Amino has reported FY14 results confirming the positive momentum flagged in the December-14 trading statement. In addition to the welcome return of material revenue growth (H2 +26%), the company reported solid EBITDA margin progression (+1.7pp YoY) and a £1.3m improvement in net cash (now £20.8m or 40p per share). A 45% upward re-basing of the dividend was accompanied by a reiteration of the 10% dividend growth policy. Overall a strong set of results, giving further confidence in the group’s future growth prospects.
Strong financial performance: Amino announced the return to revenue growth, positive margin progression and cash flow in the December 2014 trading statement. In the FY14 results, the company has delivered all three. H2 2014 revenue was 26% up on H2 2013, with H2 EBITDA margin 1.6pp higher. Note the £1.3m improvement in net cash to £20.8m is post a £1.4m share buyback and dividend of £1.9m.
Broadened product portfolio & cost control key drivers: Amino’s recent strategic moves to broaden the product portfolio are a key driver of the improvement in financial performance. Lower specification hardware is finding solid traction in emerging markets. At the higher end, the North American business is performing well, and a key customer in the Netherlands placed new orders for the A150 device towards the year-end. On the cost side, Amino’s focus on securing higher margin business, together with ongoing operational improvements, are boosting profitability.
Dividend increased by 45%: A final dividend of 5.0p represents a very material 45% increase over FY13. In addition, the company reiterated its progressive dividend policy, with dividends expected to grow a minimum of 10% over the next two reporting periods.
Forecasts increased: Following these results, and echoing the upbeat commentary of the RNS, we upgrade our 2015 forecasts (Revenue +4% and EBITDA +3% compared with previous forecasts) and present 2016 forecasts for the first time.
These are an impressive set of results. Amino is demonstrably delivering on its stated strategy to broaden the addressable market via product innovation. Today’s announcement provides additional confidence in the growth story, with the investment case further enhanced by the solid cash position, and the re-iteration of the progressive dividend policy.