Cosol Ltd (ASX: COS) shares were advancing today following the company's release of its half-year results. By the market's close, the Cosol share price was up 7.75% to 69.5 cents.
Let's take a look at how the IT services provider performed for the first half of 2021.
What drove the Cosol share price higher?
The Cosol share price pushed higher today after the company surprised investors with a robust performance that exceeded its AGM guidance update.
According to its release, Cosol delivered growth across its key business metrics despite facing headwinds resulting from COVID-19.
The company advised that for the six months ending 31 December 2020, revenue increased to $15.6 million. This reflected a 45% jump on the prior corresponding period. The company expanded its IP and digital solutions business which led to major client wins. In addition, the acquisition of AddOns Inc in October created a platform for deployment into North America.
Statutory earnings before interest and tax (EBIT) also rose to $2.56 million, without the assistance of JobKeeper. The result represented a gain of 32% over the comparable H1 FY20 term. Furthermore, the EBIT margin rose to 16% which was in line with previous forecasts.
Net profit after tax (NPAT) came to $1.85 million, a lift of 35% on the same time last year.
Cosol closed the calendar year with a cash balance of $9.36 million, and $964,000 in net debt.
In further news boosting the Cosol share price, the board decided to declare a fully franked interim dividend of 0.5 cents per share. This will be paid to eligible shareholders on 15 April 2021.
Management commentary
Cosol non-executive chair Geoff Lewis commented on the company's performance. He said:
Despite the headwinds created by the COVID 19 pandemic, COSOL has had a strong six months of operations which has enabled us to exceed guidance and pleasingly, after only 12 months of operations, pay a fully franked interim dividend of 0.5 cents per share.
The COSOL Executive team are focused on finishing the full year strongly and have created a platform with the acquisition of AddOns Inc to expand and grow our offerings to existing clients and potential clients in multiple geographies.
Outlook
Looking ahead, Cosol stated it remains optimistic the company's performance will continue to run throughout the second half. It highlighted a strong pipeline of products that will be used to extend the company's reach to new customers. In addition, Cosol put forward its intention to maintain its investment in and deployment of its digital IP.
Lastly, management revealed it will pay fully franked dividends that equate to a payout ratio of 50% of NPAT.
The Cosol share price is up more than 120% over the past 12 months.
