Australian (ASX) Stock Market Forum

RFL - Rubik Financial

Jump to new
RUBIK ENTERS INTO A CONDITIONAL AGREEMENT TO ACQUIRE COIN SOFTWARE PTY LTD – LEADING PROVIDER OF FINANCIAL PLANNING SOFTWARE
http://www.asx.com.au/asxpdf/20120702/pdf/42754q3wb8l23y.pdf
● STRONGLY EARNINGS ACCRETIVE
● BROADENS RUBIK’S POSITION IN THE FINANCIAL TECHNOLOGY MARKET
Rubik Financial Limited (ASX: RFL) today announced a significant expansion of its activities in Australia by entering into a conditional agreement to acquire COIN Software Pty Ltd from Macquarie’s Banking and Financial Services Group (Macquarie).
COIN is a respected technology service provider in the Australian financial planning software market with an established client base and leading position in the institutional segment of this market. As part of the agreement, Macquarie will continue to service the majority of COIN’s boutique (independent financial advice) clients, under a licence from COIN.
COIN expands Rubik’s wealth offering to the financial institution market and creates significant scale across the group. Rubik sees advantages that come with scale both for its own operations, as well as the benefits that will accrue to COIN’s institutional clients through focused product development.
Craig Coleman, Chairman of Rubik, said, “For some time, Rubik has been assessing acquisition opportunities and with COIN found an opportunity that provided the combination of first class products, clients, and capability that fitted within our market.
“COIN is an industry leader in financial planning software for financial institutions in Australia due to its client base, breadth of product, dedication to support and innovation. We expect that as a result of this acquisition we will be able to expand our overall offering and allow us to leverage our strengths in mobile and internet into
COIN’s financial planning software offerings.
“Our initial focus will be on delivering already committed product development programs and preparing our products for changes that flow from the Future of Financial Advice (FoFA) reforms. Beyond this, we will review technology opportunities based on customer feedback and market opportunity, whilst ensuring
ongoing support to clients,” Mr. Coleman said.
Tony Graham, Head of Macquarie Adviser Services, said: “We believe the proposed separation of COIN to focus on institutional and boutique businesses as two distinct and independent offerings, creates a great opportunity for the growth of both of these specialist financial planning software businesses.
Strategic Highlights
The acquisition:
- expands Rubik’s product offering in wealth to our target customers, institutional banks; and
- provides significant customer, earnings and staff expansion to Rubik’s existing business, which will add scale to the group.
Structure
Rubik has entered into a conditional agreement to purchase 100% of the share capital of COIN Software Pty Ltd, the owner of COIN Software and all associated intellectual property rights, from Macquarie’s Banking and Financial Services Group.
Macquarie will retain the contracts with boutique financial planners for the distribution and ongoing development of financial planning software to this segment, under a licence from COIN.
Rubik, at completion, will pay $23.75m in cash to Macquarie, which shall be funded through a combination of existing cash reserves and bank debt. In addition, Rubik will pay, 12 months after completion, a further amount equal to COIN’s net tangible assets (NTA) at completion, which is not expected to exceed $3.0m.
Financial Considerations
1. Existing COIN pro-forma EBITDA $5.2m (year ending March 2012) *
2. COIN recurring revenue of 85% will lift Rubik’s overall recurrent revenue base from 45% to 67% *
3. The purchase price paid at completion, may be subject to completion adjustments, but will not exceed $23.75m. In addition there will be a further NTA adjustment payable in cash 12 months after completion
4. Rubik will fund this acquisition through existing cash reserves and bank debt

* Financial metrics are for the Coin institutional business being acquired including pro-forma expenses for corporate costs but excluding the boutique business not acquired
 
Agreement reached for Bank-in-a-Box system


Rubik today signed a contract to provide a Bank-in-a-Box hosted core banking system to a specialist provider of finance. The client reviewed all major core banking offerings available in Australia, and determined that Rubik would be a trusted partner to deliver a complex project moving from an inhouse developed system to a world class banking package.


Contract confidentiality precludes specific detail, but Rubik advises that:
- Implementation will start after a design phase that commences this quarter, and system ‘go live’ is planned for November 2013.
- The deal size will make them one of our top 20 customers during the project.
- The client will be using a variety of consumer and commercial banking modules and products.

