While the $450 million print and business technology solutions provider CSG Limited (ASX: CSV) might continue to sneak under the radar of many investors, the company has already attracted the attention of certain fund managers including Paradice Investment Management and Caledonia Investments Limited.
CSG has just released a solid set of full year results, announced an acquisition and launched a capital raising. These factors combined might mean the stock doesn't stay under the radar for much longer.
Key results
- Revenue growth of 13% to $224.3 million
- Underlying earnings before interest tax, depreciation and amortisation (EBITDA) up 15% to $33.5 million
- Underlying net profit after tax up 12% to $21.3 million
- Return on equity up from 24% to 31%
Dividend
- The board has declared an unfranked final dividend of five cents per share. The stock will trade ex-dividend on 20 August with payment on 8 September. An interim dividend of 4 cps was also paid during the 2015 financial year (FY).
- Looking forward to FY 2016 and the company has provided guidance that it expects to pay dividends totalling 9 cents per share again in the current financial year. Based on the current share price of $1.585, this implies a yield of 5.7%.
Outlook
CSG's share price has rallied an incredible 50% over the past 12 months which well-and-truly beats the -3.5% performance from the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). The outlook remains good for CSG with management providing the following guidance:
- Revenue growth forecast to be more than 14%, implying revenue greater than $255 million
- Underlying EBITDA growth of between 12% and 25% forecast, implying a range between $38 million and $42 million
- Capital expenditure forecast to be between $3.5 million and $4.5 million
- Post the proposed equity raising, the company is expected to be in a net cash position to the tune of $38 million
CSG appears to have plenty of positive momentum in its business and enticing operating metrics, however, investors need to determine if the upside is already fully priced into the stock.