The below-mentioned stocks have recently come up with significant updates. Let’s take a closer look at these updates as well as the recent financial and stock performances of these stocks.
Link Administration Holdings Limited (ASX: LNK)
Link Administration Holdings Limited (ASX: LNK) is a leading provider of technology-enabled administration solutions with operations in four divisions: Fund Administration, Corporate Markets, Technology and Innovation and Link Asset Services (LAS). The company’s clients include some of Australia’s largest superannuation funds as well as the world’s largest corporations.
The company’s international activities are largely concentrated in Corporate Markets, with operations in New Zealand, the Philippines, Hong Kong, India, Dubai, Papua New Guinea, South Africa, Germany, France and the United Kingdom. The company has built strong market positions in all these locations.
On 18th June 2019, the company made an announcement stating that it has increased the duration of its contract with AustralianSuper, a major client of the Link Group, for further four years. It is expected that this contract extension will help both the companies in building their existing partnership to address an ongoing strategic agenda.
In an Investor Presentation published on 18th June 2019, the company provided an outlook for FY19, wherein it has communicated that the company is currently optimistic about the medium to long term opportunities despite short term headwinds.
The company has reaffirmed that its operating EBITDA for FY19 is expected to come in between $350 million to $360 million and its FY19 pro forma operating EBITDA is going to be in the range of $315 million to $325 million. Moreover, the company is expecting its operating NPATA to be in the ambit of $195 million of $205 million.
The company earlier communicated that due to the lack of finality regarding the Brexit outcome in the UK, the sentiments of Link Asset Services are getting impacted, which is contributing to the lower levels of business-related activities.
In the first half of FY19, the company reported a statutory net profit after tax (NPAT) of $186.8 million, which was 187% higher than the previous corresponding period (pcp). The increase in NPAT was largely related to the inclusion of LAS as well as a one-time benefit from the revaluation of the initial 19.8% equity held in PEXA. Further, the company reported operating EBITDA of $185.4 million and operating NPATA of $107.8 million. 49% of the company’s revenue was obtained from outside of Australia and New Zealand.
Financial Summary (Source: Company Reports)
In the half year period, the company’s net finance expense increased substantially, reflecting a more normal level of gearing during the period. The net finance cost in the pcp benefited from a significant net surplus cash position during the four months to November 2017, following the capital raise in July 2017 and prior to the completion of the LAS acquisition.
The company has determined an interim dividend of 8.0 cents per share for shareholders, which will be 100% franked and paid on 9th April 2019. During 1H 2019, the company’s attention was on supporting client migration activity and restructuring activity across the Fund Administration and T&I business units.
Link Group EMEA has a market leading position in Europe across three business lines and is operating across eight highly regulated jurisdictions.
Link Group EMEA – Geographical breakdown (Source: Company Reports)
Link Group EMEA currently administers and safeguards over £200 billion of assets and serve more than 2,500 customers, including some of the world’s largest corporations.
The company recently provided an update on the sale of Link Asset Services’ Corporate and Private Clients business, where it has advised that all the regulatory approvals have been received and now, the completion is expected to occur on 28th June 2019. The money received from the sale will be strategically used to decrease the company’s debt in order to provide a stronger and more flexible balance sheet.
At market close on 20th June 2019, the stock of the company was trading at a price of $5.320, down 1.299% during the day’s trade with a market capitalisation of ~$2.88 billion. The stock is trading at a PE multiple of 10.690x, with a dividend yield of 3.99%. In the last six months, the share price of the company decreased by 19.55% as on 19th June 2019.
TechnologyOne Limited (ASX: TNE)
An Australian enterprise software company, TechnologyOne Limited (ASX: TNE) has offices throughout Australia, New Zealand, Asia, South Pacific and the United Kingdom.
In an update provided on 20th June 2019, the company informed that in FY17, on average, its customers had 5.1 out of 14 products. The company now expects this to increase to an average of 8.1 products per customer by FY27, which will generate $420 million ARR. The company’s APAC market penetration does not exceed 15%, hence, there is a significant room to grow in the future years.
In addition, the company advised that its profit margin will continue to improve to 25% in the next few years, and then will continue to 30%. The company believes that it is well positioned for the future and will continue to double in size every five years.
In the first half of FY19, the company earned Net Profit Before Tax of $24.5 million, up 130% on the pcp. The company’s revenue increased by 5% to $129.3 million in the H1 FY19 as compared to the pcp.
In the UK, the company witnessed strong momentum in the first half, with new customers acquired, and the UK loss has reduced from $3.2 million to $900k for the half-year, which is an encouraging piece of news for the company and its shareholders.
On the back of strong half year results, the company increased its dividend to 3.15 cents per share for the half year period, up 10% on the prior year.
Dividend last five years (Source: Company reports)
At market close on 20th June 2019, the stock of the company was trading at a price of $8.260, up 3.769% during the day’s trade, with a market capitalisation of ~$2.52 billion. The company’s stock is trading at a PE multiple of 41.420x, with an annual dividend yield of 1.17%. In the last six months, the share price of the company increased by 27.56% as on 19th June 2019.
NEXTDC Limited (ASX: NXT)
A technology company, NEXTDC Limited (ASX: NXT) operates dependent data centres in Australia and facilitates business transformation via its infrastructure management software, connectivity services and data centre outsourcing solutions.
In the first half of FY19, the company reported revenues of $90.8 million, which was 17% higher than the previous corresponding period. Further, the company incurred a statutory net loss after tax of $3.1 million in the half year period.
1H19 profit and loss summary (Source: Company reports)
In FY19, the company expects its revenue to be in the ambit of $180 million to $184 million and underlying EBITDA to be between $83 million to $87 million. Further, the company anticipates strong demand for connectivity solutions in the second half.
At market close on 20th June 2019, the stock of the company was trading at a price of $6.700, down 2.19% during the day’s trade, with a market capitalisation of ~$2.36 billion. In the last six months, the share price of the company increased by 11.02% as on 19th June 2019. Its 52 weeks high price stands at $8.190 and 52 weeks low price at $5.610, with an average volume of ~1,507,377.
ikeGPS Group Limited (ASX: IKE)
ikeGPS Group Limited (ASX: IKE) has been awarded a significant IKE Analyze Contract for approximately $0.15 million, validating the application and value of IKE Analyze for 5G mobile network deployment.
Earlier, the company won a material IKE Analyze contract for approximately $0.4 million, successful delivery of which will result in sales into other US regions with this large Tier-1 operator.
In FY19, the company reported total recognised revenues of $8.0 million, which was 4% higher than the pcp of $7.7 million. The company’s gross margin for the period increased 34% to $5.4 million and its gross margin percentage improved to 67%. The company reported a net loss after tax of $5.1 million and ended the half year period with a cash of $3.5 million and receivables of $1.4 million.
At market close on 20th June 2019, the stock of the company was trading at a price of $0.510, down 1.923% during the day’s trade, with a market capitalisation of ~$47.05 million. In the last six months, the share price of the company decreased by 10.34% as on 19th June 2019. Its 52 weeks high price stands at $0.580 and 52 weeks low price at $0.450, with an average volume of ~23,666.
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