It seems to have been a bad day for Hansen Technologies Limited (ASX: HSN), that plunged over 25.6% on June 22, 2018 as the group updated the market about its expected full year FY18 earnings and a soft preliminary outlook for FY19.
The group’s FY18 operating revenue of about $230 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $58 million has been indicated. Full year EBITDA margin is expected to be around 25%, which is below the market expectations and the guidance provided earlier for the EBITDA margin to be about mid-point of target range of 25%-30%. Primarily, the margin is seemingly impacted by contraction in licence fee while the same will now be, in fact, recognised as revenue next year instead of FY18. There also has been a restructuring charge of about $0.8 million within the Enoro operation along with the termination of the challenged call centre contract within the Solutions business. On the other hand, and when compared to FY17, the FY18 operating revenue is still at a 32% growth while EBITDA represents a 26% increase.
HSN for FY19 expects to report lower total revenue, which will be even below FY18 (loss of about $1.8 million against FY18) because of the call centre contract that stands terminated now and normalisation of project revenue post the higher levels seen in 1H FY18. Nonetheless, the expense base will stay as it is in line with FY18 levels despite the group eying for future growth.
This update has not gone well with the shareholders and led to a significant wipe-out in market capitalisation of the group.
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.