Shares in print and business technology solutions company CSG Limited (ASX: CSV) have dropped around 7% on Monday to $1.40 after the release of the group's interim financial results. Inclusive of today's falls the stock has now slumped around 24% since the beginning of January.
Here's what investors learnt today:
- Revenues grew 8% to $117 million
- Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were 12% higher at $17.3 million
- Underlying net profit after tax expanded 10% to $11.1 million
- CSG Finance division recorded lease receivables growth of 25% to $236 million
- CSG's 'Technology-as-a-service" product suite expanded non-print equipment to 12.6% in Australia
- An interim unfranked dividend of four cents per share (cps) was declared. CSG's shares will trade ex-dividend on February 18 and payment is scheduled for March 9
Management provided the following outlook guidance for the full year to investors:
Forecast revenue of over $225 million, implying growth year on year of 14%
Guidance for the full year of between $38 million and $42 million in underlying EBITDA
A final dividend of five cps
Time to buy?
With the share price falling by around 24% since the start of January, this $440 million company is arguably becoming more attractively priced but is perhaps still not cheap enough for conservative investors.
Based on analyst consensus forecasts for financial year 2016 (source: Thomson Consensus Estimates) the stock is trading on a price-to-earnings multiple of 18.2x and a dividend yield of 6.4% which looks reasonable but arguably not enticing.
In comparison, other providers of equipment finance such as FlexiGroup Limited (ASX: FXL) and Thorn Group Ltd (ASX: TGA) are trading on single-digit forward multiples.
