With household names like Telstra Corporation Ltd (ASX: TLS), Blackmores Limited (ASX: BKL) and QBE Insurance Group Ltd (ASX: QBE) all reporting their full year results this morning, it would have been easy to miss some of the lesser known names who reported solid results themselves. Below are three who managed to increase net profit in FY19.
This owner and operator of dentists across Australia reported a 1.8% increase in net profit after tax (NPAT) to $7.8 million on statutory revenue of $42 million. The company has announced a final dividend $0.125 per share, bringing the total dividend for the year to a fully franked $0.25. This constitutes a trailing dividend yield of 4%.
The company is very conservatively financed with almost no debt and has a long track record of sound management and increasing shareholder dividends over time.
I consider founder Dr Daryl Holmes to be one of the best CEO’s of any ASX company and his annual letter to shareholders are unique in their candour and shareholder friendly language.
Bailador Technology Investments
Bailador is a specialist investor in the hot tech sector of the ASX. The company reported a whopping 367% increase in NPAT to $17.1 million on the back of gains on financial assets of $32 million.
A number of key holdings within the company’s portfolio were re-evaluated upwards during the financial year resulting in the company reporting net tangible assets (NTA) of $1.31 as at June 30. This is significantly higher than the current share price of $1.02 at the time of writing and might mean it’s worth a closer examination.
Bailador co-founder and Managing Director David Kirk was upbeat regarding the future outlook saying: “We expect to see further valuation uplifts across a number of portfolio companies in FY20.”
Over The Wire
The company provides an integrated suite of data network, internet and voice products for Australian and New Zealand businesses. The company reported an increase in NPAT of 83% to $10.1 million which was boosted by a 49% lift in revenue to $79.6 million.
A final dividend of $0.02 was declared bringing the full year dividend to $0.0325. With earnings per share (EPS) up 64% to $0.207 the company is now trading on a trailing price to earnings (PE) ratio of ~20x.
Whilst the PE ratio should not be used as the sole guide for value, it can help to unearth companies that might be worthy of further research.
My Pick Of The Three
Both Bailador and Over The Wire look to have growth potential but 1300 Smiles is clearly my pick of the three and has been on my watchlist for some time. If market volatility was to lead the share price back below $5.50 I would look to buy shares.
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Over the past five years, these two shares have gone from being 'tiny caps' to being serious contenders for the ASX 200.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Luke has no financial interest in any companies mentioned.