The Hansen Technologies Limited (ASX: HSN) share price is on the rise today, up 2.27% at the time of writing to $4.06 a share. That's especially impressive when you consider that the broader S&P/ASX 200 Index (ASX: XJO) is taking a pretty big tumble today and is currently down 2.41%.
The catalyst for Hansen's move to the upside appears to be its earnings report for the first half of the 2021 financial year (1H21), posted to the ASX after market close yesterday afternoon.
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What kind of results did Hansen deliver?
It was a sea of green from Hansen in 1H21. The company reported that revenues came in at $147.1 million, a 2% bump on the prior corresponding period (1H20). That's on a constant currency basis (reported revenue was $142.2 million).
That helped the company post underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $54.3 million on a constant currency basis, a 44% increase on 1H20. That represents an EBITDA margin of 36.9%. Reported EBITDA was $52.3 million, which helped push net profits after tax (excluding tax-affected amortisation) up 77% to $31.6 million on a constant currency basis (or $29.6 million reported).
It also helped to push down Hansen's net debt by 18%, which is now down $20.7 million over the half to $95.8 million.
Earnings per share (EPS) also rose 77% to 15.9 cents per share on constant currency (14.9 cents reported).
Due to the surge in profits, Hansen has declared an interim dividend of 5 cents per share, up 67% on the prior period. The dividend represents a payout ratio of 31% of earnings per share and is equal to the company's final dividend for 2H20, although it doesn't come with the addition of a 2 cents per share special dividend that we saw for that period last year. It also only comes 22% franked.
On an annualised basis, that dividend would give Hansen shares a forward dividend yield of 2.46%. The board stated that, "having considered Hansen's capital requirements, strong capital structure and liquidity position, the Board has determined an increased interim dividend to return money to shareholders is appropriate."
Looking forward
Hansen has also upgraded its guidance for the 2021 financial year. The board expects revenues to come in between $295–305 million on a constant currency basis for the financial year (or $285–295 million reported), and underlying EBITDA margins of between 33-35%.
Hansen CEO Andrew Hansen had this to say on the results overall:
The 1H21 result was a great outcome for Hansen across all key metrics, continuing our strong performance through the global pandemic. We have grown revenues 1.9% on a constant currency basis, driven a strong increase in profitability leading to a record half-year EBITDA while investing in our business to position Hansen Technologies for a 'COVID-normal' world… This result proves the long-term resilience of our business modelof growing revenues and EBITDA over the long-term by investing in both our technology and the value accretive aggregation of strategically targeted businesses.
Judging by today's move in the Hansen share price, it seems investors concur.
