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Technology player, Class Limited (ASX:CL1) reported solid half-year financials with sales revenue up by 12%, EBITDA up by 11% and Net Profit After Tax (NPAT) up by 2% for the six months ended 31 December 2018. The positive results sent the stock up by 2.341% to last trade at $1.530 on 14 February 2019.
The companyâs sales revenue increased by 12% to $19.03 million for 1H FY19 delivering EBITDA of $8.65 million, up 11%, compared to the previous corresponding period. The Statutory Net Profit After Tax of the company slightly improved by 2% to yield $4.36 million compared to $4.29 in 1H FY18.Â
During the financial half-year, the principal continuing activities of the Group were to develop and distribute cloud-based accounting, investment reporting and administration software, namely Class Super and Class Portfolio.
The report read that Class Portfolio grew from 5,949 accounts as at 30 June 2018 to 6,581 accounts as at 31 December 2018 with 32% of Class Super customers now using Class Portfolio.
Acting CEO of Class, Glenn Day, said: âClass' solid half-yearly results were underpinned by continuing increase in market share from competitors, world class retention rates of 99.2% and a growing Annualised Recurring Revenue (ARR) of $37.1 million.â
Moreover, the Group continued to maintain the grip over its market share in cloud-based SMSF administration software as it had 167,631 Self-managed Super Funds (SMSFs) on the Class Super product out of the total 174,212 accounts standing as at 31 December 2018, up from 169,413 accounts as at 30 June 2018.
Based on the substantial increase in accounts, the companyâs Annualised Recurring Revenue (ARR), for the ~94% of revenue earned from software license fees, increased to $37,100,000 compared to $33,732,000 on 31 December 2017.
The Board of Directors of the company have declared a fully franked interim dividend of 2.5 cents per share for H1 FY19, payable on 19 March 2019 with the record date fixed to 21 February 2019.
Class intends to release significant new features in the first quarter of 2019 in order to advance automation levels and further streamline SMSF administration for accountants. The Groupâs core focus remains on broadening its product offerings into the financial adviser community, supporting their need to deliver up-to-date, high-quality information and drive down costs to the customer.
With respect to its Strategic Alliances Program, the company has successfully managed to uplift its partner revenue by 24% to $960,000 as at 31 December 2018 compared to the previous corresponding period. The Group has recently signed with OpenInvest and InvestSMART as Portfolio Engine partners to drive their managed account offerings.
The company is further looking for its new Chief Executive Officer and is expected to announce the results of the recruitment process shortly.
CL1 last traded at the Price to Earnings ratio of 20.230 x with a market capitalisation of $175.9 million. The stock has fallen by 46.99% over the past 12 months despite the surge of 14.12% over the last month.
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