Recent Updates from Six IT Stocks- IFM, LNK, ISX, ARQ, VGL, CAT

  • Feb 28, 2020 AEDT
  • Team Kalkine
Recent Updates from Six IT Stocks- IFM, LNK, ISX, ARQ, VGL, CAT

Infomedia Reports Sustained Consistent Growth in H1 Revenue and Earnings

On 27 February 2020, Infomedia Ltd (ASX: IFM), a leading software provider in parts, service and data insights to the global automotive industry, released its 1H FY2020 results for the period ended 31 December 2019.

The Company registered a 19% increase in revenue to $47.885 million during the six months to December 2019. Backed by strong revenue growth and operating cost discipline, IFM maintained strong margins.

  • Cash EBITDA increased by 45% to $11.414 million as compared to 1H FY2019.
  • EBITDA improved by 35% to $22.899 million.
  • NPAT went up by 24% to $9.041 million while EPS grew by 21% to 2.86 cents.
  • Interim dividend for the period stood at 2.15 cents per share, representing a growth of 23% on pcp.

Commenting on the Company’s performance during the first half, CEO, Mr Jonathan Rubinsztein stated that the results reflected IFM confidence that annual growth at the top and bottom lines will continue irrespective of fluctuations in the timing of recognising revenue from new contract gains.

He expressed optimism over emerging opportunities in the Americas under a new regional head, while highlighting the Company’s performance in the APAC and the EMEA regions.  

Outlook:

The Company plans to continue making investments while remaining on track to register low double-digit growth in revenue as well as earnings in FY2020. Growth in the Americas, in addition to execution and roll out of data opportunities, is expected to result in potential upside to the Company’s performance in FY20.

Lower Financial Measures for Link Administration in First Half

On 27 February 2020, technology enabled administrator of financial ownership data, Link Administration Holdings Limited (ASX: LNK) also released its 1H FY2020 results for the 6-month period ended 31 December 2019.

  • Revenue dropped by 4% to $624 million as compared to the prior corresponding period (pcp) while statutory revenue went down by 13%.
  • Operating EBITDA declined by 11% to $163 million, and statutory operating EBITDA registered a drop of 20%.
  • Operating EBIT tumbled by 20% to $109 million, while statutory operating EBIT went down by 30%.
  • Operating NPATA dropped 11% to $81 million and statutory operating NPATA declined by 24%.
  • Statutory net profit after tax (NPAT) dropped significantly by 85% to $29 million.
  • Recurring Revenue during 1H FY2020 was noted at $522 million, accounting for 84% of overall revenue.
  • Growth trajectory for PEXA was strong with revenue growth of 54% to $79 million.
  • LNK declared an interim dividend (fully franked) of 6.5 cents for each share.

Lower financial measures compared to the pcp reflect the divestment of CPCS in June 2019, as well as impact of regulatory change and client losses in RSS.

Outlook:

For FY2020, the Company expects operating NPATA to be at least $160 million for the full financial year (FY20), balancing the positive contribution from PEXA, trading to date and expectations for the second half. Operating EBITDA is anticipated to be ~ 10% below the previous year.

iSignthis Unveils ClearPay + Probanx Agreement

iSignthis Limited (ASX: ISX), an ASX300 regulatory technology company delivering services to banks, credit unions, financial institutions and exchanges, is to own 12.96% of the National Stock Exchange of Australia (NSXA) and develop a DvP facility for NSXA known as ClearPay.

The Company, on 27 February 2020, announced that Probanx Solution Ltd and ClearPay Pty Ltd have signed a deal worth $4.5 million to provide services in circa 24 months. As per the agreement, the services include a DLT based Delivery vs Payment platform, combined with payments as well as identity verification.

The agreement allows ClearPay to make payment to Probanx® after the achievement of 13 distinct milestones. ClearPay would be operating as well as leveraging the DvP platform; however, it is subject to commercial deals & licensing. Also, ClearPay would be providing a necessary platform to allow bulk scaling of National Stock Exchange of Australia (NSXA) and automation. It would also offer distinct benefits to NSXA over the planned ASX DLT platform. 

ARQ Group Revenue Down 16.5% in FY19

On 27 February 2020, ARQ Group Limited (ASX: ARQ) announced its FY2019 results for the 12 months ended 31 December 2019, registering a decline of 16.5% in revenue from ordinary activities to $83.615 million. Underlying EBITDA dropped 3.7% to $14.79 million. Net loss from continuing operations increased from $15.43 million in FY2018 to $43.68 million in FY2019. Loss after tax attributable to members of the parent company went up from $2.46 million to $129.03 million in FY2019.

Strategic Review Status Update

Currently, the group is advancing discussions with interested parties for the prospective sale of the SMB division. Various non-binding indicative proposals have been received by the Company, and progress is being made on this front with an objective to confirm the proposals.

Concluded Sale of Enterprise Business Division

On 11 February 2020, ARQ Group signed a binding agreement to sell the Enterprise Services Division to an entity that is owned by a consortium including Quadrant Private Equity along with few members of the Enterprise team for $35 million.

The sale of the unit is scheduled to complete on 2 March 2020. The proceeds obtained after adjustments for net debt items, working capital and insurance cover are expected to be around $21.6 million, which would be utilised to clear debt.

The Company would be working with the lenders to confirm the orderly reduction of debt. Post that the Company would focus on strict cost management & value maximising options for the SMB Division.

 

Continued Growth for Vista Group in FY19

On 27 February 2020, Vista Group International (ASX: VGL) announced FY2019 results for 12 months ended 31 December 2019 and reported a continued growth across its businesses.

Financial Highlights

  • Revenue went up 11% to $144.5 million.
  • EBITDA dropped 5% to $31.1 million on a like for like basis.
  • Operating cash flow for the period was $15.5 million.
  • Final dividend of 2.1 cents for each share.

Operational Highlights

  • The global leadership status of Vista Group in the cinema industry soared to 51% market share of the 20 plus screens segment apart from China. The value was up from 48% in 2018.
  • Reported another strong year in terms of growth in the number of sites. In total, the Company has 857 new Vista Cinema sites which include 143 sites in China. Overall total sites reached 8,059.
  • There was a 16% growth in Cinema and Movio for the year.
  • Recurring revenue grew 11% to $88.2 million. Recurring revenue is 61% of overall revenue. 

Strong Revenue Growth Drives Catapult Group H1 EBITDA

On 26 February 2020, Catapult Group International Limited (ASX: CAT), announced its audited financial results for 1H FY2020 ended 31 December 2019. The Company delivered strong growth in annual recurring revenue of 20% to $68.8 million and a positive EBITDA of $5.7 million. The result was driven by continued robust revenue growth of 18% and a drop in operating expenditures.

Financial Highlights

  • Revenue during the period was $50.7 million, up 18% from the previous corresponding period.
  • Net loss after tax was $4.8 million. It improved by 48%
  • Positive free cash flow of $13.6 million was noted for the period.
  • By the end of 1H FY2020, net cash at bank was $24.7 million.
  • Client base grew by 66% with over one Catapult solution.

Outlook

The Company remains committed to growing ARR with expansion of its platform. Further, it would focus on enhancing operating cost efficiencies, as it expands and generates free cash flow.


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