Managed print services company CSG Limited (ASX: CSV) has seen its share price gain more than 9% today, currently trading at around $1.38.
CSG has around 40,000 print devices under management across Australia and New Zealand, and supplies consumables, actual printing devices, photocopiers and software solutions. The company partners with some of the giants in the business including Lexmark, Samsung, Toshiba, Fuji Xerox, Ricoh and Canon.
Clients include Australian Federal and Queensland state governments, a number of universities and companies like Spotless Limited (ASX: SPO) – which in turn provides facilities management to corporate clients.
Today the company reported a 14% rise in revenues, but a 43% jump in net profit at $7.0 million for the six months to December 2014. Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at
Investors were clearly happy about the company's decision to reintroduce its dividend at 4 cents, although it's unfranked.
58% of operating profit is derived from service agreements, with another 24% from equipment sales and the remaining 18% from equipment leasing.
CSG says it expects to see full year EBITDA of between $32 and $34 million, after reporting underlying EBITDA of $15.4 million for the first six months. That represents between 10% and 17% growth over the prior financial year. Revenues are expected to grow by at least 10%, and finance receivables – a relatively new business – to grow by more than 30% to exceed $210 million.
Clearly, predictions of a paperless office were wrong. It seems corporates still like to print out and photocopy all manner of documents, despite the rise of the internet and digital communications.
While the use of paper may become less prevalent, printers and photocopiers are still in high demand, which means there's a place for companies like CSG.
