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Hansen share price tumbles on profit report

The Hansen Technologies Limited (ASX: HSN) shares tumbled 8% to $3.68 today after the software billings business revealed an underlying net profit after tax excluding amortisation of acquired intangibles of $33.7 million on operating revenue of $231.7 million. Adjusted EBITDA came in at $55.8 million on a margin 1.9% lower at 24.1%. 

The company declared a final partially franked dividend of 3 cents per share to take full year dividends to 6 cents per share, which is marginally down on 7 cents per share in the prior year.

Adjusted earnings per share of 17.1 cents came in 13.5% lower with the group apportioning the soft result to “challenging operating conditions” for its client base of utilities and global business operators. 

Free cash flow for FY 2019 landed at $30.9 million and the group has record net debt of $148.3 million mainly due to its $163.8 million acquisition of Canadian software player Sigma Systems.

Hansen’s CEO, Andrew Hansen, said: “The highlight of 2019 was the acquisition late in the year of Sigma Systems, based out of Toronto, Canada. During the year we also won major new contracts in Australia, Finland and Sweden, and we commenced 8 client upgrades to the new version of our US municipalities billing system. In addition, our new utility analytics SaaS product continues to gain momentum and now has some 20 customers.”

In FY20, Hansen expects operating revenues around $305 million to $310 million and EBITDA in the range of $70 million to $76 million. This strong growth is in large part as the group will have a full 12 month contribution from the Sigma acquisition.

Hansen shares have risen 5% over the past 12 months, while the S&P/ ASX 200 Index (ASX: XJO) has gained 4.5% over the same period.

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Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Hansen Technologies. The Motley Fool Australia has recommended Hansen Technologies. 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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