Hansen Technologies - HSN

[Lizard]

Hansen is a steadily growing software services coy operating in the utilities space. Like many of the more successful tech companies, they generate good margins and high ROE. They also have a strong balance sheet.

Revenue for FY10 was $58m with NPAT of $11.1m (albeit on a lowish tax rate - tax normal is more like $9.8m). At NPBT level, profits were up 28% on prior year. Cash on hand was $23.4m (no debt) and the company paid 5cps of fully franked dividends.

Outlook is currently "optimistic" of another strong year, but currency has the potential to erode returns from offshore business. The high cash on hand means there is likely to be further growth by acquisition, as per today's announcement of Nirvanasoft acquisition.

This is a strong cashflow business, trading on undemanding ratios. At 80cps, the P/E is 11.1 and yield 6.25%. The balance sheet provides the strength to grow through acquisition or to increase dividends.

Share price has been consolidating the last couple of months, but could be ready to move up - depending perhaps on any outlook statement at the AGM on 25 November. Could be a longer term growth opportunity. I've taken a small position to follow, but will await for stronger outlook before adding.

[mark100]

Thanks Liz. Its been on my list since the FY report. I was too slow when it pulled back to low 70s mid Sept and have been hoping for a low 70s entry ever since

[Lizard]

Has provided that low-70's entry for a few weeks now - I was thinking the exchange rate might have been hurting a bit, but seems they are on track with solid HY result forecast of $8.5m NPBT, so looks set for another good year.

[mark100]

Hi Liz, I bought some on open. I decided to wait for earnings confirmation, which now look to be very good

[Lizard]

Well done Mark. I misjudged the open and didn't manage to add to my pile, but expect to add some more soon.

[mark100]

Nice forecast from HSN, despite the currency headwinds. PBT forecast to come in at $17m, up 20%. Looking at previous tax rates I estimate NPAT could be around $13m and EPS 8.3cps so its trading at less than 11x FY11. With plenty of cash on the balance sheet HSN appears to be a cheap growth stock

[Lizard]

Yes, agree Mark.

I don't exactly see this as a profit upgrade, since I hadn't recorded them as giving an actual forecast and this is simply a repeat of first half performance, but agree that it looks strong, especially in light of currency and cash reserves. I'm never quite sure why the share price isn't over $1, but perhaps the sales by one of the Hansen family may have kept it down?

[percy]

Criterion in the http://www.theaustralian.com.au/business/opinion/dollar-immune-local-tech-star-spotted-at-last/story-e6frg9lo-1226066753574 dollar immune local tech article rates Hansen a buy.

[mark100]

HSN is one of the few stocks holding up at the moment. In fact it may even be trying to start an uptrend from its recent trading range?

A good result has already been forecast and probably a 3c div as well

[Lizard]

The small-cap yield/value side seems to be doing relatively well at the moment. I might go back and check through the rest of KW's yield thread to see if has been across the board.

[Lizard]

Managed to beat recent forecast and come in at $13.5m NPAT despite forex. Has near on 14cps in cash on hand behind the 87c share price.

P/E 10.1, EV/EBIT 6.4, Pr/NTA 4.1, P/S 2.4, yield 6.90% + partial franking.

[mark100]

HSN is very nice value at current levels. PE now under 10, yield over 7%, nice stream of annuity revenue, aussie dollar has eased back, earnings growing and relatively defensive. Plus the big pile of cash. I added to my holding on Friday arvo when someone dumped in the closing auction down to 81.5c.

[Lizard]

Into the All Ords... (and out of FIF Regime for NZ holders!)

Thought the HY was pretty steady given the market conditions, although market seemed a bit disappointed and has sold it down a little.

[Lizard]

FY result a little disappointing, as came in below pcp due to softer conditions in second half. Market selling a little, down to 97cps at present, but had run up into result. However, commentary is more ebullient than last year, so will take the 6.1% div yield and wait a bit longer for hoped-for growth.

[David Hardman]

Been a nice run for HSN recently.

