Why the RPMGlobal (ASX:RUL) share price is edging higher this week

RPMGlobal shares have rebounded early this week…

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Key points

  • RPMGlobal shares up 2.22% on Monday after the company released its first-half results
  • Robust performance achieved for the six-month period
  • Management advised of a favourable outlook for the near-term future

The RPMGlobal Holdings Ltd (ASX: RUL) share price is hovering in positive territory so far this week.

While the All Ordinaries (ASX: XAO) gained just 0.06% on Monday, sitting at 7,507 points, RPMGlobal shares managed to leap 2.22% to close the day at $1.84.

This follows the release of the mining software company's first-half results for the 2022 financial year.

Let's take a look at what RPMGlobal reported for the front end of FY22.

RPMGlobal share price advances after booking growth across key metrics 

The RPMGlobal share price pushed higher on the back of the company's latest results.

For the 6 months ending 31 December 2021, RPMGlobal achieved growth despite COVID-19 impacting the business. Here are some of the key highlights:

What happened in H1 FY22 for RPMGlobal?

RPMGlobal experienced a strong first-half operating performance, driven by an increase in software revenue and advisory revenue. The segments delivered earnings of $27.8 million, up 23.6%, and $12.7 million, up 64.9%, respectively on the prior year.

Operating expenses came to $34.2 million for the first half due to the acquisition of two Environmental and Social Governance businesses. These were Nitro Solutions and Blueprint Environmental Strategies, for which RPMGlobal paid a total of $3.9 million in completion payments.

The group has been focusing on moving its software solutions into the cloud which resulted in higher development costs.

At the end of the period, RPMGlobal recorded net assets of $65.8 million, including cash of $32.4 million and no debt.

What's the outlook for RPMGlobal?

Looking ahead, RPMGlobal believes operations will return to normal settings by July following the gradual reopening of borders.

The company estimates that a lift in software sales will materialise once mining countries are open for business.

Management noted that selling complex software solutions to global companies is best done in person rather than online.

The company's ESG division is expected to continue performing in the second half, heavily contributing to revenue in the advisory segment.

While the company maintains a positive outlook, given the unpredictable nature of the pandemic, RPMGlobal refrained from providing FY22 full-year earnings guidance.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended RPMGlobal Holdings. The Motley Fool Australia has recommended RPMGlobal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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