The Citadel Group Ltd (ASX: CGL) share price is down 10% to $3.97 today after the software business posted a net profit of $10.9 million on total revenue of $99.2 million for the financial year ending June 30, 2019. The profit and revenue are down 44% and 7% respectively over the prior year. Software-as-a-service or recurring type revenue now makes up around one third of all revenue at $34.2 million.
The group will pay a final dividend of 6 cents per share to take full year dividends to 13.8 cents per share, down 22% on the prior year. The company has cash on hand of $14 million and $12 million of debt for a net cash position of $2 million.
The company described its own results as "disappointing" and blamed delays in project extensions and lower customer spends partly related to the impact of the May federal election over the six months to June 3o 2019.
Canberra-based Citadel relies for a fair bit of its IT and software services work on government contracts across the health, national security, finance and defence sectors, among others.
While FY 2019 was "disappointing" management is "targeting" low double-digit revenue growth in FY 2020 with margins "broadly consistent" with the prior year. By extension that should translate into some reasonable profit growth.
It also has a "full year contribution from Noventus expected to add circa $18 million in revenue and $2 million in EBITDA" up its sleeve for the year ahead.
Other software businesses reporting this week include Altium Limited (ASX: ALU) and Catapult Group Ltd (ASX: CAT).
