MENU

Servcorp on track for a rewarding 2014

Servcorp (ASX: SRV) has released results for the 2013 year. Highlights include:

  • Revenue up 4% to $208 million
  • Net profit up 43% to $21.27 million
  • Earnings per share up 47% to 22 cents (variance with net profit due to buyback)
  • Dividend steady at 15 cents fully franked
  • Net tangible asset backing $1.96 per share
  • Unencumbered cash on hand $90.62 million
  • Free cash produced $37.22 million (before tax)
  • Mature floor occupancy 79%, targeting 85% by end of calendar 2013
  • Mature floor net profit before tax up 13% to $42.22 million
  • 38 immature floors showed losses of $14.57 million

Although no financial forecast was provided for 2014, directors expressed optimism on the outlook. With floors in Australia, USA, China, Japan, UK, Middle East, Europe, Turkey, SE Asia and New Zealand, Servcorp is exposed to the health of the global economy.

In the aftermath of the GFC, aggressive expansion into the US was undertaken and many floors in highly prestigious locations were secured in competitive deals. The current 88% occupancy in the US floors demonstrates the success of this move and all but one of the US floors is expected to mature early in FY2014.

At $3.55, Servcorp is selling at 16 times earnings. 2014 dividend yield is expected to be 4.5%. On prospects and financial capacity, this stock is undervalued.

Want even more stock ideas? Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading


Motley Fool contributor Peter Andersen owns shares in Servcorp.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now