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Hansen Technologies share price rockets 19% higher on FY20 results

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The Hansen Technologies Limited (ASX: HSN) share price has shot for the stars today after the company released its FY20 results.

The Hansen share price is trading at $3.80, up 19.5% at the time of writing, after reaching an impressive high of $3.88 in morning trade today.

How did Hansen perform in FY20?

For the six months ending 30 June 2020, the leading global provider of software and services to the utilities and communication sectors reported a strong result for its full-year earnings.

Hansen reported a record revenue of $301.4 million, up 30% compared to the prior corresponding period. This was underpinned by a negligible impact from customers during COVID-19.  Increasing revenues of company owned IP of 97% and strong new logo wins contributed to organic revenue growth.

Underlying net profit after tax excluding amortisation jumped to $47.7 million, a surge of 41%.

Reported earnings before interest, tax, depreciation and amortisation (EBITDA) expanded to $80.7 million. A 34% improvement and 26.8% margin on FY19 results. This was due to the integration of its Sigma business together with the rationalisation of the company’s low-cost base driven by COVID-19.

The strong revenue and EBITDA performance allowed Hansen to generate a positive cash flow from operating activities of $44.2 million. In turn, the company repaid creditors $34.9 million to reduce its net debt position to $116.5 million.

Earnings per share leapt 40% to 23.9 cents.

The company strengthened its balance sheet with cash on hand of $44.4 million.

The Hansen board declared a partially franked dividend of 7 cents per share to be paid on 25 September.

What did management say?

Hansen’s founder and CEO, Andrew Hansen said:

The FY20 result was a record result for Hansen across all key metrics, delivered against the backdrop of a global pandemic and the associated uncertainty. It makes me very proud to deliver to our shareholders an outcome like this. As I reflect on the second half of 2020, with our staff working from home and our customers looking to us for reassurance that their systems would not falter, the outstanding team work of the company’s global staff delivered the outcomes our customers were looking for.

This result proves the long-term resilience of our business model of growing revenues and EBITDA … by the value accretive aggregation of strategically targeted businesses.

FY21 outlook

Due to the economic uncertainty that COVID-19 has caused, the company did not provide any earnings guidance for FY21.

However, the board will update the market with the company’s ongoing progress in the first half-year of results.

Management remained cautious during the short-term with an exciting outlook ahead. Specific items of focus for 2021 include developing cross-selling opportunities into the energy market, and leverage of investment in Sigma’s intellectual property. Furthermore, Hansen aims to improve customer delivery and group margins through its low-cost development centres.

About the Hansen share price

The Hansen share price has made a stunning recovery of late, rising 46% from its low of $2.62 reached in April.  For the calendar year, the Hansen share price is trading up almost 10%.

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Aaron Teboneras has no position in any of the stocks mentioned. 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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