A Look At These 2 Stocks- PME And ADA

Pro Medicus Limited

The healthcare IT company, Pro Medicus Limited (ASX: PME) is based in Richmond, Australia and provides enterprise imaging and radiology information systems (RIS) software to a global clientele of hospitals, diagnostic imaging groups, and other related entities. The company has a market valuation of ~ AUD 1.67 billion with ~ 103.62 million outstanding shares to date. With the end of the trading session on March 26th, 2019, the PME stock price stood at AUD 16.150, down 4.89%, by AUD 0.830. Today, the stock is again trading 8% down at AUD 14.860 (as at 2:10 PM AEST, 27 March 2019). However, the PME stock has been mostly trending up in the previous three months with a return yield of 48.54%. Moreover, PME has also generated a positive YTD return of 42.02%.

On March 18th, 2019, Pro Medicus released its investor presentation posting a profit after tax of $ 9.082 million for the first half of FY2019 ended December 31st, 2018, reflecting a rise of 184.3% on the prior corresponding period (PCP) ended December 31st, 2017. With the cash reserves of $ 24.735 million, the company remained debt free at the end of the period.

As for the revenue split for H1 FY2019, around $ 2.65 million was derived from the professional services, $ 3.05 million as capital revenue, around $ 6.23 million as baseline revenue and lastly, the exam/license revenue amounted to ~ $ 12.18 million (an increase of 31% over H2 FY2018). Envisaging a bright future on the back of sufficient reserves, the company paid out a fully franked interim dividend of 3.5c per share on March 22nd, 2019 and has further decided to pay a fully franked special dividend of 2.5c per share on May 17th, 2019.

Adacel Technologies Limited

Adacel Technologies Limited (ASX: ADA), based in Hampton East, Australia is a leading developer of operational air traffic management systems, speech recognition applications and advanced air traffic control simulation and training solutions for the civil and military aerospace sectors in the United States, Canada, and Australia. On March 26th, 2019, the ADA stock price dived 10.78% to AUD 0.745. Today, the stock is trading 2% up at AUD 0.760 (as at 2:10 PM AEST, 27 March 2019). Regardless, the ADA stock’s performance has been improving since the last three months from AUD 0.650 on December 27th, 2018, with a return of 14.62%. The YTD return also stands positive at 12.03%.

Recently, the company’s Chief Executive Officer, Mr Gary Pearson submitted his resignation, effective March 31st, 2019. Until a permanent replacement, an executive committee comprising key Board members will lead the company.

For the six months to December 31st, 2018 (H1 FY2019), Adacel Technologies recorded a profit before tax of $ 2.2 million after the adoption of AASB15, down 53% on $ 4.7 million in the PCP. The company claims to have met its guidance for the half-year and anticipates a stronger second half as it has accomplished key instalments. The revenues amounted to around $ 23.8 million, 6.4% lower than the PCP and the gross margin stood at $ 8.4 million, also lower 16.7% than PCP.

Moreover, the EBITDA for the period was recorded at $ 2.6 million, lower than $ 5.1 million in the PCP mainly due to lower gross margins and incremental G&A and R&D costs. The net cash balance stood at $ 3.1 million as of December 31st, 2018.


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