Data#3 Limited (ASX: DTL)

 


          DTL Dividend Details
 
Data#3 Limited (ASX: DTL) has recently nabbed a multi-million dollar deal with Edith Cowan University (ECU) to provide a highly scalable and future proof communications platform, from strategy, design and implementation, through to ongoing management. The project is expected to be completed in early 2016. The company also has reported a strong performance for FY 2015 and, in a highly competitive technology market, has been able to increase revenues while delivering stronger earnings growth. With this in mind, the Board of Directors has been able to increase total dividend to shareholders by 40% over the prior corresponding period. Total revenue was up 4.4% to $ 870.5 million by growing both service and product revenues and the continued transformation of the business saw service revenues grow by an impressive 18.9%. The change in sales mix in both the product and service segments saw growth in total gross margins from 14.3% to 14.9% which saw an increase in total gross profit by 8.9% to $ 129.5 million. EBITDA increased by 39.9% to $17 million while staff costs increased by 5.3% to $ 97.8 million as a result of the company adding 128 staff including 74 through the Business Aspect acquisition. The strong growth is the result of better gross margins and the ability to leverage cost efficiency. Net profit after tax was up 40.9% to $ 10.6 million producing basic EPS of 6.89 cents per share. Cash flow conversion continued to be impressive at 2.3 times with cash flows generated from operations totalling $ 24.3 million. The balance sheet continues to be strong with insignificant debt and net cash position of $ 27 million. Return on equity improved from 22.4% in the previous year to 29.2%.
 


Performance Model (Source: Company Reports)
 
The Board of Directors declared a final dividend fully franked of 4.2 cents per share making a total dividend payment for the year fully franked of 6.3 cents per share. This results in a payout ratio of 91.5%. Total shareholder return during the year was 24%. The annual dividend yield is 5.38%. The stock has skyrocketed over 72% year to date (as at 30 Oct 2015) and is trading close to its 52-week high price. We would recommend that you HOLD the shares at the current price of $1.17.
 
 

DTL Daily Chart (Source: Thomson Reuters)
 

Duet Group (ASX: DUE)

 



                      DUE Dividend Details
 
With the release of regulatory notes by United Energy with regards to the Australian Energy Regulator’s draft decision on UE’s 2016-20 electricity distribution price review wherein tariffs for CY2016 have been proposed, DUET Group (ASX: DUE) affirmed its distribution guidance of 18.0 cents per stapled security for FY16 along with no changes in the medium term distribution growth target. This comes at the back of DUE’s belief that the AER’s draft decision is indicative of current low interest rate environment. AER’s decision issued to UE (part owned by DUE) along with few other players deals with lowering the amount that consumers pay for electricity in Victoria. DUE further updated that the acquisition of Energy Developments Ltd by way of a Scheme of Arrangement was successfully completed and the group now owns 100% providing it with full control of operations, cash flow and the operating capital structure. Further, DUE recently reported that Energy Developments has executed documentation for refinancing corporate debt facility.
 


Corporate Working Capital (Source: Company Reports)
 
DUE’s results for FY 2015 had several highlights. Two pipeline projects WAWP and FRGP were commissioned and will contribute to full-year earnings for the first time in FY 2016. As regards capital, the underwritten placement and entitlement offer of $ 1.67 billion was completed in August 2015 and was strongly supported by institutional as well as retail investors. Over $ 2.1 billion of debt was raised and refinanced at competitive rates. In terms of distributions, the company delivered 17.5 cents per share in line with the FY 2015 guidance and is aiming to deliver 18 cents per share in FY 2016. In terms of consolidated results, revenue from ordinary activities grew by 1.4% to $ 1.26 billion but EBITDA declined by 2.1% to $ 783.5 million and net profit after tax before significant items by 11.1% to $ 77 million. While it is worth keeping an eye on the stock, we recommend a HOLD for the time being at the current price of $2.36.
 
 
 

DUE Daily Chart (Source: Thomson Reuters)

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