Shares in Avast (AVST) – which floated in May 2018 – hit an all-time high on release of its half-year numbers. Key to the cyber security group’s performance was its core consumer direct desktop business. Here, adjusted revenues rose by 9.5 per cent to $308m (£255m) – underpinned by the cross-selling of privacy products and performance products.
Overall, adjusted revenues increased by 5.8 per cent, reaching $427m. Avast notes that the difference between its statutory and adjusted top line is “diminishing”, as the effects of non-cash historical adjustments stemming from the acquisition of AVG Technologies in 2016 decreases.
Encouragingly, Avast has raised its full-year expectations for desktop from high single-digit to low double-digit revenue growth. In turn, management thinks that group like-for-like revenue growth will land at the upper end of its previously cited high single-digit percentage range.
True, the smaller consumer direct mobile business endured an 8 per cent contraction in adjusted revenues to $38.3m. Performance here was tempered by the ongoing impact of the loss of Avast’s contract with carrier Sprint in 2017. But the group has also enjoyed growth in multi-device licences, which – despite spanning desktop and mobile – are predominantly accounted for within the former segment.
Broker Morgan Stanley expects adjusted EPS of 30¢ in 2019, up slightly from 28¢ in 2018.
AVAST (AVST) | ||||
ORD PRICE: | 356p | MARKET VALUE: | £3.48bn | |
TOUCH: | 355-357p | 12-MONTH HIGH: | 360p | LOW: 225p |
DIVIDEND YIELD: | 3.0% | PE RATIO: | 22 | |
NET ASSET VALUE: | 98¢ | NET DEBT: | 114% |
Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
2018** | 389 | 75.4 | 18.0 | 0.0 |
2019 | 425 | 144 | 12.0 | 4.4 |
% change | +9 | +91 | -33 | - |
Ex-div: | 12 Sep | |||
Payment: | 11 Oct | |||
*Includes intangible assets of $2.2bn, or 227¢ a share **Avast floated in May 2018 £1 = $1.21 |