Gaming and slot machine software group Quixant (LON:QXT) came up trumps with its half-year results.
The shares were up 9.1% at 240p in late morning trade as the core gaming division saw strong growth in the top line and profits while the recently acquired Densitron division, which specialises in electronic screens, made a healthy contribution.
Revenue in the first half of the year rose to US$41.33mln from US$13.59mln the year before, due in no small part to US$20.1mln in sales from Densitron, which joined the group in September 2015.
Organic revenue growth for the core gaming division was impressive, with turnover up 56% to US$21.2mln.
The group’s underlying earnings (EBITDA) raced ahead to US$6.0mln from US$3.1mln the previous year, with Densitron providing US$1.3mln of that. The core gaming division’s earnings rose 52% year-on-year.
Profit before tax climbed to US$4.4mln from US$2.6mln.
Net debt at the end of June had tumbled to US$3.3mln from US$7.9mln.
The group does pay dividends, but not at the interim stage.
The results statement said the group is in excellent shape, with the gaming division eyeing several opportunities to win contracts with the largest gaming machine manufacturers, while the board is confident enhancements introduced at Densitron will lead to improvements in profitability and growth over time for the division.
“Our core gaming business is going from strength to strength and has continued its track record of revenue and profit growth. I am particularly pleased to see our progress in the largest gaming machine manufacturers and our increasingly diversified customer base. As we continue to diversify our customer base and revenue streams our historic second half weighting will reduce,” said Nick Jarmany, chief executive officer of Quixant.
House broker finnCap described the results as an exceptional first half performance, driven by growing Tier-1 penetration and an impressive contribution from Densitron,
Sales were ahead of the broker’s expectations, prompting it to bump up its full-year forecast a tad.
The broker has increased its target price to 250p, representing 21 times forecast earnings, which it feels is “easily justified by the near 40% earnings growth”.