RPMGlobal share price dips despite 20% revenue surge

The RPMGlobal Holdings Ltd (ASX: RUL) finished the day 4.78% in the red at $1.495 following the release of its FY22 results.

Trading volume was more than 5x higher than the 4-week average today at 1.315 million shares, suggesting investors sold positions en masse during the session.

RPMGlobal grows revenue in all areas

Key takeouts from the company’s results include:

• Revenue grew 20% year on year to $84.1 million
• Advisory revenue saw a $9.1 million growth on FY21’s result
• Software Consulting revenue increased by $1.3 million over the 12 months
• Net operating revenue was stronger and grew 18% from the previous year
• FY22 EBITDA of $4.5 million, down from FY21’s result of $5.5 million
• Loss after tax of $4.1 million, down from a loss of $5.1 million the year prior

What else happened last period for RPMGlobal?

Growth was strong across all operating segments for the company in terms of revenue. Net operating revenue also grew 18% year on year.

This came down to a net loss after tax of $4.1 million, ahead of last year’s result of a $5.5 million loss.

The company also booked a $1.1 million loss from closure and one-off M&A costs associated with the conflict in Ukraine.

As at 30 June 2022, RPMGlobal also had $95.5 million in pre-contracted, non-cancellable software
subscription revenue.

This is up $29.8 million from the same time a year earlier from $65.7 million.

Management commentary

In his directors report to shareholders, RPMGlobal chairman, Stephen Baldwin said:

At a time when other software vendors to the mining industry were reducing their software investments due to the impacts of COVID, RPM once again increased its research and development spend by an additional $3.3 million to accelerate its transition towards being a “software as a service” company.

This investment continues to open new opportunities for the company, while enabling us to provide a more comprehensive service offering to our customers.

What’s next for RPMGlobal?

The company projects FY23 total revenue to be in the range of $101 million and EBITDA to be $14.2 million.

“For the fourth year in a row, RPM will set a new software sales record for the company,” RPMGlobal announced.

This is backed by a flattening of software expenditure in the coming 12 months. The company finalised:

With our transition from perpetual to subscription license sales completed, the operating leverage provided by the $95.5 million in precontracted software subscriptions will now start to flow through into the company’s financials.

RPMGlobal share price snapshot

Over the past 12 months, the RPMGlobal share price has fallen 22%.

The post RPMGlobal share price dips despite 20% revenue surge appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 ASX All Ords shares tumbling lower following full-year results
• The BrainChip share price has dumped 30% in a month. What’s happening?
• This ASX All Ords share flew higher on a 230% profit boost
• Here are the top 10 ASX 200 shares today
• Why did the Lake Resources share price plunge 10% today?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended RPMGlobal Holdings. The Motley Fool Australia has recommended RPMGlobal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/3LsqPdC