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Infomedia shares up on surging profits, dividends, double-digit growth forecast

This morning Infomedia Limited (ASX: IFM) released its results for the financial year ending June 30, 2019. Below is a summary of the results with comparisons to the prior year. 

  • Revenue of $84.6m, up 16%
  • EBITDA $38.04m, up 31%
  • Cash EBITDA $19.1m, up 82%
  • NPAT $16.1m, up 25%
  • Earnings per share 5.19c, up 25%
  • Final dividend 2.15cps, total dividends 3.9cps, up 26%
  • No debt and $15.5 million cash on hand, up from $13.3m
  • Forecast for double-digit revenue and earnings growth in FY 20

Infomedia’s CEO, Mr Jonathan Rubinsztein said: “Our performance during the year reflects the growing importance of parts and service after sales to the global automotive industry. Our investment to date has contributed to an increase in scale and improved margins.”

The stock is up more than 50% over the past year and this impressive result is backed up by a software-as-a-service (SaaS) business model that provides attractive recurring revenues and high margins.

Cash EBITDA (conservatively adjusting for the capitalisation of development costs) came in at $19m on revenue of $84.6m to provide an EBITDA profit margin of 23%, with management forecasting double-digit revenue and earnings growth in FY 2020.

The balance sheet is also relatively strong with no debt and $15.5 million cash. 

The only catch is that the decent outlook is potentially priced into the stock on 38x FY 2019’s EPS and a 2% fully franked yield.

However, the company still has room to lift its margins to suggest the stock may still be reasonable value if management can execute on the market opportunity. 

Other SaaS businesses set to hand in their report cards this week include Catapult Group Ltd (ASX: CAT) and Altium Limited (ASX: ALU).

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Tom Richardson owns shares of Altium.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Catapult Group International Ltd. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Catapult Group International Ltd. 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 Scott Phillips.

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