Hitech Group Australia Limited · ASX:HIT
Hitech Group Australia — H1 2018 Earnings Presentation
24 slides from Hitech Group Australia's earnings presentation, Mar 15, 2018
Slide 1: Half Year Results Institutional Roadshow Presentation
For personal use only Half Year Results (ASX Code: HIT) Institutional Roadshow Presentation 15 MARCH 2018
Slide 2: HiTech overview
HiTech overview For personal use only • HiTech Group Australia Limited is a specialist provider of recruitment and Cloud ICT consulting services Computing & IoT • The term information and communications technology (ICT) is generally accepted to mean all technologies that, combined, allow people and
Slide 3: Key Investment Considerations
Key Investment Considerations For personal use only HiTech is in a strong and unique position to be a key beneficiary of the fast growing technology sector in Australia Stable & experienced Fast growing Changing towards leadership team technology market contingent workforce in Australia Robust finan
Slide 4: Board of Directors
Board of Directors For personal use only Qualifications: BA (Sydney University), DipEd. Raymond Hazouri Experience: Founded HiTech in 1993 and has over 27 years’ experience in the IT industry. Prior to establishing HiTech, Ray worked in a number of capacities in the information technology industry r
Slide 5: Australia ICT industry overview
Australia ICT industry overview For personal use only Historical & Forecast ICT Employment, Selected Sector Spending⁽²⁾ 2011-22⁽¹⁾ A$ BN 2011 2016 2022 30 2016 2019 300,000 25.70 25 250,000 22.00 20 200,000 150,000 15 10.50 9.40 100,000 10 50,000 5 0 0 ICT ICT technical ICT sales ICT trades Electron
Slide 6: Demand for contingent workforce in Australia continues to rise
Demand for contingent workforce in Australia continues to rise… For personal use only 2015 Contingent Workforce 2020 Contingent Workforce 30% Contingent Workforce 50% 50% Non Contingent Workforce 70% 975m Contingent Workers Globally, ~30% of 1.75b Contingent Workers Globally, ~50% total global workf
Slide 7: HiTech FY2017 & 1H FY2018 results highlights
HiTech FY2017 & 1H FY2018 results highlights For personal use only 2015 2016 2017 1H 2016 1H 2017 1H 2018 A$ M A$ M 25 23.32 15 13.28 20 18.26 11.15 15.04 10 15 8.17 10 5 5 0 0 Revenue Revenue • FY2017 Revenue up 27% driven by 28% growth in contracting and 13% growth in permanent placement revenue •
Slide 8: HiTech FY2017 & 1H FY2018 results highlights cont'd
HiTech FY2017 & 1H FY2018 results highlights cont’d For personal use only 2015 2016 2017 1H 2016 1H 2017 1H 2018 A$ M A$ M 5 3 4 3.43 2 3 1.60 2.19 1.24 2 0.99 1.35 1 1 0 0 Underlying EBITDA Underlying EBITDA • Underlying EBITDA continues to grow steadily • 1H FY2018 Underlying EBITDA increased by a
Slide 9: HiTech FY2017 & 1H FY2018 results highlights cont'd
HiTech FY2017 & 1H FY2018 results highlights cont’d For personal use only 2015 2016 2017 1H 2016 1H 2017 1H 2018 A$ M A$ M 4 2.0 3 1.5 2.41 1.07 2 1.0 1.59 0.84 0.69 1 0.81 0.5 0 0.0 Underlying NPAT Underlying NPAT • An interim dividend for 1H FY2018 of 4 cents fully franked has been declared payabl
Slide 10: Strong Balance Sheet and financial discipline
Strong Balance Sheet and financial discipline For personal use only Quick Ratio⁽¹⁾ Net Debt ⁽²⁾ 6.00x A$ M 4.96x 0 4.87x 5.00x -1 4.00x -2 3.36x -1.84 3.00x -3 2.56x -4 2.00x -4.41 -5 1.00x -5.21 -6 -5.94 0.00x -7 2015 2016 2017 1H 2018 2015 2016 2017 1H 2018 HiTech is a resilient and strong company
Slide 11: Specialised service with a winning formulae for success
Specialised service with a winning formulae for success For personal use only • HiTech works closely with select, identified blue chip client base names on talent acquisition • Management intimately understands the key drivers of recruitment and ICT consulting services for its clients • Continually
Slide 12: HiTech revenue breakdown
HiTech revenue breakdown For personal use only 1H FY2018 Revenue Breakdown - Top 10 Clients Average History of Service by Client Type Concentration 19% Australian Govt (Federal & State) Private Sector 81% Years 0 4 8 12 16 20 + Top 10 Others • HiTech has a long history and robust working relationshi
