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.
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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 and Citadel Group 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.