The technology provider that underpins billing for key services like electricity and gas has sat on our hitlist for the Emerging Companies Portfolio since February, and we continue to like the story.
HSN -3.93%: the utility billing software company reported HY numbers, coming in largely in line with expectations with shares trading lower with the weaker technology sector today. Revenue was flat and in line with consensus at $149m while EBITDA fell 17%, slightly below expectations.
The billing software provider has fallen ~10% over the last few weeks, catching our eye ahead of their 1H results next week. The company has strong defensive qualities with their technology used in telecommunication and utility provider systems globally, historically seeing low levels of churn, strong cashflow generation and the ability to pass on inflation-linked price increases. They also have a solid M&A track record and a significant war chest to go after accretive acquisitions with such a strong balance sheet. Shares have been in no man’s land since BGH walked from takeover talks last year, however, the company has proven there are no skeletons in the closet and contract wins are coming through. We expect to see earnings grow from FY24 onwards, with near-term upside in M&A likely to prove the stock is cheap on just 18x PE multiple i.e. this is a profitable tech company, not one burning cash!
HSN -9.24%: the software company struggled today after BGH walked from takeover talks. The private equity group had offered $6.50/sh for the utility billing software business in early June, which was a 25% premium to the prior close. The deal has fallen through following 3 months of due diligence, though the bidder did not cite a reason as to why...
Hansen Technologies Limited is an Australia-based company, which is engaged in the development, integration and support of billing systems software for the energy and communications sectors. the Company’s other activities include information technology outsourcing services and the development of other specific software applications. The Company’s software products offering include energy and utilities, and communications. It create-deliver-engage for energy and Utilities suite while enabling energy and utilities to grow from new business models. It create-deliver-engage suite for communication services providers is comprised of catalog-driven cloud applications. Its energy and utilities solutions include community solar, streamline energy services selling, distribution system operators digitalization and district heating. Its communications solutions include ready for fifth generation, enabling Internet of things businesses, business-to-business complexity and omni-channel commerce.
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