Slide 13: Stable client base – majority are Federal Government clients
Stable client base – majority are Federal Government clients For personal use only 1H FY2018 Revenue Breakdown – Client Type 1.00% 4.00% 1.00% 2.00% 8% 2.00% 2.00% 2% 2.00% 16.00% 4.00% 4.00% Further breakdown of 4.00% 1H FY2018 Federal Govt Revenue 4.00% 10.00% 4.00% 4.00% 13.00% 7.00% 90% Federal
Slide 14: One of the most competitive SMEs in the market
One of the most competitive SMEs in the market For personal use only Sellers awarded contracts FY2018⁽¹⁾ HiTech Group 11 72% Oakton 10 Large enterprises Of the dollar value contracted through the Paxus 6 Marketplace since 29 August 2016 has been SME awarded to SMEs⁽¹⁾ Paper Giant 6 2XM Technology Pt
Slide 15: HiBase - proprietory, predictive database of ICT talent
HiBase - proprietory, predictive database of ICT talent For personal use only • HiBase is a predictive intelligence tool built by HiTech for sourcing talent • A comprehensive up to date database of over 360,000 professional candidates for contract or permanent positions • The HiTech Services team is
Slide 16: Overcoming any technology and competitor disruptions
Overcoming any technology and competitor disruptions For personal use only • HiTech works at the forefront of specialist ICT services • The human element to this work is critical and irreplaceable • Human interaction and decision making will not disappear for critical ICT projects and assignments •
Slide 17: Consistent track record is being rewarded in share price
Consistent track record is being rewarded in share price…. For personal use only Volume in K Price A$ HIT’s Market Capitalisation A$ 1,800 1.20 HIT Market Cap Closing price as of 15-Mar-18 $1.04/share reached A$30M on 28 1,600 Nov 2017 52-week high on 23-Feb-18 $1.05/share 1.00 1,400 52-week low on
Slide 18: HiTech significantly outperformed the S&P ASX Emerging Companies Index
HiTech’s significantly outperformed the S&P ASX Emerging Companies Index For personal use only % 2,500 Historical price movements in % for the last 5 years⁽¹⁾ HIT = 2,200.00% 2,000 1,500 1,000 500 ^XEC = 20.77% 0 03-13 03-14 03-15 03-16 03-17 03-18 (500) HiTech Group Australia Limited (ASX:HIT) - Sh
Slide 19: Significant upside left versus ASX Listed peers
…but with significant upside left versus ASX Listed peers For personal use only HiTech Group⁽¹⁾ Peer 1 Peer 2 Peer 3 Peer 4 ⁽²⁾ Peer 5 Peer 6 Peer 7⁽¹⁾ Shares on issue M 35.15 89.58 67.17 243.87 64.04 117.96 103.87 143.98 Share Price A$ 1.04 0.08 0.16 0.03 1.44 0.13 0.32 0.18 Market Capitalisation A
Slide 20: Significant upside left versus ASX Listed peers cont.
…but with significant upside left versus ASX Listed peers cont. For personal use only HiTech Group⁽¹⁾ Peer 8 Peer 9 Peer 10⁽²⁾ Peer 11 Peer 12 Peer 13 Peer 14 Shares on issue M 35.15 251.49 171.46 154.18 61.52 131.07 515.50 414.95 Share Price A$ 1.04 0.98 0.08 0.17 0.08 0.61 0.02 0.03 Market Capital
Slide 21: A simple Tier growth strategy
A simple 2 Tier growth strategy For personal use only - On-boarding of new clients Organic Growth - Enhance the service offering provided to existing clients by providing a broader suite of recruitment and ICT consulting solutions in addition to base contracting agreements - Expand the company’s ICT
Slide 22: Investment highlights – Investor proposition
Investment highlights – Investor proposition For personal use only - 4 cents fully franked interim dividend was declared in 1H FY2018, bringing total dividends for the last 12 months to 7 cents fully franked Dividends - Annualised gross dividend yield of about 11.0% at the current share price of $1.
Slide 23: Contact information
Contact information For personal use only Elias Hazouri CEO elias@hitechaust.com (02) 9241-1919 www.hitechaust.com Level 9, 189 Kent street, Sydney, NSW 2000, Australia 23
Slide 24: Important information and disclaimer
Important information and disclaimer For personal use only This presentation has been prepared by HiTech Group Australia Limited ABN: 41 062 067 878 (“HiTech”). This document contains background information about HiTech current at the date of this presentation. The presentation is in summary form an
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