The People Infrastructure Ltd (ASX: PPE) share price has been on form on Tuesday and is storming notably higher.
The leading workforce management company’s shares are currently up over 8% to $2.64.
How did People Infrastructure perform in FY 2020?
For the 12 months ended 30 June 2020, People Infrastructure delivered a 34.5% increase in revenue to $374.2 million. This was despite the company’s customer base being impacted greatly by the pandemic during the second half.
Pleasingly, the company was able to expand its normalised earnings before interest, tax, depreciation and amortisation (EBITDA) margin during the year to 7.1% from 6.4% in FY 2019.
This led to the company’s normalised EBITDA growing at an even quicker rate of 49.2% to $26.4 million. This was 7.8% higher than its most recent guidance for FY 2020.
On the bottom line, People Infrastructure’s normalised net profit after tax and before amortisation (NPATA) came in 53.3% higher year on year at $18.4 million. On a per share basis, this came to 20.5 cents.
Another positive was its strong operating cash flow generation during the year. People Infrastructure recorded operating cashflow of $27.1 million, which led to it finishing the period with a cash balance (net of debt) of $9.9 million.
This allowed it to declare a fully franked final dividend of 4.5 cents per share.
Management commentary.
People Infrastructure’s Managing Director, Declan Sherman, appeared to be pleased with the company’s performance given the challenges it faced.
He said: “People Infrastructure confronted a number of challenges in FY20 due to the impact of Covid-19. Whilst the business was immediately impacted at the outset of the first wave of Covid-19, it has shown tremendous resilience to bounce back strongly over the last few months. As a result, we are pleased to announce an increase in earnings in FY20 and strong cashflow generation throughout the year.”
Outlook.
No guidance has been given for FY 2021, but management appears positive on its growth prospects in the future.
Mr Sherman said: “Looking forward into FY21, whilst we are aware that the economic and operational uncertainty relating to Covid-19 may have implications for our clients, we continue to focus on driving growth in niches where we can demonstrate a clear point of difference in our product and services offering. We continue to look at both the opportunity to grow organically into new sectors as well as acquisition opportunities that would expedite that growth.”
In respect to acquisitions, the company notes that its balance sheet gives it the opportunity to complete $80 million to $90 million in acquisitions with funding through debt and free cashflow.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended People Infrastructure Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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