3.4m almost at previous year's level (€ 3.5m).

In the Services division GFT achieved revenues of € 90.9m (prev. year: € 100.8m). The decline of almost ten percent compared to the previous year, is attributed to the overall difficult conditions in the financial sector and the completion of a project in Brazil, where, in the previous year, it had been possible to generate additional revenue. This influenced division earnings, which consequently declined from € 10.3m to € 7.1m.

Business with archiving solutions in the Software division remained below expectations in the 2008 financial year. Subdued customer demand in all industries was clearly noticeable in the Software segment. Revenues fell from € 5.9m in the previous year to € 5.6m. Due to investments in the further development and sale of the archiving solution inboxx, earnings declined from € -0.6m to € -3.1m. In a more positive market environment GFT would expect much better sales success for this solution.

Both revenue as well as pre-tax earnings per quarter, rose continuously in the course of 2008. In the fourth quarter of 2008, the GFT Group generated revenues of € 64.8m. Earnings before taxes were €2.6m, which corresponded to 38 percent of the overall amount of 2008.

On 31 December 2008, the GFT Group employed a total of 1,027 employees, 70 percent of these outside Germany. The reduction by 60 people compared to the year end of 2007 is mainly due to the sale of shares in the Indian subsidiary. In the previous year, 56 employees worked here.

The company had cash and cash equivalents of € 35.2m on 31 December 2008, € 6.5m more than at the same point of time in the previous year (€ 28.7m). Net income at € 6.0m was below the previous year's figure (€ 8.6m). Accordingly, earnings per share were € 0.23 following € 0.33 at the end of 2007.

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