The RPMGlobal Holdings Ltd (ASX: RUL) share price is starting the week with a bang.
At the time of writing, the ASX 300 tech stock is up 7% to $2.81.
Investors have been buying the mining software company's shares following the release of its record half year results.
ASX 300 tech stock jumps on results day
- Revenue up 9.6% to a record of $57.9 million
- EBITDA up 20.6% to a record of $8.2 million
- Profit after tax up 30% to $5.75 million
What happened during the half?
For the six months ended 31 December, the ASX 300 tech stock reported a 9.6% increase in revenue from ordinary activities to $57.9 million. This reflects a 6.8% increase in software revenue to $37.7 million and a 15.4% lift in advisory revenue to $20.2 million.
Management advised that the Total Contracted Value (TCV) of software subscriptions and perpetual licences with new maintenance sold during the first six months of FY 2025 was $36.4 million. This is a 36.8% increase over the prior corresponding period.
However, of this $36.4 million in TCV sold, only $0.6 million was recognised in the first half of FY 2025 due to the majority of agreements being concluded in December.
The ASX 300 tech stock's EBITDA increased by $1.4 million or 20.6% over the prior corresponding period to $8.2 million and its underlying profit after tax was up 30% to $5.75 million. This was in line with expectations and guidance.
On a reported basis, its profit was down 30.9%. This was due to the one-off sale of future royalty rights to a simulation product in the prior corresponding period and the first half of FY 2025 including one-off restructuring costs of $0.4 million.
Asset sale
In other news, the ASX 300 tech stock revealed that it has entered into an agreement to divest its global Advisory division to SLR Consulting Australia for an enterprise value of $63 million. This represents multiples of 2x FY 2024 revenue and 8.1x FY 2024 earnings.
Management made the strategic decision to divest the business to focus solely on its Software business. This move aligns with the company's long-term vision of becoming the leading software technology business within the global resources industry.
The company's CEO, Richard Mathews, said:
Throughout this process and building with every conversation the team has held, it has reinforced to us that SLR is a good home for our Advisory employees and clients. SLR has a very clear vision that is aligned with the leadership team of the Advisory business – being focused on becoming the leading global consultancy for environmental and business solutions by delivering quality advice to clients.
I have admired SLR's commitment to its culture, vision, and values, which align with those deployed by RPM's advisory team. I am very pleased to have reached this agreement with SLR and know they will be the right home for our advisory staff and will continue to strengthen the quality of offering the advisory team delivers to its clients into the future.
Outlook
Management spoke positively about its outlook. It highlights that it is actively working with the world's largest mining companies on several productivity software development projects.
It believes this will "solidify and expand the company's reputation as a respected and reliable "go to" software vendor for the mining industry."
However, due to the divestment of the Advisory business, the ASX 300 tech stock feels it is not in a position to provide reliable FY 2025 financial guidance. As a result, it has withdrawn its current guidance and intends to reissue new guidance early in fourth quarter of FY 2025 following closure of the Advisory transaction.
