Silver Chef Limited dishes up record profit: Is it too late to buy?

What: Small-cap equipment financier Silver Chef Limited (ASX: SIV) yesterday reported a record $12.7 million net profit after tax for the year ending 30 June 2014, up 11% from the previous year, bolstered by a 24% increase in revenue. Although the profit result was at the upper end of guidance ($12.3 – $12.7 million), the shares still dropped 2.6% for the day.

So What: Financial year 2014 proved to be somewhat of a mixed year for Silver Chef. The group recognised an impressive 17% growth in its core Silver Chef (Hospitality) equipment rental operations (which account for 68% of the rental assets lease receivables). However this was partially offset by a weak start to the year in its GoGetta equipment finance business. Pleasingly, the company managed to get this division’s growth back on track in the second half, which it expects will carry forward to deliver strong results in FY15.

Some of the other highlights from the report include.

  • Asset acquisitions up 10% to $137.7 million
  • Rental assets and lease receivables up 16% to $299 million
  • EBIT up 6% to $24.9 million
  • Earnings per share (EPS) up 5% to 43.4 cents
  • Final fully franked dividend of 16 cents per share, taking its full-year dividend to 30 cents

Now What: With a market capitalisation of just $189 million, Silver Chef is currently trading on a P/E ratio of 14.2 and a grossed up dividend yield of 6.8%. With strong growth anticipated over the coming years, Silver Chef is presenting as a very solid buy right now.

Another small cap stock with strong growth potential and a fat, fully franked dividend yield has recently been named by The Motley Fool's top advisor as our #1 dividend-paying stock for 2014-2015. Put simply, this ASX stock could be a huge winner for your portfolio over the coming years, and you can discover the name and code FREE by clicking here now.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.