rhipe limited (ASX RHP) released a trading update today on its public cloud business.
The RHP share price rallied 4.15% to $2.385 today on the back of the update. The public cloud unit, a key driver of the company’s business, reported excellent growth in the number of seats.
About rhipe limited (ASX RHP)
rhipe is a cloud channel company. It provides licensing, business development and knowledge services that support services providers, system integrators and software vendors accelerate the adoption of the cloud by end customers.
It is the leading cloud software licensing expert in the Asia-Pacific region. It is focused on the adoption of the cloud through subscription software licensing models from international vendors that have increasingly become cloud-friendlier in recent times, e.g. Microsoft, VMware, Citrix, Veeam, Red Hat, and Trend Micro.
Cloud seats in strong growth momentum
The company’s significant investment over the last four years in the public cloud business is paying off.
Currently, rhipe boasts of over 530,000 Office365 seats, including 100,000 academic seats. However, the number of non-academic seats has grown by more than 170,000 seats since the beginning of the financial year.
rhipe receives Microsoft awards
rhipe Malaysia won the 2019 Microsoft Country Partner of the Year, an award it earlier won in 2017. The company also made it as a finalist for the 2019 Microsoft Global Indirect Partner of The Year award.
These awards recognize rhipe’s excellence in implementing Microsoft technology in the cloud.
Public cloud margins overtake those from private cloud
“The continued strong growth in Office365 supported seats and the two important industry awards provide recognition from Microsoft at both a local and global level and is a reflection of rhipe’s exceptional year of growth,” said Mr. Dominic O’Hanlon, CEO.
“We have over 530k CSP seats globally with margin contribution from our public cloud business now exceeding the margin contribution from our traditional Microsoft private cloud offerings, although we continue to see this grow steadily as well,” he added.
Business following up on strong H1 numbers
In February, rhipe reported solid numbers for the first half of 2019. Net profit after tax shot up 181% to $3 million based on over 30% growth in group revenue and gross profit. Group EBITDA jumped over 66% to $4.6 million.
Operating profit for the half-year soared 79% to $5.6 million.
Net profit for this half year equalled the net profit that the Company delivered in the previous full financial year. The company doubled its interim dividend.
Cash in hand grew to $23.2 million from $17.3 million as at end December 2017.
The company said it expected to deliver operating profit in the range $11.5 million to $12 million for the full year to June 30, 2019.
This dividend-paying company is on a strong growth and profit trajectory.
Interestingly, on the valuation front, it is superior to its sector peers on every count.
The RHP share price is currently hovering a shade below its 52-week high of $2.48.
Given the performance of the company and the cloud sector, the company’s future is looking positive.
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