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The Melbourne, Australia-based Hansen Technologies (ASX:HSN) develops, integrates, and supports customer information systems, billing software and data management systems to four industry verticals comprising energy, water, telecommunications and pay TV. It serves more than 500 clients globally; thus, helping them to streamline billing and operational processes, manage and analyse consumption data and improve their customersâ experience.
On February 22nd, 2019, the company announced its results for the six months ended December 31st, 2018, affirming a favourable half year for the business. As per the report, the operating revenues for 1H FY2019 was AUD 112.4 million, $ 6.0 million or 5.1% down on 1H FY2018 but consistent with 2H FY2018. Although the recurring revenues have been broadly consistent over the past year, the decline in overall operating revenue with respect to 1H FY2018 was mainly due to lower non-recurring revenues on account of less project work. Besides, recurring revenue represented around 63% of the total revenue in 1H FY2019, following the execution of new accounting standard AASB 15 and reclassification of some of Enoroâs revenues, both of which lowered recurring revenue. Â
For the half year, the company also delivered an EBITDA of AUD 28.5 million, which is $ 5.3 million lower than 1H FY2018 and $ 3.0 million higher than 2H FY2018. As for the EBITDA margin, the 1H FY2019âs was 25.3%, indicating a decline on the 28.6% recorded in 1H FY2018, but improvement with respect to the 22.7% in 2H FY2018.
According to the report, the free cash flow for 1H FY2019 was $ 10.1 million, with a net increase of around $ 8.0 million in the working capital due to major contributing factors such a $ 2.6 million negative impact from the adoption of AASB 15 that will come into effect over time, and a seasonal rise in Enoroâs working capital.
Moreover, during January 2019, there was a $ 3.2 million improvement in the whole Groupâs working capital position. The repayments of debt amounting to $ 4.7 million during the half led to the gross outstanding debt of $ 22.7 million recorded at the end of the period along with a net debt position of $ 0.6 million, constituting a strong balance sheet positioning the company to fund future growth appropriately.
The Board also paid out an interim fully franked dividend of 3.0 cents per share to the shareholders, consistent with last yearâs distribution. The overall guidance for FY2019 remains unchanged. However, due to 1H FY2019 revenue being slightly above than anticipated, the 2H FY2019 revenue is expected to be consistent with 1H 1FY209.
Hansen has a market capitalisation of AUD 666.04 million with approximately 197.05 million volume of outstanding shares. With the close of the market session on February 22nd, the HSN stockâs last traded at a sell-off price of AUD 3.030, a steep decline of 10.35%, indicating an intra-day loss of AUD 0.350. So far, the stock has generated a negative YTD return of 3.43%.
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