Appen Limited Upgraded Its Earning Guidance

  • Nov 27, 2018 AEDT
  • Team Kalkine
Appen Limited Upgraded Its Earning Guidance

Based in Australia, Appen Limited (ASX: APX) is a provider of high-quality data solutions and services for machine learning and artificial intelligence applications. On 22 November 2018, Appen Limited announced that the Vinva Investment Management has become a substantial holder of the company by having 5,393,221 securities and 5.07% voting power.

On 15 November 2018, Appen Limited announced an increase to its full-year earnings guidance. As per the new earnings guidance, the full year underlying EBITDA for FY2018 is expected to be in the range of $62 Mn to $65 Mn. Earlier, the company was expecting that the EBITDA will be in the range of $54 Mn to $59 Mn. However, due to the increase in the monthly revenues, largely from existing projects from existing customers, the earnings forecast was improved.  On 27 September 2018, the company announced the issue and allotment of 26,563 fully paid ordinary shares upon the exercise of unlisted options.

In H12018, the total revenue of the company increased by 106 percent to $152.75 million as compared to the previous corresponding period. The language resource division of the company recorded 4% increase in revenue in H1 2018, mainly due to increased demand for data collection and speech and image annotation services for technology customers. The Content Relevance division of the company experienced a 146% increase in revenues driven by the Leapforce acquisition as well as organic growth in demand for human annotated data for a variety of machine learning applications.

The statutory EBITDA of the company was $23.88 million in H1 2018 which is an 87% increase over the prior corresponding period. The basic earnings per share of the company increased from 8.32 cents in H1 2017 to 13.22 cents in H1 2018. As at 30 June 2018, the company was having total current assets of $80.46 million and total current liabilities of $27.9 million. The Net cash from operating activities was $14.53 million in H1 2018. The EBITDA margins of the company remained high at 16.8 percent but were impacted by the change in Language Resource mix of work in the period. The company declared an interim dividend for FY 2018 of 4.0 cents per share, fully franked which will be paid out of profit reserves. The Half year dividend of 4.0 cents per share is 33% higher than the 1H 2017 dividend.

As per the company’s outlook, the Company’s full-year underlying EBITDA for FY 2018 is currently forecast to be in the range $54 Mn - $59 Mn. The company is expecting more purchase orders in the second half of FY 2018 due to new customers with more frequent purchase order cycles.

Over the past six months, the share price of the company increased by 21.05 percent as on 26 November 2018 and traded at a PE level of 65.350x. APX’s shares traded at $13.340 (+4.957% Intraday) with a market capitalization of circa $1.35 billion as on 27 November 2018 (AEST 4:00 PM).


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