RXP Services (ASX:RXP) will acquire one of Australia's largest independent consultancies, MethodGroup Consulting, specialising in business performance improvement services for an undisclosed sum after signing a binding agreement.
While the consideration was not disclosed, based on RXP's success in recent acquisitions, this appears to be an interesting deal.
MethodGroup has a client base across Australia’s largest corporate entities in financial services, utilities and telecommunications sectors.
As an ICT consulting services comnpany, RXP has provided professional services to S&P / ASX 200 corporations and government bodies in Australia and Asia for over 20 years.
Results for RXP's year to June 30 2013 were within market guidance; revenue was $30 million and EBITDA was $4.9 million and the EBITDA margin climbed to 16.3%.
Cash flows from operations are increasing on the back of growth in underlying revenue. RXP had nil debt with $11.2 million in cash as at 30 June 2013 to fund further organic and acquisitions.
It has been a busy year acquiring PLC, STC, NSI Technology and Zenith Solutions during the period with Transpire being acquired after balance date.
RXP is pushing further into mobility and cloud services.
In 2014, based on forecast cash flow from operations, RXP will consider beginning paying a dividend in the first half of calendar 2014.
There looks to be further growth to come for RXP based on the integration of recent acquisitions; the hint of a dividend would drive the share price higher from the current $0.745.
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