Why the Empired (ASX:EPD) share price is surging 14% this morning

The Empired share price is soaring this morning after announcing record first half revenue guidance for FY21 and solid FY22 pipelines.
The post Why the Empired (ASX:EPD) share price is surging 14% this morning appeared first on Motley Fool Australia. –

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Shares in IT services provider, Empired Ltd (ASX: EPD), are soaring this morning after the company announced record first half revenue guidance for FY21 of between $87 million and $89 million. This is up from $84 million for the same period last year. At the time of writing, the Empired share price is up 14.06% to 73 cents following the the announcement which was made during the company’s annual general meeting (AGM).

What else is driving the Empired share price?

The Empired share price is rocketing higher after the company also advised it expects record earnings before interest, tax, depreciation, and ammortisation (EBITDA) of between $15.8 million and $16.5 million, compared to $7.8 million last year.

Empired says it expects to pay out an interim dividend in February 2021 in the range of 30% to 40% of earnings.

On its full year outlook, the company says it will continue to perform strongly for the rest of FY21, with no material adverse changes to trading conditions due to COVID-19.

FY22 growth will be underpinned by a full year contribution from Western Power managed services and asset refresh contracts, combined with additional forecast revenue from the recent Western Power systems integrator contract win.

Empired Managing Director, Russell Baskerville, said:

We have been delighted with the progress made in ramping up services relating to a number of key contract wins over the prior six months. In the face of challenging conditions our team has transitioned and commenced service delivery ahead of time and in line with anticipated financial performance.

Over the coming 12 months, the company will contest a number of multi-year strategic deals that, if successful, will provide a material uplift in earnings in FY22 and beyond.

What does Empired do?

Empired provides IT services ranging from business consulting to applications systems development and support. 

Only two weeks ago, the company won a master IT supply contract with Western Power to provide a range of systems integration services. This was the second contract awarded by Western Power, and followed the managed services and preferred infrastructure services contracts awarded to Empired in April 2020.

Empired also counts Aussie Home Loans as one of its clients. The company first listed on the ASX in 2007, and its biggest shareholder is Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

How did Empired perform in 2020

The Empired share price has been one the clear winners in 2020, gaining more than 108% year to date. The Empired share price began the year at 35 cents and, based on today’s price, now commands a market capitalisation of $102 million.

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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Empired (ASX:EPD) share price is surging 14% this morning appeared first on Motley Fool Australia.

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