Diligent posts 14% annual profit decline as marketing, R&D spend rise
The company reported net profit after minorities of $US7.8 million, or 6c a share, in calendar 2015.
See also: Diligent's ebitda pulled below expectations due to 'unusual costs'
Diligent Corp [NZX: DIL], the governance software app developer under a takeover offer, posted a 14% decline in annual profit as it ramped up spending on marketing and research and development.
The New York-based, NZX-listed company reported net profit after minorities of $US7.8 million, or 6c a share, in calendar 2015, down from $US8.6 million, or 7c a year earlier, it said in a statement. Revenue climbed 20% to $US99.3 million as the company lifted net client agreements by 30% to 3900. The company also had 80 customers signed up to its D&O add-on product and has made its new Teams service available on a limited basis.
Diligent increased spending on sales and marketing 59% to $US22 million in the year while R&D costs climbed 36% to $US13.1 million.
Earnings before interest, tax, depreciation and amortisation fell 12% to $US15.8 million, missing Forsyth Barr analyst Blair Galpin's estimate for ebitda of US$US18.3 million on revenue of $US98.7 million. The ebitda figure includes stock-based compensation, which more than doubled in the year to $US7.8 million. On Diligent's preferred adjusted ebitda measure, earnings were flat at $US24.3 million.
The company is currently facing a takeover offer from US venture capital firm Insight Venture Partners, which is offering $US4.93 a share, a 31% premium to Diligent's trading price before the bid emerged. As a company incorporated in Delaware, the deal requires a simple majority of common shareholders and also needs 60% approval by preference shareholders and other regulatory approvals.
Diligent canned a planned analyst briefing on the earnings because of the takeover offer, which it expects to complete in the second quarter of this year.
The shares last traded at $7.08 on the NZX, a discount to the offer price, which at the current exchange rate equates to $7.43 a share.
(BusinessDesk)
Paul McBeth
Mon, 29 Feb 2016
Mon, 29 Feb 2016
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Diligent posts 14% annual profit decline as marketing, R&D spend rise
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