The People Infrastructure share price soars 116% in 12 months

While the ASX 200 has enjoyed a record start to 2019, the People Infrastructure Ltd (ASX: PPE) share price has done even better – climbing 116% in just 12 months.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

While the S&P/ASX 200 (INDEXASX: XJO) index has enjoyed a record start to 2019, the People Infrastructure Ltd (ASX: PPE) share price has done even better – climbing 116% in just 12 months.

So why is this Aussie workforce management company's stock suddenly so hot, and can the growth train continue in the second half of the year?

Strong organic growth shows solid operating profile

The People Infrastructure share price hit a 52-week high of $3.36 per share on Friday and soared a further 7% in yesterday's trade as the company's capital gains continue to accumulate.

One big driver in the company's 12-month share price performance has been management's ability to grow the business both organically and inorganically through strategic acquisitions.

The company reported solid first-half 2019 earnings through to 31 December 2018, headlined by revenue climbing 24.7% higher year-on-year (YoY) to $133 million.

People Infrastructure's earnings before interest, tax, depreciation and amortisation (EBITDA) rose 35.6% higher YoY to $8.4 million, while adjusted net profit after tax (NPATA) came in 50.5% higher at $6.1 million.

Strategic acquisitions boost share price higher

While business has been humming along nicely for the workforce management group, key acquisitions over the last year or so have also propelled the share price higher.

In March this year, the company announced that it had agreed to acquire leading healthcare business Victorian Nurse Specialists Pty Ltd for $2.5 million, payable on a cash and debt-free basis.

The acquisition was designed to improve the company's healthcare offering in Victoria, with a number of cross-selling benefits in providing nurses to its disability sector clients and leveraging its combined workforce across the entire sector.

The company also announced that it had acquired the remaining outstanding shares in its existing IT business Recon Solutions and Project Partners for $2.8 million, as it looked to strengthen its overall operating profile.

In mid-June, the People Infrastructure share price surged higher yet again as it announced that it would acquire two leading Queensland healthcare staffing agencies, First Choice and Carestaff. Both acquisitions were completed yesterday.

Overall, People Infrastructure has been a top performer over the last 12 months and currently boasts a market cap of $241 million, which could go higher if the company continues its current growth trajectory later this year.

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended People Infrastructure Ltd. 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 Scott Phillips.

More on Growth Shares

Two players on a field pump their fists in the air, indicating two of the best
Growth Shares

The ultimate ASX growth shares to buy with $5,000

Brokers are very bullish on these names. But why? Let's find out.

Read more »

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Growth Shares

Where to invest $1,000 into ASX shares in June

These shares could be buys according to analysts.

Read more »

Young female investor smiling and speaking on mobile phone while sitting in front of laptop
Growth Shares

Looking for ASX growth shares? I rate these 2 as top buys for June

I’m very excited about the growth potential of these stocks…

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Growth Shares

3 high-conviction ASX growth shares to buy

Analysts have good things to say about these stocks.

Read more »

happy investor, share price rise, increase, up
Growth Shares

Where to invest $5,000 into ASX growth shares now

These shares could be destined for big things according to analysts.

Read more »

ETF spelt out with a piggybank.
ETFs

Want to buy ASX growth shares? Consider these ETFs instead

Growth ETFs can be easier to invest in than shares.

Read more »

A businessman compares the growth trajectory of property versus shares.
Growth Shares

Are these 2 top ASX growth shares buys?

ASX growth shares can deliver strong results. Should these stocks be in your portfolio?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Growth Shares

These ASX growth stocks could rise 80% to 100%

Let's see what brokers are tipping as buys with big return potential.

Read more »