Rubik CEO, Brent Jackson says “We are glad to welcome another Bank-in-a-Box customer and we look forward to making it easier for their customers to bank with them.”
 
burglar said:
Going hard today!!
Click to expand...

The concern with RFL may have been the debt being undertaken to acquire COIN. Further sales news will increase RFLs bottom line, hence increasing their ability to fund the debt, mitigating concerns.
We still have no knowledge of who the last 3 sales have been to due to confidentiality. Will be interesting to find out.
 
terrible timing! i have been watching this company for a little while, and was intending to buy in but didn't have the cash! sold off another share today in order to get some cash for this company, only to see it jump by 20%... sigh back to waiting...
 
herzy said:
terrible timing! i have been watching this company for a little while, and was intending to buy in but didn't have the cash! sold off another share today in order to get some cash for this company, only to see it jump by 20%... sigh back to waiting...
Click to expand...

Sorry to hear that mate. Sales from RFL pretty much come from out of the blue so this stock can be unpredictable. The question is will it hold these gains? Each sale must put further confidence in holders, possibly forcing floor price up permanently.
What would be an acceptable price for entry for you?
Are you buying to trade or for value?
 
RUBIK COMPLETES ACQUISTION OF LEADING PROVIDER OF FINANCIALPLANNING SOFTWARE - COIN SOFTWARE PTY LTD

  • ● BROADENS RUBIK’S POSITION IN THE FINANCIAL TECHNOLOGY MARKET
  • ● STRONGLY EARNINGS ACCRETIVE
  • ● ALL KEY STAFF SIGNED ON
  • ● ALL CUSTOMERS GIVEN NECESSARY CONSENT
  • ● TRANSITION PLAN AGREED AND IN PLACE

    Rubik Financial Limited (ASX:RFL) today announced the completion of its purchaseof COIN Software Pty Ltd (COIN)     from Macquarie’s Banking and Financial ServicesGroup (Macquarie).
    The acquisition of COIN, which has a leading position in the Australian institutionalfinancial planning software market, marks a significant milestone for Rubik’sextension into wealth management.
    COIN is a high-performing company with outstanding people who are a strongaddition to Rubik. All key staff have signed employment contracts and continue tosupport the customer base with new release delivery.
    COIN adds to Rubik’s strong annuity revenue base and will contribute to Rubik’searnings.
    Craig Coleman, Chairman of Rubik, said: “This is a strategic and financially soundacquisition that extends Rubik’s software capabilities in the growing wealth market,and will establish Rubik Financial as a leader in financial planning software.”
    “We are looking forward to working with COIN’s staff and customers.”
    COIN has an established, loyal customer base for its software. More than 15 ofAustralia's largest banks and financial institutions use COIN as part of the financialplanning systems. All key clients have provided the necessary consents needed tocomplete the transaction.
 
Chart shows what a sale can do for RFL, remains to be seen if gains are held.
 

Attachments

  • rfl_ax09feb12_to_16aug12.png
    rfl_ax09feb12_to_16aug12.png
    12.2 KB · Views: 3
springhill said:
Sorry to hear that mate. Sales from RFL pretty much come from out of the blue so this stock can be unpredictable. The question is will it hold these gains? Each sale must put further confidence in holders, possibly forcing floor price up permanently.
What would be an acceptable price for entry for you?
Are you buying to trade or for value?
Click to expand...

Value - i know it's cheap (even now) but seeing it mid 5s quite recently makes me reluctant to pay above 6. Would like to see 5.5. Should come down again, and you're right - long term it's a good one as they keep gaining sales. I hate to think what loss of a contract would do though!
 
** I'm not quite at the point where I decide on an entry point based purely on value, so I tend to judge entry price based on semi-recent price action, once I've decided I like the company and its ball-park price.
 
An article from the Investor Daily with what I think are the key points.
http://www.investordaily.com.au/cps/rde/xchg/id/style/14885.htm?rdeCOQ=SID-0A3D9633-4B08EA27

- "We ended up with all of the key staff coming across to us," Rubik chief executive Brent Jackson told InvestorDaily.

- As Coin offered good capability, Rubik was aware of others interested in buying the business, Jackson said, adding that it specifically sought consent from Coin customers. "There was noise that IRESS would try, but our main intent was to make sure customers were going to be happy with the service they were going to get from us," he said.

