The Citadel Group Limited

 Productive Year: The Citadel Group Limited’s (ASX: CGL) investors acknowledged the good FY18 performance of the company as the stock gapped up after the announcement last month. The upward price momentum continues on the charts with YTD return of 24%. The price soared as the company reported statutory total revenues from continuing operations at $108.5 million for FY18 compared with $98.8 million in FY17. The board declared the final dividend of 9.0 cents, fully franked with payment date set to September 28^th, 2018. This brings the total FY18 dividend to 13.8 cents per share, full franked.
 

NPAT in $m (Source: Company Reports)
 
Among other achievements throughout FY18, major was the multiple long-term contract with the government agencies for the new cloud software-as -a- service platform. In a bid to expand E-health capacity, Citadel also acquired Charm Health International and Anaesthetic Private Practice. The acquisition of APP would expand the SaaS offerings of Citadel and would be immediately EPS accretive.

Growth to continue: CGL has a total pipeline of above $800 mn with 60% in SaaS opportunities to both new and existing clients. The company would continue to follow its result-oriented subscription-based model for FY19 and would target at least 1 new Citadel – IX customer per month for FY19. Expanding customer base and value addition through acquisitions would under-pin the growth for the company in the current financial year. Stock price is expected to move in tandem with the developments in the company and deliver value to the shareholders. A brief consolidation is being witnessed in the stock after it made 52 weeks high of 7.780. There is no sign of divergence between the stock and indicators. Also, Price is trading above its near-term exponential moving averages ensuring continuation of the current momentum. We recommend a ‘BUY’ in CGL at the current market price of $7.700 considering potential upside ahead.

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