A Glance at the Half-Yearly Results of Megaport and Computershare

  • Feb 14, 2020 AEDT
  • Team Kalkine
A Glance at the Half-Yearly Results of Megaport and Computershare

Two technology companies Megaport Limited and Computershare Limited have released their 1H FY2020 which helped its shares to surge up on ASX.

The shares of MP1 on 13 February 2020 opened the day's trading at a gap up of $0.25. The shares by the closure of the market settled at $11.73, up 8.61% and attained its 52-week high price. The company's result was driven by strong growth in its revenue and has a strong outlook for FY2020.

Another stock from this sector is CPU, which post the announcement of the result opened at a gap up of $0.14 at $17.590 and attained its day's high at $17.76. The shares finally settled at $17.54 by the market close.

Let's go through their performances during the period in detail.

Megaport Limited (ASX: MP1)

Megaport Limited (ASX: MP1) is the top global provider of Elastic Interconnection services. The Group's mission is to become the global network as a service provider.

Megaport's platform uses Software Defined Networking that allows its customer to connect to 346+ leading service providers in a flexible, on-demand, & cost-effective manner. The platform has changed the method businesses consume connectivity services. It has created a model that reflects cloud-buying capabilities and is, therefore, more intuitive & customer-focused than the offerings from traditional telecommunications organisations.

Megaport is:

  • An Alibaba Cloud Technology Partner
  • AWS Technology Partner
  • AWS Direct Connect Service Delivery Partner
  • Google Cloud Interconnect Partner
  • IBM Direct Link Cloud Exchange provider
  • Microsoft Azure Express Route Partner
  • Nutanix Direct Connect Partner
  • Oracle Cloud Partner
  • Salesforce Express Connect Partner
  • SAP Partner

Recent Update:

1H FY2020 results; Reports Statutory Revenue Growth of 70%

On 12 February 2019, Megaport Limited released its 1H FY2020 results for the period ended 31 December 2019. During the period, the company continued to progress towards growth trajectory, which includes new & expanded data centre along with network partnerships. At the same time, increased its statutory revenue by 70% and monthly recurring revenue of 68%. The company's operations are now in 21 nations with the launch of services in Japan.

Let’s take a quick look at the performance of the company during this period that are as follows:

  • The company's revenue for the 1H FY2020 was $25.9 million, a growth of 70% as compared to the previous corresponding period (pcp).
  • Total Monthly Recurring Revenue for the month of December 2019 was $4.6 million, up 68% on pcp.
  • The business generated a profit after direct network costs of $13.2 million during the period. It represents a growth of 173% (which is equivalent to $8.3 million) as compared to 1H FY2019.
  • Megaport reported a net loss for the half-year period ended 31 December 2019 of ~ $19 million, representing a growth as compared to the previous corresponding period.
  • Successfully completed capital raising of $62 million.
  • At 31 December 2019, the cash position of the company was $119.9 million.
  • Launched services in Japan during November 2019.
  •  

Revenue Breakdown from different regions during 1H FY2020:

  • From the Asia-Pacific region, the company reported a 58% growth in its revenue to $9.4 million.
  • From the North America region, revenue grew 108% to $11.4 million.
  • Revenue from EMEA region increased by 34% to $5.1 million.

 

Let’s understand the Key Performance Metrics of 1H FY2020 Result:

  • Enables Data Centres was up by more than 5% to 552.
  • Installed Data Centres grew above 6% to 317.
  • Cloud Onramps increased by more than 18%.
  • Customers, Ports and Megaport Cloud Router increased by more than 13%, 20% and 30% respectively.
  • Services which includes Ports, Virtual Cross Connections (VXCs), Megaport Cloud Router (MCR), and Internet Exchange went up by more than 20%.

Market Update:

The company announced about its extended alliances with CyrusOne & EdgeConnex in Europe as well as QTS in North America. It also developed new features for Megaport Cloud Router (MCR) as well as extended the MCR service presence.

 Since the launch of Megaport Cloud Router in 2018, the company reports 239 MCRs provisioned at 31 January 2020. During 1H FY2020, the company expanded the availability of the MCR services to 30 metros to drive more adoption of cloud connectivity services.

Outlook:

  • In 2H FY2020, the company would concentrate on growing its footprint to achieve its stated 380 installed data centre target.
  • MP1 would lay emphasis on the development of ecosystem. It would add new service providers to its marketplace & combine with more cloud onramps as cloud providers develop their platforms to new markets.
  • As the company evolves its platform, its development teams would work more towards the system automation along with features that allow quick provisioning of services while further incorporating with service providers.

Computershare Limited (ASX: CPU)

Computershare Limited (ASX: CPU) is one of the first start-up tech companies in Melbourne founded in 1978, which initially provided computer services to businesses that needed to automate processes. With time, the company has evolved and now it offers specialist computer bureau services to Australian share registrars. The company is engaged in the development of best in class technology that reduces risk, lowers cost & simplifies processes for its clients & their customers.

Recent Update:

1H FY2020 Result; Revenue increased by 1.2%

The company continued to focus on executing its long-term strategies, as well as strengthening its competitive positions. Revenue during the period increased by 1.2% to $1,141.7 million. Recurring revenue of the company accounts for 78.3% for the total revenue. Let's take a look at the performance of the company in a more detailed way:

  • EBIT declined by $24.2 million because of the delayed UK Mortgage Services platform migration ($18 million) along with lower margin income ($8 million).
  • Net profit declined by 51.9% to $124.668 million and declared an interim dividend of 23 cents per share.
  • Revenue growth from Employee Share Plans and US Mortgage Services was 24% and 43% respectively.
  • Equatex continues to outperform and more than 250 clients upgraded to the platform.
  • In US Mortgage Services, the buoyant market conditions helped the company to make disciplined investments in developing scale & expanding margin.
  • US Register Maintenance surpassed the industry trends and delivered another period that witnessed a growth in operating revenue & margin expansion.
  • The growth in business got counterbalanced the decreased contributions from its higher-margin event-based businesses, which were affected by lower activity levels throughout most markets.
  • Corporate Actions revenues declined by 17% while Stakeholder Relationship Management revenues by 49%.
  • Margin income revenue was impacted by lower interest rates and balances.

Guidance and Outlook:

  • In FY2020, CPU expects a fall in Management EPS by ~5%.
  • The momentum in Issuer Services, Employee Share Plans & US Mortgage Services should surpass the effect of lower interest rates & persistent weak event-based activity.

The company is dedicated towards the execution of its long duration growth strategies to build superior quality, core businesses with increasing recurring revenues, along with making efficiency gains throughout Computershare.


Disclaimer
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK