Hospital equipment supplier Paragon Care (PGC) has struck the right note with investors with its record earnings announcement this morning.
Not only did it grow profit and sales, but it declared a maiden 1 cent a share fully franked dividend, which could translate to a gross up yield of close to 8% if it keeps paying at the same rate for 2013-14.
The news sent the shares jumping 9.1% to 36 cents, although some might find it curious that management decided on the dividend given that it had only recently completed a $3 million capital raising.
Investors won’t be complaining, especially since management has managed to turnaround in profits with net profit coming in at $740,000 compared with last year’s loss of $77,000 as sales gained 7.6% to $17.1 million.
Further, earnings before interest, tax, depreciation and amortisation (EBITDA) margins more than doubled to 9% from 4%.
Paragon’s sales were a little ahead of company guidance and net profit was at the lower end of what its chief executive Mark Simari was aiming for when he spoke to Eureka Report in May.
PGC Price at posting:
35.0¢ Sentiment: Buy Disclosure: Held
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