One of the best performers on the All Ordinaries on Thursday has been the Infomedia Limited (ASX: IFM) share price.
In afternoon trade the shares of the leading software provider to the global automotive industry are up 14% to $2.10.
Why is the Infomedia share price rocketing higher?
Investors have been buying the software company's shares following the release of its half year results this morning.
For the six months ended December 31, Infomedia delivered a 19% increase in revenue to $47.9 million and a 24% jump in net profit after tax to $9.04 million. Earnings per share came in 21% higher than the prior corresponding period at 2.86 cents.
This strong performance allowed the Infomedia board to lift its interim dividend by 23% to 2.15 cents (70% franked).
Infomedia reported an 11% increase in its cash and cash equivalents closing position to $17.2 million. It has no debt on its balance sheet.
What were the drivers of its strong growth?
The biggest driver of growth in the first half was its Service product segment. It delivered a 32% increase in revenue to $18.9 million.
This was supported by a 10% lift in Parts product revenue to $27.5 million and a 37% jump in Other revenue to $1.45 million.
Infomedia's CEO, Jonathan Rubinsztein, said: "The APAC and EMEA regions are performing well, and we are optimistic about opportunities emerging in the Americas under a new regional head."
The company is continuing to invest in order to capitalise on the opportunities arising from an industry increasingly focused on technology, data, and aftersales.
Mr Rubinsztein explained: "The additional functionality we are introducing in our core parts and service products is data-driven, collaborative and performance focused. Early indications are positive however we anticipate that any revenue contribution from our investment will be minimal in the 2020 calendar year."
Outlook.
Looking ahead, the company advised that it will continue to invest and remains on track to deliver low double-digit growth in revenue and earnings in FY 2020.
Though, growth in the Americas and the execution and roll-out of data opportunities could contribute potential upside to the result.
Outside this, the board and management remain confident about Infomedia's position in the market and believe it will grow by leveraging its core assets, investing to remain competitive, and exploring acquisitions that support the ability to leverage and compete globally.
