Why is ASX 300 tech share Bravura Solutions suspended?

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading haltA man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt

The share price of S&P/ASX 300 Index (ASX: XKO) tech stock Bravura Solutions Ltd (ASX: BVS) won’t be going anywhere today.

Trading of the stock has been suspended following a two-session-long trading halt as the company considers its business performance, its guidance, and contemplates a capital raise.

The Bravura Solutions share price last traded at 85 cents.

Let’s take a closer look at what appears to be going on with the ASX 300 tech share.

Bravura Solutions share price suspended, earnings delayed

Those invested in Bravura Solutions shares likely expected to flick through the wealth management and administration software provider’s first-half earnings this morning. Instead, they’ve been left with a potentially ominous message.

The company has delayed the release of its earnings, potentially until the very last minute – 6 March. And the market could be forced to wait until the following day to trade in the stock.

In the meantime, it’s flagged a potential capital raise. Though, it didn’t clarify why it might need extra cash.

Bullish market watchers might be anticipating news of an acquisition. Bears, on the other hand, might be expecting the company’s earnings to reveal a decimated cash position.

The company warned its financial year 2023 performance would likely come in below expectations in November.

It said its revenue should increase modestly year-on-year while customer spending trend lower and three legacy contracts wind down in Europe, the Middle East, and Africa (EMEA). Meanwhile, operating costs were tipped to grow between 16% and 20%.

It forecast its first-half earnings before interest, tax, depreciation, and amortisation (EBITDA) to come in between $10 million and $15 million. Meanwhile, its net profit after tax (NPAT) was tracking to be flat at best and a $5 million loss at worst. Bravura Solutions continued:

The company has sufficient liquidity comprising $29 million of cash and $19 million of available debt facility, as at [2 November], and the current and planned initiatives to reset the company are expected to be managed within the existing capital structure.

Board changes

The ASX 300 tech share also revealed three major board changes today.

Director Alexa Henderson has stepped down from the board. She walked away holding 10,000 shares in the company, while her spouse has 201,975 shares in their superannuation fund.

Meanwhile, Andrew Russell and Russell Baskerville have been appointed to the board.

Chair Neil Broekhuizen thanked Henderson for her contribution to the board and commented on the appointment of Russell and Baskerville. He said:

They not only bring extensive technology knowledge but also change management, transactional and governance capabilities along with an entrepreneurial spirit. Their expertise will be most valuable as we implement our restructuring program to set the business up for a return to profitable growth.

Bravura Solutions share price snapshot

The last few years have been disastrous for the Bravura Solutions share price. It’s tumbled 49% since this time last year and is currently 86% lower than its $6.10 peak – reached in 2019.

The post Why is ASX 300 tech share Bravura Solutions suspended? appeared first on The Motley Fool Australia.

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More reading

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bravura Solutions. The Motley Fool Australia has positions in and has recommended Bravura Solutions. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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