Altium Limited

Profit Booking: Altium Limited (ASX: ALU) reported robust performance in the first half of the year wherein NPAT grew by 50.81% to $14.87 Mn in 1HFY18 as compared to prior period (pcp). Revenue from ordinary activities was $63.31 Mn, up 30.01% from last year. Moreover, Basic and Diluted EPS stood at 11.48 cents. Further, the management stated that the group did well in all key financial metrics for the first half of fiscal 2018 and now expects to achieve revenue target of US$ 200 Mn and Margin of 35% or above by 2020. Looking ahead to the full year fiscal 2018, the group will continue to drive its new licenses and subscription pool aggressively in its core PCB business, underpinned by the company’s next-generation products and further systematization of the direct sales methodology. Further, the group will continue to focus on strong fiscal discipline policy to expand margins, while pursuing investment in partnerships and M&A. The group enjoys cash-rich position with zero debt as on 31 December 2017.


1HFY18 Financial Metric (Source: Company Reports)

On the other hand, the group’s CEO Mr. Aram Mirkazemi, has donated 200,000 Altium shares to the National Spiritual Assembly of the Bahai’s of the United States. The donation of shares is for the purpose of Mr. Mirkazemi providing a charitable contribution to the Baha’i Faith. After donating his holding, Mr. Mirkazemi accounted for total holding of 9.6 million shares in Altium, representing 7.38% of the issued capital of the company. Moreover, Vinva Investment Management became the substantial holder of ALU since 26 June 2018 by holding 5.04 per cent of the voting power. Meanwhile, the share price climbed up 59 per cent in the past six months (as at July 10, 2018) and currently trading at a higher PE level.  The stock experienced a short interest of 1.02 per cent (as per the ASIC report of 4 July 2018) and fell about 4.9% on July 11, 2018. Given the stock price rally and mixed updates, we put a “Sell” recommendation at the current market price of $ 20.99, as the stock is witnessing some volatility. The valuation already looked a bit strained with the high run-up of one year (166.7%).

 
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