Silverlake Axis: (S$0.545) 3QFY16 earnings dragged by consolidation of Symmetri overheads
- 3QFY16 net profit fell 20% y/y to RM61.5m
- Revenue rose 10%, buoyed by software project services (+87%) and software licensing (+32%), but clipped by lower maintenance and enhancement services (-6%) and product sales (-76%).
- Gross margin contracted to 57% (-11ppt) due to the consolidation of overheads from newly acquired SunGard Ambit
- Management focused on improving their market penetration through its recent acquisitions
- Third interim DPS shaved to 0.65¢ (3QFY15: 1.1¢), bringing 9M payout to 2¢ (9MFY15: 3¢).
- Trading at a forward P/E of 14.1x. Consensus 1 Buy and 2 Hold ratings with average TP of $0.66.
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