- More than 15 of Australia's largest banks and financial institutions use Coin as part of their financial planning systems.

Staff retention, getting the jump on a major competitor. Getting their foot in the door to show the majors other products and services is an invaluable asset.

If RFL starts becoming a threat, is it possible IRESS would take them out?
 
Rubik appoints Wayne Wilson as head of COIN

Rubik Financial Limited, the ASX-listed provider of financial technology and software to over 200 financial sector clients, today strengthened its expertise in wealth management with the appointment of Wayne Wilson as Managing Director – Wealth with immediate responsibility to head up COIN.
Mr Wilson, who has 25 years’ experience in the wealth management industry, will as part of his responsibilities oversee the day-to-day running and operations of the COIN business. His appointment marks the next step of Rubik’s expansion into the wealth management, following its recently completed purchase of leading wealth management software company, COIN.
Craig Coleman, Chairman of Rubik, said: “Wayne brings a unique skill set and depth of knowledge of the wealth management, advice technology and platform markets to the role. He is well-known and well respected in the wealth management industry. His experience and expertise will ensure we manage the COIN acquisition well and enhance our position in this segment”.
“Wayne was instrumental in the development of a number of platform and software solutions over recent years including Asgard’s AdviserNETgain and Infinity Platform.”
Mr Wilson has held a number of roles, most recently as a consultant with WRW Consulting. From 2009 – 2010 he was head of Asgard and Advance at BT Financial Group, and he has held various senior positions in wealth management at St George Bank from 2005 – 2009. He was Group Executive, Private Clients, with Perpetual Trustees from 1996 to 2000.
Speaking about his appointment, Mr Wilson said: “Rubik has a reputation for quality, reliability and security and I am excited to be joining the company at this new stage in its development. My experience in the wealth management, advice technology and platform space is a good complement to Rubik’s core banking technology expertise in the financial sector.
“We are committed to Rubik being a leading provider of independent wealth technology in the Austraasian market place.”
 
Appointment of new Non-Executive Director

Rubik today appointed John Wilson as an independent non executive director. This appointment recognises the increased scale of the enlarged Rubik group since its recent acquisition of COIN Software Pty Limited and the desire to strengthen the technology experience on our Board.
John’s career spans more than 25 years' in information technology, management, sales and marketing, treasury and financial risk management. John is currently an Executive General Manager at data intelligence company Veda where he is Executive General Manager, Market and Product Development, responsible for a number of business lines, as well as marketing, mergers and acquisitions and innovation.
John is an experienced financial technology executives. He has extensive vendor and professional services experience, and has held finance and treasury management roles for major organisations. John has lived and worked in Australia and Asia and was previously Asia Pacific President for SunGard, where he managed a large team across 14 offices in 11 countries. He was responsible for SunGard's business activities across the Asia Pacific region during a period of strong growth for the firm. He grew the business successfully year-on-year, including undertaking a number of strategic acquisitions for SunGard.
John was the first Australian executive to acquire a financial technology company in China.
He joined SunGard in 2000 from KPMG where he was a Partner. At KPMG, he had responsibility for the Treasury software and consulting practice built around the Quantum Treasury Management system.
John holds a Business Degree in Accountancy, is a CPA and has a Master of Applied Finance from Macquarie University.
Rubik Chairman, Craig Coleman, says “We welcome John to Rubik and look forward to leveraging his extensive Financial Technology experience.”
 
Buyers have started lining up at +6c for RFL again, last time this happened a couple of weeks ago, a sales announcement followed soon after
 
springhill said:
Buyers have started lining up at +6c for RFL again, last time this happened a couple of weeks ago, a sales announcement followed soon after
Click to expand...

1.1m RFL @ 6.5c traded in quick succession, with another single bid of 500k shares @ 6.2c
Something in the wind? Hoping so.
 
ASX listed Rubik Financial Limited said today that its updated financial planning software, COIN version 4.0 is compliment with the Future of Financial Advice (FoFA) reforms.

New functions have been included that allow users to meet the fee disclosure and opt in requirements of the new legislation.

