The DWS Ltd (ASX: DWS) share price has been flying today. In afternoon trade the information technology services company's share price has risen over 8% to $1.62 following the release of its half-year report.
Key highlights from today's release include:
- First-half revenue of $73.7 million, up $5.6 million or 8% on the prior corresponding period
- First-half underlying earnings before interest, tax, depreciation, and amortisation of $13.7 million, up $1.6 million or 13% on the first-half of FY 2016
- Half-year net profit after tax of $9.1 million, up $1.5 million or 19% on the prior corresponding period
- Earnings per share of 6.9 cents
- Dividend of 5 cents per share declared, payable April 4 2017
Another impressive result from DWS and I can't say I'm surprised to see its shares bolt higher today. A big driver in the strong first-half performance was the successful integration of the Phoenix and Symplicit acquisitions.
Furthermore, not only does management believe that these acquisitions allow DWS greater flexibility in resourcing solutions for its customers, but they also offer an ever-increasing portfolio of services as well.
The digital and customer-led innovation service offering led by Symplicit in particular has been highly sought after by its clients.
But management is not resting on its laurels. The company has advised that it continues to look for earnings accretive acquisitions to supplement the current service offerings.
Although management hasn't provided any definitive full-year guidance, the outlook provided is reasonably positive. Management aims to focus on utilisation and margins. It also expects to see its organic growth sustained and good cost management continue.
Should you invest?
There is a lot of choice for investors when it comes to the information technology services industry, so choosing the right investment will be key.
A few other names in the industry include RXP Services Ltd (ASX: RXP), Data#3 Limited (ASX: DTL), Technology One Limited (ASX: TNE), and SMS Management & Technology Limited (ASX: SMX).
At just 11.5x trailing earning DWS does look extremely cheap right now, so it could be worth taking a closer look at.
But my preference in the industry continues to be RXP Services. Its shares are changing hands on the same earnings multiple as DWS, but it has yet to announce its half-year results. I'm optimistic that these results will be even stronger, making it the superior investment option today.
