eServGlobal swings to $38m profit

eServGlobal (ASX:ESV) swung to a $38m profit in FY11 due to the sale of a unit to Oracle, but saw a resulting decline in revenue

Telecom software vendor eServGlobal Limited (ASX:ESV) swung to a $38 million dollar profit in FY11, from a loss of the same size a year before.

The company, which focuses on mobile money and VAS software, achieved the swing due largely to the sale of its USP business to Oracle for $107 million.

Ebitda including the proceeds booked from this sale grew to $52.2 million, from an FY10 ebitda loss of $20.6 million. eServGlobal had distributed $57.1 million of the proceeds of the sale to shareholders in August.

Excluding the remaining sale gains, non-recurring charges and forex losses, the company recorded an ebitda loss of $4 million.

Due to the lost revenue arising from the divestment, sales revenue fell to $42.8 million, from $78 million a year earlier.

The buyer and seller are also back at the negotiating table, after Oracle also alleged it anticipates incurring losses of $11.5 million from the deal due to alleged joint customer billing issues. eServGlobal has formally objected to this claim, the company's financial report states.

eServGlobal announced plans to focus on growth through markets with strong uptake in mobile money services.

ESV shares jumped 2.78 per cent during Wednesday's trading to $0.370.

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