Why has the Silver Chef Limited share price suddenly soared 10%?

Share in hospitality equipment funding business Silver Chef Limited (ASX: SIV) have leapt around 10% on Tuesday after the group presented a strong set of interim financial results.

The stock has now recorded a gain of almost 30% in the past 12 months compared with a near 16% fall in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).

Here’s what made investors push the share price higher today:

  • Revenue jumped 21% to $101 million
  • Net profit after tax leapt 45% to $10.3 million
  • Earnings per share increased 37% to 32.8 cents per share (cps)
  • A fully franked interim dividend of 17 cps, up 6% was declared
  • The GoGetta business achieved excellent growth over the six months to December 31, with the asset base up 42% and record acquisitions of $75 million during the half
  • The Canadian business grew strongly, in line with expectations
  • Silver Chef provided guidance for the full year ending June 30 of an underlying profit between $23 million and $24 million

Despite the strong share price performance, Silver Chef still trades on less than a market multiple which could suggest further upside, however, it’s not the only stock in the leasing sector which could be appealing to investors…

FlexiGroup Limited (ASX: FXL) and Thorn Group Ltd (ASX: TGA) are two peers that operate some business lines in a similar space to Silver Chef. Unlike Silver Chef, neither firm currently has exposure to the growth potential which Canada offers. However, both stocks are trading near their respective 52-week lows and on lower multiples which could suggest value investment opportunities are present.

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Motley Fool contributor Tim McArthur owns shares in FlexiGroup Ltd. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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