Here's why the Enero Group share price leapt 16% today

The Enero Group share price has rallied 16% higher following the release of its FY20 results, which showed resilience despite COVID-19.

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The Enero Group Ltd (ASX: EGG) share price is currently trading 16.55% higher following the release of the company's FY20 results. At the time of writing, the Enero Group share price is trading for $1.66 per share.

The group is an international network of marketing and communications businesses with over 600 staff working in 14 cities around the world. Its key geographic regions are located in Australia, UK and USA. 

FY20 results

Highlights include a 4.9% increase in net revenue to $135.8 million up from $129.5 million in the prior corresponding period (pcp). The increased revenue was driven by organic revenue growth predominately in the USA market. Its international operations accounted for 57% of total revenue and 62% of earnings before interest, taxes, depreciation and amortisation (EBITDA)

Operating EBITDA increased 17.7% to $24.4 million in FY20 compared to $20.7 million in FY19.

Earnings per share before significant items of 15 cents was in line with analysis forecasts and was up 5.6% compared to the pcp.

The directors declared a fully franked final dividend of 3.5 cents payable on 2 October 2020. It brings the annual dividend per share payout to 6 cents per share. Additionally, the dividend is a 9.1% increase in FY20 compared to FY19. 

Enero has high sector exposure to technology, healthcare and consumer staples, which were less impacted by COVID-19. Additionally, it has a low exposure to retail, travel and tourism clients which were more heavily impacted in the second half of FY20. 

Management comments

Ann Sherry, Enero Group chair, commented:

The group delivered an outstanding result particularly during challenging times in the second half of the year…Our strong sector exposure to technology, healthcare and consumer staples resulted in 4.9% organic revenue growth. The group is in a strong position to drive further growth in FY21 despite the health and economic uncertainties that lie ahead.

CEO Brent Scrimshaw added:

Enero is now in a strong financial position to accelerate our momentum and create the next chapter of growth through some of the best performing brands in the market in Australia, UK, Europe and the USA. I will be working with the teams to bring new capability to our existing group offering and investing in the expansion of our network in the coming year.

About the Enero Group share price

The Enero Group share price is currently trading at $1.66, up by 16.55% in today's trade. The group currently has a market capitalisation of $142.45 million.

Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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