Outstanding HY report from IT small-cap RXP. Even better is strong outlook statement. Very pleasing update all round. Company sez:
"Technology services provider RXP Services Limited (ASX: RXP) is pleased to announce its results for the six months ended 31 December 2015 (1H16), which saw the Company deliver significant growth across all key metrics.
Revenue up 53% to $55.8 million (1H15: $36.4 million)
Organic Revenue growth of 19%
Underlying EBITDA up 172% to $7.8 million (1H15: $2.9 million)
NPAT up 172% to $5.6 million (1H15: $2.1 million)
Earnings per Share (EPS) up 167% to 4.0 cents
Operating cashflow up 244% to $5.9 million (1H15: $1.7 million)
Interim dividend of 1.0 cps fully franked, payable 11 April 2016
Upgraded Revenue target of $120m, maintaining EBITDA margin of 13-14%.
RXP say: "A great start to the financial year Commenting on the results achieved over 1H16, RXP Chief Executive Officer Ross Fielding said: “We are really pleased with the performance of the company over 1H16, with significant growth across all key metrics. This result is further validation of our OneRXP strategy that provides our people, our clients and our partners with a cohesive set of go-to market services and solutions. “The RXP team grew by 184 people over the half, driven by strong organic growth and the successful completion of the Engage ViidaCom and 10collective acquisitions.
Our ongoing investment in our people and our training programs continues to strengthen the depth of talent within our chosen specialisations. “The integration of Engage ViidaCom along with digital technology company 10collective has gone very well with both delivering to plan and both providing good client and practice cross-selling opportunities. “We have also continued to develop our intellectual property-backed solutions and “As a Service” offerings over the half year. We see a number of opportunities available to re-use our IP and will continue to focus on leveraging these further.
Cashflow strong.
Strong cashflow conversion enables interim dividend Operating cashflow over the half was up significantly to $5.9 million (representing 77% of EBITDA) and as at 31 December 2015, RXP had a cash balance of $9.7 million. This strong cashflow performance (coupled with a healthy balance sheet), has resulted in the Board declaring an interim dividend of 1.0 cent per share fully franked. The dividend will be paid on 11 April 2016, with a record date of 23 March 2016.
Future statement.
"Very well positioned for continued growth The momentum built in 1H16 has continued into January and, given the strong pipeline of work now in place, RXP expects full year revenue to reach $120 million, with EBITDA margin of 13-14% being maintained. Commenting on RXP’s outlook, Mr Fielding said: “Our 1H16 results were strong and, combined with the good start that we have seen to the second half, we are in a sound position for sustained growth across our chosen specialisations. “We have a firm commitment to “specialisation wins”, and working in growth areas that are relevant to our clients. The ability to evolve and grow our business organically has been a key driver to our success.
“Our strong balance sheet, strong cash generation, and healthy sales pipeline, combined with our talented team and “OneRXP” approach, positions us well to execute on our strategy and deliver continued growth moving forward.” For further information, contact: Ross Fielding Eric Kuret Chief Executive Officer Investor Relations, M"
RXP Price at posting:
60.0¢ Sentiment: Buy Disclosure: Held
