STW Communications Group Ltd – Boosting Cash Flow

Boosting cash flow: STW Communications Group Ltd (ASX: SGN) reported an underlying net revenue of $416 million in FY15, an increase of 2% from the previous year. Underlying net profit after tax stood at $39.6 million, in line with guidance, but decreased 13% against prior year. Operating cash flow stood at $47.0 million, up $14.1 million on prior period. For financial year 2015, there was a conversion of 104% of underlying statutory EBITDA into operating cash flow compared to 67% in 2014. At the year end, the group’s cash balance stood at $26.9 million compared to $19.9 million in previous year. Looking ahead, as a stand-alone business, in 2016, STW is expected to deliver mid-to-high single digit growth in underlying net profit after tax. However, the proposed merger between SGN and the Australian and New Zealand operations of major shareholder WPP is yet to reveal the growth prospects going forward. Accordingly we give a “Hold” recommendation at the current share price of $0.915 To read the complete report click here . To get your free report Click Here


 

 

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