"Extensive changes have been implemented into COIN Office 4.0 with a focus on FoFA readiness, office efficiency and client management whilst delivering an improved user experience," said Wayne Wilson, Rubik managing director - Wealth.

"The changes will assist planners in being FoFA ready as efficiently as possible, and include improvements to workflows and client management as well as monitoring and reporting," he said.

Advisers can now record and keep track of packages and services offered to clients, the fees charged for those services and the amounts paid by clients, said Rubik.

Planners and network administrators will also be able to conduct in-depth analysis and product reporting using a number of new filters such as service acceptance date (opt-in), fee statement date and services provided.

Services offered and taken; client package type; opt in date; and fee disclosure dates can now be recorded.

Workflow changes have been made to help network administrators improve FoFA efficiencies. Large scale batch updating functionality has also been implemented.
 
Another 1.137mill traded today, with exactly 1 million of that at 2:33pm.
Did Coleman pick up another 1mill today for the Coleman Family A/c?
 
Excerpts from the Chairman's Report. Underlined segments are mine. Judging from the boldened part in New Contracts, there are further potential sales news contracts in the pipeline.
The latest customers to sign on have not even been divulged to the market yet.

Dear Shareholders,
The financial performance of the company improved marginally in the year ended 30 June 2012. It is worth noting that all of our software products achieved higher revenues and are now making a profitable contribution.
Adjusting for one off transaction costs relating to our acquisition of COIN (of just over $1m) the company made a small underlying profit.
Looking forward, the future earnings outlook for the company is much stronger as a result of achieving some of our long term objectives. We have recently been successful in winning some significant new contracts, we have completed the acquisition of the COIN business and we have made some important people appointments. All of these achievements position the company to deliver future earnings growth and shareholder value. I would now like to briefly expand on each of these three points.

New Contracts
Last year I mentioned that we had effectively completed the capital and operating investment required to support all of our Bank software products and therefore our operating earnings were highly leveraged to additional sales. During the period, we increased our sales staff and developed stronger sales systems. I am pleased to report that we have been able to secure new business in each of our key software products and have a number of advanced opportunities in negotiation.
Importantly we have secured two new Bank-in-a-Box clients (one during the reporting period and one shortly after) which will increase future recurring revenues. We recognise that the pace of sales of this service has been slower than we would like, however it is a complex and major purchase undertaken by a financial institution very rarely. The Bank-in-a-Box product had very slight positive earnings in 2012, but with these new contracts and a large addressable market, this business will become an important source of revenue and profit growth in the coming years.

The COIN Acquisition
We recently announced the acquisition of COIN software from Macquarie Bank. COIN provides mission critical financial planning software, is already a profitable business and has an established blue chip client base. It has enabled Rubik to move into the adjacent wealth management segment and thereby broaden our financial technology offer. We see the ability to improve our wealth service offering and cross sell other services to this client base. We look forward to providing you more information and understanding of this business as the year progresses.

Our People
The Board has worked with our CEO Brent Jackson to invest in our senior management and improve the culture of the business. Since our last annual report, we have externally recruited a CFO, a Sales Director, an experienced executive to head our Wealth business and appointed a new Non- Executive Director with a proven track record in technology related businesses.
- Our CFO, Paula Kensington comes to us with a background at AWA and Keycorp with the ability to rapidly distil the financials and provide sound advice to business units. The Board would like to acknowledge the improvement in quality of reporting and the enhanced controls over utilisation and budgets.
- John Duggan, our Sales Director, comes to us from Oracle and Sun. He has helped us recruit and manage an expanded sales team and driven the company wide use of our sales methodologies.
- Wayne Wilson joined us as Managing Director Wealth Management to head our move into wealth management software following our acquisition of COIN. Wayne is a highly experienced wealth executive with a background in Asgard, St George and BT.
- Recognising the increased scale and breadth of the business we have recently appointed John Wilson as a Non Executive Director (appointment effective 21 August 2012). John has many years experience and a proven track record in financial technology businesses, including serving as the APAC head of business for SunGard, where he managed a large team across 14 offices and 11 countries. He will be able to provide guidance and contacts as we extend our offerings in Asia.
The key to a successful technology business is developing a culture where people strive to understand client needs and deliver on our promises. Our team aims to deliver trusted, secure, reliable services to our clients, and it is clear this culture is highly valued by our Banking and Wealth Management clients.

