Wameja Di Regulatory News (WJA)

26 May 2009 07:00

25 May, 2009

eServGlobal Limited

("eServGlobal" or "the Company")

Update on Outlook

eServGlobal Limited (LSE: ESG & ASX: ESV), a provider of end-to-end solutions, enabling smart communication and payment services for service providers on any generation network, today provides an update on the company's financial outlook for the current financial year.

Updated guidance for the full year ending 30 June, 2009.

The Company now expects to report full year revenue in the range AUD$150 - 155million, compared to AUD$177.9m in the corresponding period in 2008 and AUD$153m in 2007, a creditable performance given the challenging conditions in the global telecoms industry. 

The Company has expanded its restructuring program with the aim of increasing the EBITDA margin in the 2010 fiscal year. Total headcount at 30 June 2009 will have been reduced by 13% from 31 December 2008, which is expected to result in an annualised cost saving of approximately AUD$10m.  The full cost of the restructuring will be accrued in FY09 and is expected to be up to AUD$6m. Combined with the revenue outlook, this is expected to result in a full year EBITDA of AUD$3million before exceptional restructuring costs (an EBITDA loss of up to AUD$3million after restructuring costs). 

Mr. Ian Buddery, Executive Chairman of eServGlobal, said: "Market conditions have continued to be difficult and telecoms operators are postponing investment in network capacity. Therefore, we have increased our focus on new opportunities for our charging and payment solutions. As a result, securing four new customers in the second half, compared with two in the first half, a very encouraging trend which gives us confidence in our carefully considered revenue plan for FY10. 

"Our confidence in the potential of our international mobile remittance platform, HomeSend, is reinforced by the commercial trials for the service now under way with significant operators, for both North African and Asian payment corridors. 

"The restructuring and rationalisation of product platforms in FY09 will enable us to generate more revenue from a reduced cost base in coming years, whilst reducing the cost of implementation and support. eServGlobal continues to have no debt, strong cash reserves and a strong pipeline of organic growth opportunities."

For further information:

Cautionary Statements 

Statements in this announcement expressing the beliefs and expectations of management regarding future performance are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on management's expectations as of the date of this document and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to risks and uncertainties including, but not limited to, uncertainty in communications spending, the implementation of the Company's solutions strategy, six-monthly fluctuations in financial results, the Company's ability to exploit fully the value of its technology and its strategic partnerships and alliances, the availability of products from product component vendors and other risks. In addition, while management may elect to update forward-looking statements at some point in the future, management specifically disclaims any obligation to do so, even if its estimates change. Any reference to our website in this announcement is not intended to incorporate the contents thereof into this announcement or any other public announcement.