Yesterday evening junior automotive technology developer, Infomedia Limited (ASX: IFM), announced a 22% profit increase, to $5.7 million, for the half year to 31 December 2014.
Infomedia, which was recently admitted into the S&P/ASX300 Index (INDEX: ^AXKO) (ASX: XKO) following explosive share price appreciation, saw sales revenue jump 5% to $29.3 million with Superservice sales growing 8% – excluding Electronic Parts Catalogues (EPC). It also saw EPC revenue growth of 4%.
Net assets grew to $42.6 million with $13.3 million in cash and no debt.
Pleasingly, earnings per share jumped 21% to 2.28 cents whilst an interim dividend of 1.94 cents per share was declared, up from 1.89 cents per share a year earlier. The dividend will be payable on 18 March 2015.
Commenting on the results Chief Executive Officer, Andrew Pattinson, said: "Whilst our EPC business remains strong, I am particularly pleased with the success of Superservice pilots over the past 6 months. It is good to see individual dealers signing up and we are focused on broader commercialisation in the near future."
Shares of Infomedia were heavily sold down recently following an announcement from the company stating its key contract with Jeep Land Rover wouldn't be renewed. However the company today confirmed its most recent full year guidance, expecting net profit after tax, or NPAT, to exceed $13.7 million. This would represent a 12% increase from last year's $12.3 million.
Should you buy Infomedia shares?
At $1.02 per share, Infomedia trades on an unfranked dividend yield of 3.7% and a forward price-earnings ratio of around 20, which doesn't appear demanding given its growth prospects. Especially if its Superservice solutions continues to gain traction with more dealerships.
