Veda Group Ltd (ASX: VED), is expected to report its half-year earnings results on Wednesday, 25 February.
While there was a lot of volatility surrounding the stock between March and September last year, it has remained relatively flat over the last few months. It's now trading at $2.34, which represents an 8.2% discount to its 52-week high of $2.55.
About Veda Group
Veda Group, which listed on the ASX a little over 12 months ago, is Australia's leading data analytics business. It provides data to its customers regarding people's and business' credit histories, thus giving them the ability to carefully select which clients to extend credit to.
There are a number of reasons to suggest demand for Veda Group's services will continue to increase:
- The Global Financial Crisis highlighted the importance of lending only to customers who are capable of repaying their debts
- Interest rates are falling, meaning credit growth could pick up pace in Australia
- The unemployment rate is on the rise, making credit checks vital
- During times of economic uncertainty, companies focus more on the strength of their balance sheets
- The introduction of the Comprehensive Credit Reporting regime allows more data to be provided on each client, thus enhancing Veda Group's product offering
What to expect
When Veda Group reported its full-year earnings back in August, it exceeded its prospectus forecasts for revenue, net profit and EBITDA (earnings before interest, tax, depreciation and amortisation), while it also declared a final dividend of 4 cents per share (twice what it said it would in the prospectus).
Veda Group's CEO, Nerida Caesar, also said she expects all business lines to continue performing strongly to deliver "at least double digit EBITDA growth in FY2015 (financial year 2015) and broadly commensurate growth in NPAT."
Although the stock isn't necessarily a bargain at today's price, if Veda Group's earnings live up to management's expectations, we could certainly see the stock bounce on Wednesday and in the weeks to follow.
