IT services provider Cosol Ltd (ASX: COS) has announced some positive outlook for its business at the company’s annual general meeting (AGM) today. The Cosol share price jumped up 4.41% to 71 cents in afternoon trade today. On a year-to-date basis, the company’s share price has risen by more than 245%, making it one of the top newly listed shares on the ASX.
Key metrics from Cosol’s AGM
- Revenue of $11.6 million for the 5.5 month period ending 30 June 2020
- Profit after tax of $1.5 million for the 5.5 month period ending 30 June 2020
- Cash balance of $6.8 million and net debt of $0.12 million at 30 June 2020
- Reduction in debtor days – pre acquisition from 99 days to 45 days at 30 June 2020 – leading to strong cash flow.
Consol also advised it had secured new significant contracts with clients such as the Australian Defence Force and Energy Queensland, among others. The company also reported its financial results were not materially affected by COVID-19 despite not being eligible to receive the Federal Government’s JobKeeper stimulus package.
Half-year F21 results and the year ahead
Consol said its forecast revenue range would be between $15.25m–$15.5m, with operating earnings before interest and tax (EBIT) margins of approximately 16%.
The company expects new opportunities from cross selling its services through the United States-based AddOns Inc acquisition. Cosol says its organic growth path was expected to continue at current levels. The company plans to pay its first fully franked dividends in 2021, with an expected payout ratio of 50% of net profit after tax (NPAT).
A brief look at Cosol
Cosol is an IT services provider, with a particular focus on providing enterprise asset management (EAM) solutions. It listed on the ASX in January and remains one of the top newly listed share performers for 2020.
Cosol’s main offering is the ABB’s Ellipse enterprise software solution powered by Hitachi, and has partnerships with solution providers SAP (NYSE: SAP) and IFS (NYSE: IFS), working largely in the mining industry. It also recently acquired the EAM specialist company AddOns for US$1.5 million. Cosol said the acquisition was in line with its ambitions of becoming a global player in EAM.
Of most significance, Cosol was awarded a $3.24 million contract in August by the Australian Department of Defence to manage the department’s EAM systems.
About the Cosol share price
Cosol listed its shares on the ASX in January at an initial public offering (IPO) share price of 20 cents. It has so far gained more than 245% based on today’s price of 71 cents. At this price, the company commands a market cap of $93.5 million.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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