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Cuscal broadening customer base, ready for growth
15th August, 2007
Cuscal Limited has reported a steady financial result for the year to June 30, 2007 by consolidating and growing its customer base and locking in the record increase in operating profit in the previous year.
Cuscal, the leading provider of wholesale and transactional banking services to over 150 retail financial institutions, today announced a modest increase in net operating profit to $17.7m, coming off the back of a 25% increase in operating profit in the year to June 30 2006.
A final dividend of 4.0 cents per share is to be paid to Cuscal's shareholders, bringing total dividends paid for the year to 7.5 cents. Return on equity has increased from 9.9% in 2006 to 10.2% in 2007.
| Full Year Results | 2005$m | 2006$m | 2007$m | Change 06-07$m |
| Operating profit before tax | 20.7 | 25.1 | 25.5 | 0.4 |
| Tax expense | (6.6) | (7.5) | (7.8) | (0.3) |
| Operating profit after tax | 14.1 | 17.6 | 17.7 | 0.1 |
| Significant items after tax(1) | - | 2.4 | - | - |
| Total profit after tax | 14.1 | 20.0 | 17.7 | (2.3) |
(1) The result for 2006 includes a $2.4m post-tax gain on the settlement of a warranty claim in respect of the sale of Bridges Financial Services.
Cuscal CEO, John Gilbert, said operating performance was impacted by non-recurring costs associated with strategic initiatives as Cuscal widens its revenue base.
"Restructuring the business and re-negotiating long term contracts on behalf of our existing customers has required that Cuscal spend money to build a platform for future growth."
"Those investments have been made without impacting the dividends we are paying our shareholders and, although only a modest increase, Cuscal has in fact achieved another record profit in 2007 - and met all of its major financial and operational objectives for the year," Mr Gilbert said.
"Strong discipline in managing underlying costs has meant that the ROE continues to be strong, and Cuscal's dividend yield is very impressive at 12.5%."
Mr Gilbert said Cuscal has a strong history of providing quality products and services to Australia's credit union industry and has been very successful over the last 12 months in broadening its offerings to other markets.
"We've now branched out to specialist ADIs, finance companies and mortgage managers. Our capacity to deliver and tailor solutions has been well received by these new customers."
Broadening its market is built on solid foundations whereby Cuscal this year secured five-year transactional banking service agreements with its credit union customers.
All 117 credit unions that had committed to being a part of Cuscal's buying group for transactional banking services executed contracts with Cuscal until 2012.
"That achievement gave us a tremendous platform to deliver on Cuscal's business plans and further extend our reach into new markets," said Mr Gilbert.
"Securing these agreements represents a great endorsement of Cuscal's aggregation model and approach to partnering with customers and suppliers."
For further details, see www.cuscal.com.au
Ends