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.
