HY report out tomorrow (thursday). Based on AGM address and how EPD is focusing on SaaS including cloud i'm expecting the HY report to please Mr Mkt. I expect they'll state 2H earnings will increase significantly and that converting customers via Microsoft to host in cloud is set to continue.
Cloud hosting brings a firm:
Regular annuity type income.
Allows additional add on sales (SaaS) to be made to client.
Extended contracts ensuring guaranteed income.
Margins are good.
Today's HY result from competitor DTL show they've ramped-up revenue from cloud by 44% and margins in this sector have leapt by over 15%. Similar for TNE who have extrapolated out to 2021 illustrating the massive jump in income cloud will produce.
DTL are Australia's biggest seller of cloud for Microsoft. EPD are in top 4 and climbing. Could be #2 in a couple of years. Plus in NZ and WA Empired have excellent contracts with the govt sector.... just like DTL and TNE.
At mkt cap of just 55m EPD is one fifth the size of DTL and a pipsqueek compared with TNE. Many of EPD's competitors are in acquisition mode and is it a stretch to suggest EPD could become a TO target? I've been buying on Monday based on EPD's own merits.... but a TO wouldn't be unwelcome should it eventuate.
SaaS and esp cloud is excellent niche and I sold my DWS shares as they appear to be ignoring cloud and the huge potential it offers.
Anyone else bought recently/today?
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