The RXP Services Ltd (ASX: RXP) share price looks set to be a big mover this morning after the technology and digital services provider announced its half-year results for the six months ended December 31 2016.
Key highlights include:
- Half-year revenue up 26% to $70.6 million, driven by strong growth in digital services.
- Half-year EBITDA of $9.2 million, up 31%.
- EBITDA margin of 13.1%.
- First-half earnings per share up 35% to 2 cents.
- Interim dividend of 1.5 cents per share fully franked, payable 4 April 2017.
On Monday the DWS Ltd (ASX: DWS) share price hit a new 52-week high after it delivered a strong half-year result. I believe RXP Services could be set to follow in its rival's footsteps after this impressive performance.
The key driver was its digital services business thanks to the ongoing evolution of digital technologies. Management believe its focus on "design thinking and innovation" has resulted in new client and project wins.
Despite the stronger than expected result, management has retained its full-year guidance of revenue growth of 10% to 15% with an underlying EBITDA margin between 13 and 14%.
Is it a buy?
Even after the 35% gain in its share price in the last six months, I still believe RXP Services is a buy today. At 12x trailing earnings I feel its shares represent great value for money considering its high levels of growth and strong industry tailwinds.
A further bonus in my opinion is its dividend. Its shares currently provide a generous trailing fully franked 3.7% dividend.
There's a lot of choice in the industry for investors with the likes of DWS, Technology One Limited (ASX: TNE), and SMS Management & Technology Limited (ASX: SMX). But RXP Services would be the pick of the bunch as far as I'm concerned.