Key Numbers
• Revenue in Technology segment improved by 10% to $8.9m (2011: $8.1m)
• Staff – 60 (2011: 56), has increased to 100 post COIN acquisition
• Cash from operations has improved to ($0.6m) in 2012 from ($2.5m) in 2011
• Employment costs have reduced year on year by over $1m

Business Structure
The changes last financial year to create Lines of Business with direct Profit and Loss responsibility has been successful. Each business unit has had a significant lift in underlying profitability, and an improved focus on delivering sales that will lead to profitable growth.
We have had positive customer engagement and new work in all product lines, and this year has seen the promise in our Bank-in-a-Box offering starting to be realised.
The range of capabilities provided by Rubik and our partners now allows us the ability to offer a complete universal banking capability to any financial institution. This ability to operate world class banking services on demand, pay-as-you-go is unmatched in the Australian marketplace.

Engage
This year we became better at engaging with our customers. We became better at understanding their needs and offering proposals that met both their budget and requirements. This was evidenced by sales highlights that included:
● Our Sales team reached their forecast, with half of our business developers achieving quota, this will deliver a ‘tail’ of revenue of approximately $2.2m in 2013
● 117 individual sales, with 11 of these over $100k
● 6 new ‘name’ customers including an Abu Dhabi based Bank for CWX, an Australian Church fund for Bank-in-a-Box, 3 scoping exercises for Australian Bank-in-a-Box implementations, a NZ Government organisation for CWX, and SMS top-ups and mobile banking for an overseas Bank.
We also have seen improvements to the sales cycle; while this is still slow it is possible that it will improve over the next year as clients access to capital improves.

Serve
There has been a lot of work behind the scenes in Rubik over the last year improving our quality of processes and delivery. This has been manifested in lower levels of “Blocker - Severity 1” and “Critical - Severity 2” issues for our clients (a decrease of 77%) and a corresponding improvement in our ability to deliver on Service Level Agreement.
We have also focussed on hardening our clients’ systems, with more work on security and the ability for clients (and their customers) to choose appropriate levels of security that balance usability and access.
We have also spent significant time building and testing our Disaster Recovery and Business Continuity capabilities, to ensure we can rapidly move capabilities when the unexpected occurs.
Between our technologies, infrastructure and design approach we aim to have the highest level of reliability of systems in our industry.
This year we invested in technical training, with our team being benchmarked for their IT skill and then we held a series of focussed training sessions on key areas to improve productivity and the quality of our work – this program will continue in 2013.

Grow
We have an existing level of sales pipeline that is stretching the resources of our sales team; this team will grow with additional business developers, account managers and support staff over this year to accommodate this demand. We also have existing customers demanding more services and seeking to use our products across multiple countries. At the same time, we have significant interest from potential international partners in extending our product offerings to new locations. We will review these opportunities carefully and invest wisely in increased sales and channel capability, but it is promising that there is demand for growth.

The Future
We go into 2013 with a new business capability in Wealth, and a range of clients who expect and demand the best. Our priority will be to ensure that we stay focussed on delivering high quality services to all of our customers, while still seeking the new business to grow our business

Also, something to keep in mind when trying to gauge future revenues from ASX announcements.
The Board has endorsed a Sales Disclosure policy to define when a signed customer contract should be disclosed to the market as a material item. All contracts worth more than $1M in year 1 income will be disclosed to market on signing. Contracts between $250K and $1M will be reviewed against the following criteria:
● First sale of a new product
● Sale to a significant (i.e. Top 100 ASX or equivalent) company
● Sale that is a precursor to a significant second sale
● Strategically important
 

Similar threads

divs4ever
EDC - Eildon Capital
Replies
0
Views
986
divs4ever
divs4ever
R
Greatland Gold plc (AIM: GGP)
Replies
4
Views
2K
rcw1
R
divs4ever
AGG - AngloGold Ashanti
2
Replies
26
Views
5K
mullokintyre
mullokintyre
Craton
Albo's Coal and Gas Price Cap and Financial Aid proposal
2
Replies
38
Views
4K
Smurf1976
Smurf1976
Dona Ferentes
NSX - NSX Limited
Replies
11
Views
2K
Joules MM1
Joules MM1
Top