"Hansen Technologies develops, implements and assists in maintaining a wide range of customer support and billing solutions for service providers in the energy, pay TV and telecommunications sectors. Its global client base extends to more than 40 countries providing ideal revenue diversification.
Though the company has in part been a growth by acquisition story, it has also generated strong organic growth under a leadership team extremely focused on generating robust shareholder returns. Hansen Technologies has been profitable every year for the last 10 years and paid healthy dividends each year since 2008.
The company’s interim result featured profit growth of 89 per cent on the back of an increase in revenue of 54 per cent. Hansen has traditionally targeted high margin businesses, and first half earnings before interest and tax margins of 22 per cent indicate this is still the case.
Hansen’s fortunes received a significant boost in the last fortnight with the acquisition of US-based Ventyx, a utilities billing and customer care business.
Ventyx services 30 states throughout the US, as well as Canada and the Caribbean. The acquisition complements Hansen’s existing position in the gas and electricity markets, and its water billing business will provide additional diversification, cross selling and growth opportunities.
The acquisition should also provide a substantial earnings boost with management indicating an additional 10 per cent in annual revenues. Consensus forecasts point to earnings-per-share growth of about 60 per cent in 2013-14, suggesting the company’s price-earnings multiple of about 15 is conservative."
HSN Price at posting:
$1.29 Sentiment: Buy Disclosure: Held
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