Information Services Corp (TSX:ISV) (ISC) has reported growth in revenue and net income for the first quarter and announced a dividend of 23 cents per share for the period, while it reiterated its guidance for the full year.
Revenue amounted to $44.2 million in the three-month period to March 31, 2022, a rise of 13% on the same period the year before, driven by continued organic growth in the Services business, increased revenue from Recovery Solutions as well as new revenue from the acquisition of UPLevel mid-way through the first quarter. Registry Operations also contributed to increased revenues due to strong activity in the real estate sector.
Net income climbed to $7.4 million, or 42 cents per basic share, from $5.5 million (31 cents per share), while earnings before interest, taxes, depreciation and amortization expense (EBITDA) jumped 17% to $13.8 million.
"After an outstanding year in 2021, we have continued to deliver excellent results for the first three months of 2022. Most notably, our Services segment exceeded our Registry Operations segment for the first time ever on a revenue basis while Registry Operations continues to make a significant contribution on an EBITDA basis." Shawn Peters, the company president and CEO said in a statement.
READ: Information Services named to the Globe and Mail's women lead here benchmark of executive gender diversity
"As the year continues, we will be making investments in people and technology to further strengthen our overall business. In Services, we are enhancing our technology for our Recovery Solutions customers that will complement our Registry Complete offering, which has been very well received since it officially launched last year.
“We will, of course, continue to actively explore appropriate acquisition targets that complement or add value to our existing lines of business or provide new key service offerings that will also drive value," he added.
Commenting on the outlook for the full year, ISC repeated its previous forecast that 2022 will exceed pre-pandemic levels, “even though we do not expect to see the same level of economic activity we saw in 2021”.
The company reiterated its 2022 guidance for revenue of between $168.0 million and $173.0 million, net income of between $23.0 million and $27.0 million, and EBITDA of between $48.0 million and $53.0 million.
ISC said registry transactions have begun to return to more normalized, pre-pandemic levels, while the Land Registry is anticipated to begin to return to more normalized levels midway through this year.
The company said the Registry Operations segment will remain a healthy contributor to its 2022 results, while it expects the Services business to continue to deliver organic growth, fueled by continuous technology advancements driving operational efficiency and new product innovation.
In Technology Solutions, the company said it expects to see the completion of a number of solution delivery projects where milestones previously set for 2021 were deferred to 2022.
The 23 cent dividend will be paid on class A limited voting shares on or before July 15, 2022, to shareholders on the record as of June 30, 2022.
Free cash flow increased to $11.0 million in the first quarter compared to $8.9 million in 2021. ISC had cash of $23.4 million at the period-end, compared to $40.1 million as of December 31, 2021. Total debt was $41.0 million at the end of March, compared to $41.0 million at end-December 2021.
The company is holding an investor conference call today, Thursday, May 5, 2022, at 11.00 am ET to discuss the results. An audio webcast of the conference call will be available here
ISC is the leading provider of registry and information management services for public data and records. It provides solutions to manage, secure and administer information through its Registry Operations, Services and Technology Solutions segments.
ISC is focused on sustaining its core business while pursuing new growth opportunities.
Contact the author at jon.hopkins@proactiveinvestors.com