The Citadel Group Limited

Decent Performance in FY18: The Citadel Group Ltd (ASX: CGL) ended FY 2018 with total revenues amounting to $108.5 million which depicted year on year growth (yoy) of 10%. The company posted a profit before tax of $25.3 million during the same period reflecting the YoY growth of 19%. In FY 2018, the results were positively impacted by the robust momentum in the SaaS (software-as-a-Service) contracts. For FY 2019, there are no major contracts and the group is yet to highlight about these. Moreover, the company’s revenue growth was on the back of contract wins, roll out in regard to the agency contract as well as cross-selling. The company’s EBITDA witnessed the growth of 13% to $34 million and its NPAT or net profit after tax stood at $19.4 million implying the YoY growth of 26%.


Financial Performance (Source: Company Reports)

A Look at Citadel’s Outlook: In FY 2018, Citadel witnessed the strong momentum in its business with the help of subscription-based models. This growth is expected to witness strong momentum moving forward into FY 2019. The company has over $800 million in its pipeline of which 60% is in regard to the SaaS opportunities. The company enjoys a robust balance sheet which helps it in achieving growth as well as business investment initiatives. In FY 2018, the company was able to close a significant number of contracts and it also witnessed positive momentum in the client base of SaaS.

Over the past six months, Citadel Limited has been witnessing a strong growth. The stock price has advanced 17.91% during the same period. Moving forward, the company is expected to deliver a robust performance which could positively impact its stock price. Lately, the group announced that the founders sold 10% of their stake for the purpose of boosting liquidity.

In the monthly chart of CGL, the moving average line has crossed the signal for resistance and is currently moving in an upward direction which reflects the bullishness in the stock. Based on foregoing, we give a “Buy” rating on the stock at the current market price or CMP of A$7.7900 (down by 2.4% in last five days as at September 25, 2018).
 
 

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