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- Tech specialist Appen (APX) has slumped this morning despite reporting sturdy growth to revenue and profit over the half-year plagued by COVID-19
- The company boosted revenue by 25 per cent compared to the same time last year, coming in at $306.2 million for the first half of 2020
- Earnings before interest, tax, depreciation and amortisation (EBITDA) was $49.1 million for the half-year, up six per cent on 2019
- However, underlying net profit after tax was soft, down three per cent on last year’s result to $28.9 million
- Thus, despite a half-franked 4.5-cent interim dividend, Appen shares are down almost 13 per cent and worth $37.92 this morning
Tech specialist Appen (APX) has slumped this morning despite reporting sturdy growth to revenue and profit over the half-year plagued by COVID-19.
The company recorded a 25 per cent boost to revenue compared to the same time last year, coming in at $306.2 million for the first half of 2020 compared to the $245 million from the first half of 2019.
Appen recorded underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $49.1 million this half-year, six per cent up on last year’s $46.3 million.
However, Appen managed to pocket $28.9 million in underlying net profit after tax (NPAT) for the six months to the end of June 2020, which is three per cent lower than last year’s $29.6 million. On a statutory basis — meaning accounting for one-off costs and gains — Appen’s NPAT was $22.3 million and 20 per cent higher than last year.
Appen specialises in data annotation and artificial intelligence (AI)-based training. As such, the company was able to thrive in the COVID-19 era given the global switch to at-home work and online entertainment.
Appen Chairman Chris Vonwiller said the company is especially please with the strong half-yearly result given the challenges presented by the pandemic.
“The strength of our business model, market exposure, competitive position and our consistent execution give us the confidence to push forward with our investments to solidify future growth,” Chris said.
In fact, Appen said the pandemic is accelerating growth in sectors from which it can take advantage. These include tech, eCommerce, pharmaceuticals, and logistics.
The company said AI, as well as the need for training data, will cement the advantages Appen has in these surging markets.
What’s next?
While companies across the ASX are opting out of giving guidance based on pandemic uncertainty, Appen has maintained its guidance in today’s report.
The company expected full-year EBITDA to fall between $125 million and $130 million.
Appen said it is in a robust financial position with $126 million cash on hand. The company will fork out a half-franked 4.5-cent dividend for the first half of the year.
However, it seems the market is caught up on the soft half-yearly profit this morning. In early trade, Appen shares are 12.83 per cent lower and worth $37.92 each.
