Amid a sea of red on the S&P/ASX 200 Index (INDEXASX: XJO), the FINEOS Corporation Holdings PLC (ASX: FCL) share price has bucked the trend and risen by 6.86% following the release of its results for the half year ended 31 December 2019.
What does Fineos do?
Fineos is a Dublin-based provider of software to the life, accident and health insurance industry, with offices across Europe, North America, Australia and New Zealand. The company’s critical core software is used in the administration of insurance businesses, including systems for claims management, policy administration and billing.
Strong revenue and earnings growth
Fineos reported revenue of 40.4 million euros during the first half of FY20, which was up 37.7% on the prior corresponding period (pcp).
Software revenue came in at 13.3 million euros, up by 26.5% on pcp, while the company’s services revenue was 27.1 million euros, up by by 43.9%.
The company reported statutory earnings before interest, tax, depreciation and amortisation (EBITDA) of 6.8 million euros for the first half of FY20, up a massive 85.3% on pcp. Pro forma EBITDA grew even more strongly, rising 207.6% on pcp to come in at 8.9 million euros.
Fineos’ IPO on the ASX (completed in August 2019) successfully raised 62.9 million euros.
The company reported a net increase of 80 staff, primarily in the professional services division, and as a result of the company’s growing headcount, extra office space was obtained in Dublin and a new office lease in Atlanta is being secured.
Fineos recorded pro forma net profit after tax of 2.4 million euros, up from a net loss after tax of 1.1 million euros in the prior corresponding half.
Basic earnings per share came in at 0.08 EUR cents for 1H20 for the company, compared to a loss per share of 0.28 EUR cents in the prior corresponding period.
Commenting on the results, Chief Executive Officer Michael Kelly said:
We have had a very strong start to the year in terms of revenue growth supporting recent contract wins and extra demand from our clients. Following our initial public offering listing on the ASX on 16 August 2019, 5 new customers were signed in North America during the half, while we also made solid progress on another large new name contract that we have closed earlier this month.
Outlook for remainder of FY20
In February 2020, the company was pleased to announce a large new name contract win as well as the signing of an existing client.
Due to rising demand, Fineos upgraded its FY20 revenue guidance range from 80–82 million euros to 84–86 million euros for the full FY20 year.
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