Is it time to buy shares of Veda Group Ltd?

Veda Group Ltd (ASX:VED) has reported another record earnings result, and expects similar growth in FY16.

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Data analytics business Veda Group Ltd (ASX: VED) has delivered another year of double-digit growth with its results for the 2015 financial year (FY15) exceeding guidance provided by management.

So What: For the 12 months ended 30 June 2015, Veda Group reported a 12.2% lift in revenue to $338.8 million, compared to $302 million in FY14, while its normalised net profit after tax (NPAT) rose 13.8% to $78.4 million. Notably, most of this growth was achieved in the second half of the year which implies positive momentum going into FY16.

While bolt-on acquisitions contributed to the result, the majority of the group's revenue growth was achieved organically. All business lines grew strongly although there was strong emphasis on the business-to-consumer, or B2C, and Marketing Services business line.

Indeed, revenue from the division grew 37.8% year-on-year to $56.1 million, while the group's Consumer Risk & Identity; and Commercial Risk & Information Services divisions grew by 10% and 6.9%, respectively. The Commercial Risk & Information Services division still made up the bulk of the group's overall earnings, accounting for 39.7% of total revenue (compared to 41.6% in FY14).

Encouragingly, management is confident that similar low double-digit growth can be achieved in FY16, although growth in the group's bottom line (NPAT) should be below that of revenue and earnings before interest, tax, depreciation and amortisation, or EBITDA.

This is largely due to increasing depreciation and amortisation charges as a result of its investment in products and data to grow its business and market position. This is particularly important as the company transitions towards comprehensive credit reporting, which should benefit investors in the long-run.

It said: "For FY16 we expect that capital expenditure as a per cent of revenue will be broadly the same as FY15, before gradually declining in the following years."

Now What: Veda Group is the largest credit reference agency in Australia and New Zealand, and plays an integral role in ensuring its customers only extend credit to those individuals and businesses in a position to make full repayments. Its earnings are also somewhat defensive in nature, which makes it a very attractive option for investors in this uncertain economic environment.

Over the last 12 months or so, the shares have barely moved in price. Currently trading at $2.26, this could be an excellent investment prospect for individuals willing to remain patient.

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. You can follow Ryan on Twitter @ASXvalueinvest. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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