The RPMGlobal Holdings Ltd (ASX: RUL) share price has slipped into the red after the company posted its FY24 results.
RPMGlobal shares are trading 0.85% lower at $2.33 apiece as investors digest the company's annual numbers.
Meanwhile, the S&P/ASX 200 index (ASX: XJO) is up 0.7% at the time of writing.
Let's see what the company posted.
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RPMGlobal share price down despite solid growth
Key highlights from RPMGlobal's annual numbers include:
- Total revenue came to $113.3 million, up 15% year on year.
- Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) $15.3 million, an increase of 28% from FY23.
- Net profit of $8.6 million, representing a 132% rise from FY23.
- Operating cash flows of $16.5 million.
- Repurchased $12.7 million worth of shares at an average price of $1.75 per share.
What else happened in FY24?
The RPMGlobal share price had a strong year in FY24. On the business end, revenues expanded in its software and advisory services divisions.
Advisory revenues were up 20% year over year to $37.5 million, driven by increased demand for battery and critical minerals studies as well as environmental, social, and governance (ESG) consulting.
In its software division, growth subscription models continued their uptrend, with subscription revenue increasing by 16%. In total, software sales were up 14% year over year to $75 million.
Meanwhile, it ended the year with $151 million in pre-contracted software license and maintenance revenue, up more than 420% year over year.
Additionally, RPMGlobal expanded its global footprint, establishing new "Global Framework Agreements (GFAs) with "three of the largest mining companies in the world".
Management expects these agreements to "significantly shorten the process and reduce procurement costs" for the business and its customers. This could impact the RPMGlobal share price.
What did management say?
In the annual report, chairman Stephen Baldwin commented positively on the year, stating:
[FY24] was another year dominated by global events and economic challenges that impacted our staff and customers in one way or another. However, through it all, the company grew revenue across the business, including a 16% increase in software subscription license revenue.
Due to the growth in software TCV sales, at the end of FY2024, the company had $161.0 million in pre-contracted non-cancellable software licence and maintenance revenue, which will be recognised across future years, up $28.8 million from the same time last year.
Baldwin also explained the rationale for withholding the dividend:
The Board has again resolved not to pay a dividend this financial year. The company still has minimal franking credits (less than $0.3 million) and until it starts producing these, it views buying back shares as the most appropriate form of capital management.
What's next?
Looking forward, RPMGlobal is optimistic about its prospects in FY25. The company expects revenue to range between $120 million and $125 million, with operating EBITDA projected between $17.5 million and $19.5 million.
Management also anticipates continued growth in the software solutions division and plans to continue buying back shares in FY25.
We believe RPM is now the mining software vendor of choice for surface miners and has started making good inroads into the underground mining space. with its AMT and ShiftManager solutions.
RPMGlobal share price snapshot
The RPMGlobal share price has faced some downward pressure on Monday despite the company's positive top-line performance in FY24.
The stock has increased more than 42% in the past 12 months and 33% in the year to date.
