Statement re FY2010 Trading Update

 

TIDMESG 
 
RNS Number : 6136C 
eServGlobal Limited 
17 November 2009 
 

 
 
eServGlobal: Trading Update 
Sydney: 17 November 2009 
eServGlobal Limited (ASX: ESV & LSE: ESG) (eSG), a specialised supplier of 
large-scale telecoms network software and services to telecoms carriers around 
the world, today updates the market on expected outturn for the year ending 30 
June 2010. Based on trading so far this year and the board's view on the current 
level of orders/demand, the board expects an increased full year EBITDA 
(Earnings Before Interest, Taxation, Depreciation and Amortisation and before 
exceptional items) result, despite reduced turnover and challenging global 
market conditions. 
Since its appointment at the commencement of this financial year, the new 
management team has conducted a thorough review of the business and is well 
advanced in developing the company's strategy and market positioning. The 
hallmarks of this strategy relate to a resolute focus on eSG's customers and 
their needs, rationalisation and careful management of the company's cost 
structure and focused product development to ensure eSG is well positioned to 
benefit from a gradual return to past levels of global communication spending, 
which is not expected to occur until 2010/2011. 
In the course of 2009, management has taken positive action and downsized the 
business by more than 100 full time employees. In combination with a significant 
reduction in contractors' costs and a continued focus on variable cost 
reduction, the company now expects total operational costs for FY2010 of 
AUD$103.6m (FY2009: AUD$144.3m), a reduction of AUD$40.7m (28%) from the 
previous year. 
As a result of this significant reduction in costs, the company expects to 
achieve FY2010 EBITDA (before non-recurring restructuring charges) in the range 
of AUD$8m to AUD$12m (FY2009: AUD$2.4m). 
This operating result is based on achieving turnover of between AUD$110m and 
AUD$120m (FY2009: AUD$147.2m). Due to market weakness, revenues for the six 
months to 31 December 2009 are expected to be above AUD$40m with the second half 
delivering above AUD$70m, demonstrating the returning strength of the business 
due to initiatives implemented by the new management team during the current 
half year. 
Consequently, the company expects a first half FY2010 EBITDA loss (before 
non-recurring restructuring charges) of between AUD$7m to AUD$9m (First half 
FY2009: EBITDA profit of AUD$7m), while the second half is expected to achieve 
positive EBITDA of AUD$17m to AUD$19m (Second half FY2009: EBITDA loss of 
AUD$12.3m). 
 
 
The company expects to incur a restructuring charge of approximately AUD$5m in 
FY2010. 
The company's Chairman, David Smart said: "The board is very pleased with the 
successful restructuring of the business for the current market conditions and 
the positive momentum achieved by the new management team in a short period of 
time. eServGlobal is very well positioned to meet the challenges of the current 
environment and capitalise on opportunities for growth which will be driven by 
both continuing subscriber growth and the uptake of new mobile services. " 
 
 
About eServGlobal 
eServGlobal is listed on the Australian Stock Exchange (ASX: ESV) and the London 
Stock Exchange AIM market (LSE: ESG). More information can be found at: 
www.eservglobal.com 
 
 
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| eServGlobal Limited                                      Tel: [phone] |      | 
| Jason Lilienstein                                        [e-mail] |      | 
| Company Secretary                                                             |      | 
|                                                                               |      | 
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| Altium (AIM)                                          Tel: [phone] |      | 
| Nominated adviser, Mike Fletcher/Paul                                         |      | 
| Lines                                                                         |      | 
| Corporate Broking, Chloe Ponsonby                                             |      | 
|                                                                               |      | 
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This information is provided by RNS 
            The company news service from the London Stock Exchange 
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