Dicker Data Limited

Decent Revenue Growth: Dicker Data Limited (ASX: DDR) is into hardware distribution with more than 35 years’ experience. Vladimir MITNOVETSKI recently acquired 55,879 shares of the company at a price of $4.046 via on-market purchase. The revenue for the consolidated entity for the 12 months to 31 December 2018 was $1,493.6 million as compared to $1,306 million in FY17, up by $187.6 million or 14.4%. The company has continued to add new vendors and increased the breadth of products offered by existing vendors whilst still driving growth. The net profit after tax increased to $32.5 million as compared to $26.9 million in 2017, up by 20.5%. During FY18, the company reported EBITDA and Net margin of 3.7% and 2.2% respectively which are broadly in-line with the prior year but lower than the industry median of 15.3% and 10.6% respectively. Similarly, the company is generating better returns for its shareholders than its peers as its ROE of 41.9% which is above the industry median of 16.4% in FY18.

Results Summary (Source: Company Reports)

What to expect from the company: The guidance for FY19 for the net profit before tax is at $51.4 million. Moreover, the company, for FY19, forecasted the group revenue to be $1.65 billion maintaining growth at over 10% for both revenue and profit. The company expects to achieve growth in the Australian business through organic growth and full year contribution from new vendors. The proposed rate for the interim dividends for FY19 will be 5.00 cents per share fully franked. This would amount the total proposed dividend to be paid in the FY19 year to 22.00 cents per share, an increase of 22.2% from FY18 of 18.00 cents per share.The growth in the Australian business is expected to be achieved through organic growth and full year contribution from new vendors.

Meanwhile, the share price of the risen 40.59% in the past three months and is trading close to a 52-week high level of $4.60. Hence, considering the good performance in FY18 over the past year backed by revenue and profit growth, along with decent outlook, we give a “Hold” rating on the stock at the current price of $4.260 per share (up 4.668% on 26 April 2019).

Splitit Payments Limited

Significant growth in top-line: Splitit Payments Limited (ASX: SPT) is a technology-based company, with its operations in credit card-based instalment solutions to businesses and retailers. The sales income for the financial year was USD$789,920 in FY 2018, up from USD$260,409 in FY 2017. Sales income comprised of merchant fees. The addressable opportunity within the key markets is USD$4.5 trillion.
 

FY18 Income Statement (Source: Company Reports)

Among the ratios, the asset turnover stood at 0.35x in FY18 as compared to the industry median of 0.46x, showing that the company is utilizing its assets in a better way than its peers to generate revenue. The current ratio stood at 0.20x in FY18 as compared to 0.10x in FY17, an increase of 93.0%, however this is much below the industry median of 1.8x.

What to expect going forward: Going forward, the company will continue to invest and build strong partnership networks with eCommerce platforms, payment processors, technology services and point of sale providers, banks and large multinational corporations. It will also promote financial freedom and responsible spending for every lifestyle by developing new advanced product features.

Meanwhile, in the span of previous one month, it delivered the return of -29.92% while in the previous 5 days, the return was -11.90%. Currently, the stock is trading below the average of 52 week high and low prices of around $1.152, proffering a decent opportunity for accumulation. Hence considering the aforesaid facts and current trading level, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.925 (down 6.566% on 26 April 2019).
 

Disclaimer
 
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 pages 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.