Why Hansen Technologies Dipped More than 15% Today

What happened to Hansen Technologies’ share price?

Hansen Technologies Ltd [ASX:HSN] is a global customer-care and billings provider. They generate revenues from energy, water, telcos and pay TV providers. Today, the stock dropped 18.47%, reaching a low of $3.31. Shares quickly pulled up, and are trading at around $3.70.

Why did Hansen’s share price drop?

This morning, Hansen released their first-half accounts for the 2017 financial year. Total revenues rose 17.52%, to $87.1 million. Net profit for the half-year also increased from $12.6 million to $13.5 million.

The company’s also on track to achieve their full-year guidance. So why did the stock dive?

The company acquired US business Solutions on 1 July 2016. The acquisition added to the group’s results for the half-year. But it also ended up dragging down Hansen’s average earnings margin.

But, even still, investors might have oversold Hansen on the news, which explains the quick recovery in trading today.

What happens to Hansen Technologies now?

Moving forward, Hansen stated that growth would come from increasing demand for pay TV and digitalisation of various services. They also referenced research and development as a way to ensure their solutions are the best.

So is Hansen a buy going forward?

Maybe not, but they’re not a sell, either.

The company has recently acquired another business alongside the aforementioned Solutions — DST Billing Solutions Ltd, which it bought in November 2016. Both businesses should continue to add to Hansen’s growth.

And, going forward, this might be the major method that management uses to fuel growth. It’s not necessarily bad to grow via takeovers. But shareholders need to be cautious of how Hansen funds further acquisitions.

Right now, Hansen has its debt under control. But it might be something you want to keep your eye on if you hold Hansen shares or are looking to jump in.


Härje Ronngard,

Junior Analyst, Money Morning  


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