Castleton Technology (LON:CTP) Final Results 2019

18th Jun '19 by InvestorJohn

4 comments 1167 reads

Castleton Technology (LON:CTP) Final results out today look positive

This is a good summary from Dean Dickinson, CEO of Castleton, :

"It has been another year of significant progress for Castleton, delivering strong organic growth at both revenue and EBITDA level underpinned by healthy cash generation. This has not only resulted in the continued reduction in net debt, but it has also enabled operational growth through the acquisition of Deeplake

(Earnings per share at a basic level were 5.08p, compared to earnings per share of 5.23p in the previous year)
I also noticed that a maiden (first) dividend of 1p per share has been announced - its good to see the start of Dividend payments and is usually a good sign

Not sure about this line
The one area that has not yet lived up to our expectations is our Australian Operation (reported within our Software Solutions division) - we have taken action to address this, but it has had a slight impact on our outlook for next year.

Also...

Trading since the end of the financial year has been in line with expectations and we expect to see seasonality between the two halves of the financial year, with earnings and cash flows being stronger in the second half than the first half.

Why is it that so many companies are H2 weighted?? Is this just them being optimistic that they can recover lacklustre progress in the first half? We seen this recently with Filta Group (LON:FLTA) and the market didn't like it...

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TamzinPiworld

19th Jun '19

CTP FY19 results overview by Dean Dickinson, CEO & Heywood Chapman, CFO

https://www.piworld.co.uk/2019/06/18/castleton-technology-ctp-full-year-results-to-31st-march-2019/

A full c.1 hr results presentation (recorded 18.6) will follow in due course.

Gromley

Companies 'expecting' a H2 weighting seems to me (by casual observation - so possibly wrong) to have become more prevalent in the last year or so, which I would surmise might be indicative of businesses struggling somewhat.

I do though think that it is important to differentiate between businesses that "naturally" have a H2 weighting and those that are just claiming/hoping to catch up on a poor H1.

At face value Castleton Technology (LON:CTP) do have a track record of H2 to been busier than H1

So the expectation of a H2 weighting in the coming year does not seem to be necessarily a false claim.

However, what does come out from looking at the numbers in this way is that H2 2019 was significantly weaker in terms of growth than the recent past.

So without knowing ANY detail behind CTP I would be inclined to possibly interpret the statement as saying "H2 was relatively weak and H1 is looking similar so far". With the stocko figures projecting a 13% revenue growth this year, it looks to me like a amber flag that they have some catching up to do to achieve the forecasts. (Although those forecasts probably do not yet reflect the "slight impact on our outlook for next year."

So the slight weakness in the share price looks as though it might be justified.

I should reiterate though that I have no detailed knowledge of Castleton Technology (LON:CTP) whatsoever so this is really just a very high level view. (There may be more justifications in the detail)

InvestorJohn

Thanks for those reflections Gromley! We will have to wait and see

Hi Tamzin - thanks for these videos they are super useful

Castleton Technology (LON:CTP) Final Results 2019

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InvestorJohn

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