Highlights: Revenue of $86.9m – 17.5% up on 1H16 4.5%...

Highlights:
Revenue of $86.9m – 17.5% up on 1H16
4.5% underlying1 billing revenue growth on a constant currency basis
Solid first-time contributions from US-based Hansen Solutions and UK-based HiAffinity
EBITDA of $23.8m – 6.6% up on 1H16
NPATA2 of $15.3m – 9.6% up on 1H16
Interim dividend of 3.0 cents per share, fully franked
On-track to achieve FY2017 guidance – revenue in the range of $165m to $175m and EBITDA margin between 25% and 30%

Hansen Chief Executive Officer, Andrew Hansen, said: “Hansen is yet again pleased to announce an increase in revenue and profitability for the half – EBITDA has now increased for the past four years when compared to the previous corresponding period.

Operating revenue increased 17.5% to $86.9 million. Excluding the currency headwinds we faced in the half, we had 4.5% underlying1 revenue growth in our core billing revenue on a constant currency basis, a very solid result considering the much higher revenue base we established last year.

During the half, we also saw the addition to our business of both the US-based Hansen Solutions and the UK-based HiAffinity. Hansen Solutions provides a SaaS billing and outsourcing solution for US energy retailers, while HiAffinity is a provider of water billing software. Whilst some re-shaping of the Solutions business is still to be undertaken, both businesses made contributions in-line with our expectations.

EBITDA increased 6.6% to $23.8 million. As anticipated with the inclusion of the lower-margin Hansen Solutions business, our EBITDA margin reduced to 27.4% from slightly above 30% last year. However, excluding Hansen Solutions, the EBITDA margin would have been consistent with last year. Pleasingly, we remain on-track to achieve our full year 2017 guidance – being revenue in the range of $165 million to $175 million and an EBITDA margin between 25% and 30%”.


Revenue Growth
Operating revenue for the first half of 2017 was $86.9 million, $12.9 million or 17.5% higher than 1H2016.
Contributing factors to the growth were:
 $3.2 million or 4.5% underlying1 growth in core billing revenue on a constant currency basis;
 a $4.4 million reduction in revenue due to currency movements compared to 1H16 – a significantly weaker pound (GBP) relative to the A$ contributed $2.1 million of the decline, while a weaker US$ (which now accounts for circa 50% of total revenue following the acquisition of the US-based Solutions business) contributed $1.3 million of the decrease;
 $1.6 million lower revenue from our non-core facilities management/other business – with $1.3 million of the reduction due to the expected movement of our only superannuation fund client to a mainstream system provider (which is expected to be $2.7 million for FY2017);
 a $14.7 million contribution from the US-based Solutions business acquired effective 1 July 2016; and
 a $1.1 million contribution over two months from the UK-based HiAffinity water billing business acquired effective 1 November 2016.

Income Tax
Income tax expense for 1H17 was $4.5 million, which equates to an effective tax rate of 25.2%. The lower effective tax rate is largely a function of our increased global R&D spend and a focus on the enhanced deductibility thereof.

Cash Flow
Net cash flow for 1H17 was negative $12.4 million, primarily a result of $22.8 million paid for acquisitions during the half, being $14.3 million for Solutions and $8.5 million for HiAffinity.
Cash at 31 December 2016 was $17.8 million, while debt of $2.0 million was outstanding (which has since been repaid).

Dividend
The Board has declared an interim dividend of 3 cents per share, fully franked for Australian taxation purposes. The record date is 9 March 2017 and the payment date 31 March 2017. The Dividend Reinvestment Plan (DRP) will again be available to shareholders with no discount. The DRP election cut-off date will be 10 March 2017.