Adjusted for the planned reduction in revenue from Third Party Management business of EUR 4.25 million, core business grew by 4 percent. Pre-tax earnings (EBT) improved by 22 percent to EUR 1.55 million (prev. year: EUR 1.27 million).

"In the first quarter, we raised revenue in our core business and achieved a year-on-year improvement in earnings," states GFT's CEO Ulrich Dietz. "We were able to expand our market position with IT solutions for the finance sector. We will continue to implement the realignment of our emagine division - with which we help companies staff their technology projects - and expect a variety of factors to drive growth in 2013," says Ulrich Dietz.

Christopher Ortiz, Managing Director of GFT UK explains "the UK has seen steady growth in Q1 in response to demand from the financial services sector. We are able to provide an effective combination of investment banking experience and work-force flexibility, in order to meet requirements caused by new regulatory environments and efforts to reduce risk. Our combination of knowledgeable consultants in London and Barcelona means that we can quickly provide the right experience, helping our clients to grow and innovate".

Revenue: solid growth in core business

Dedicated to delivering IT solutions for the finance sector, the GFT Solutions division raised revenues by 6 percent to EUR 32.40 million (prev. year: EUR 30.49 million) in the reporting period. This positive development of revenues was based on stable sales of IT solutions for the core banking systems of international financial institutes as well as growing demand for outsourcing services and compliance solutions. Growth rates were particularly high in the regions Germany and the UK. The division's share of consolidated revenue rose to 58 percent (prev. year: 53 percent).

The emagine division posted revenue of EUR 23.09 million - 15 percent down on the previous year (EUR 27.16 million). Although activities involved with helping companies staff technology projects achieved slight revenue growth to EUR 22.45 million (prev. year: EUR 21.93 million), the division's Third Party Management business only contributed EUR 0.64 million to segment revenue (prev. year: EUR 5.23 million). In 2013, the planned reduction in revenue from this low-margin business will amount to around EUR 15 million. The emagine division's share of consolidated revenue fell to 42 percent (prev. year: 47 percent).

EBT: consolidated result up 22 percent to EUR 1.55 million

The GFT Group posted pre-tax earnings of EUR 1.55 million in the first quarter, corresponding to year-on-year growth of 22 percent (EUR 1.27 million). This figure includes expenses of EUR 0.77 million (prev. year: EUR 1.25 million) for the CODE_n innovation drive, which was once again one of the highlights of the CeBIT fair in March 2013.

The development of earnings in the GFT Solutions segment had a positive impact on the consolidated result. Due to margin effects and high capacity utilisation, the segment's contribution to earnings rose by 33 percent to EUR 2.41 million (prev. year: EUR 1.81 million) with an operating margin of 7.4 percent (prev. year: 5.9 percent). Earnings of the emagine division were burdened by expenses involved with its realignment and amounted to EUR 0.10 million after the first three months (prev. year: EUR 0.68 million).

Other key figures: solid balance sheet structure; headcount increased

In the first quarter of 2013, net income of the GFT Group was up 83 percent on the previous year at EUR 1.14 million (prev. year: EUR 0.63 million). This strong increase resulted from an improved operating margin and a reduction in the calculated tax ratio to 26 percent (prev. year: 51 percent) due to a more balanced distribution of earnings among the national companies. Earnings per share improved to EUR 0.04 (prev. year: EUR 0.02). As of 31 March 2013, cash, cash equivalents and securities amounted to EUR 29.76 million (prev. year: EUR 27.52 million). The equity ratio stood at 60 percent at the end of the first quarter, compared to 59 percent as of 31 December 2012. Due in particular to the strong project position of the GFT Solutions division, headcount increased by 8 percent to 1,457 persons (prev. year: 1,346). As of the reporting date, 279 people were employed in Germany (prev. year: 275).

Outlook

Following the scheduled progress of business in the first quarter, the Executive Board expects the GFT Group to make good overall progress in the months ahead. The emagine division will continue to drive its realignment as an expert for staffing technology projects with specialists. The planned reduction of revenue of around EUR 15 million due to the gradual withdrawal from Third Party Management business is to be offset over the year by organic growth in other divisions.

In the GFT Solutions segment, the company expects further growing demand for IT solutions to optimise core banking systems - especially in view of the need to adapt to new regulatory requirements, such as the introduction of a Single Euro Payments Area (SEPA) by February 2014. GFT expects further growth to result from rising investments in innovative solutions for mobile business.

As a result of healthy growth prospects for the GFT Solutions division, the Executive Board continues to forecast an increase in revenue of 3 percent to EUR 238 million with pre-tax earnings of EUR 12 to EUR 13 million for the GFT Group in 2013 as a whole. With a clear profile and focus on innovations, the Group expects to achieve sustainable growth with rising profitability in the coming years.