They look to have timed their overseas acquisitions nicely when the AUD was strong. With these new acquisitions incorporated their revenue mix has changed considerably over the last few years. 60+% now being earned in non AUD. HSN is going to benefit nicely from the weaker AUD.

2014 - 80mil in revenue, 20mil EBIT forecast. Current market cap 204m. %5 divi as well!

Anyone else in this?

[zcyong]

looks another good run for HSN

[David Hardman]

Quality "boring" tech company with a long history of actually making money and paying dividends to shareholders.

Good news out today locking in a key major client to a 7 year deal. "Underpins current revenue stream"

Chart looking going with a break into 10 year highs

[David Hardman]

2015 revenue forecast to be 90m+ @ 25%+ EBITDA margin.

Gives us an EPS around 13.5

Current PE around 10

6cps dividend - 4.3% yield

Good value IMHO

[David Hardman]

2015 revenue forecast to be 90m+ @ 25%+ EBITDA margin.

Gives us an EPS around 13.5

Current PE around 10

6cps dividend - 4.3% yield

Good value IMHO

Never mind 2015. Looks like they pretty much got there in 2014!

Operating results upgrade.

Hansen Technologies Limited (ASX: HSN) is pleased to announce an upgraded outlook to its operating results for the full year to 30 June 2014.
Andrew Hansen, CEO of Hansen Technologies said, “I am pleased to advise that our strong performance in the first half of this fiscal year has continued throughout the second half resulting in record revenues and operating performance this year”.
Hansen advises that the revised expectations for the operating results for the Fiscal year ended 30 June 2014 are:
 Operating revenue of approximately $86 million, representing a 34% increase on the previous year,
 EBITDA of approximately $24 million, a 52% increase on the previous year,
This outlook is still subject to finalization and completion of the Audit process.
Further details regarding the company’s performance for Fiscal 2014 will be provided with the formal release of the financial results, currently targeted for 26 August 2014.

[mark100]

Yes great result. But I estimate EPS around 9.5cps from that result. How are you getting 13.5cps?

[Lizard]

Well done... I wish I hadn't given up on them in boredom after seeming years of 80c-$1 trading...(approx).

[David Hardman]

HSN knocking up against all time highs with a nice asc triangle

Nice recent summary here

http://shares.intelligentinvestor.com.au/articles/Hansen-Technologies-HSN/Hansen-upgraded-to-Buy-10862289.cfm#.VFwLlSuSzTw

[babymonster]

Another upgrade today

[David Hardman]

Been a great performer over the last few years.

New highs today on good volume.

[Westboy]

This is an extremely high quality company IMHO, my second biggest holding. Operating cashflow last report was better than good. They have management who under promise and over deliver all the time. I would expect another Hansen family sell down in the next 4 months which should only add to liquidity over time. I note a very skinny dividend and a DRP so I expect they are eyeing another acquisition. These guys are good at buying and integrating an acquisition! The real easy money has been made 18 months ago but I still feel this stock can produce 20-25% returns for shareholders over the next few years!

[Snow Leopard]

Another good result with a nice outlook for full year.

Best Wishes
Paper Tiger

[Snow Leopard]

Just read through the AGM Presentation (http://www.stocknessmonster.com/news-item?E=ASX&S=HSN&N=461006) which the market seems to like.

Now much as I like this company and own a few shares in them, they do trade on a historical P/E of 30 and if you take the midpoint of guidance for FY17 then there is going to only a little growth at the NPAT level this year (upside would be +15% and downside -9%).

Unless I am missing something here ?

Staring into the dim and distant future one would hope that they can continue to grow at a reasonable clip and whilst the SP trend is up then no worries.

Best Wishes
Paper Tiger

[Joshuatree]

That was my shallow graze too PT re guidance a lot lower than FY16.Wish i'd never sold it way back.They have an under promise over deliver kinda culture I'm thinking.Been at it 40 years.Stability plus solid simple steady growth over much of its more recent past anyway.