hSenid reports solid 7-month earnings ahead of tomorrow’s IPO

hSenid Business Solutions Limited, releasing its financial results ahead of its initial public offering (IPO) tomorrow, reported robust top and bottom line performances, reflecting that the Sri Lankan human resources software solutions giant, with a global reach, has some sound business and financial fundamentals to become a solid IPO candidate with a significant upside. 

The company reported revenues of Rs.579.2 million for the seven months to October 31, 2021, up 44 percent from the same period last year. 

The company’s ‘PeoplesHR’ remains the key product generating the lion’s share of its revenues and its cloud solution and the on-premise solution contribute 39 percent and 29 percent, respectively to its consolidated revenues. 

The company reported earnings of Rs.119.5 million, with an earnings per share of 54 cents for the April-October period, compared to earnings of Rs.63.1 million or 29 cents a share in the comparable period last year, which translated into an 89 percent increase. 

The company on August 31 sub-divided its shares at a ratio of 110 shares for each share held, thereby elevating its total number of shares in issue to 221.36 million, from 2.01 million. 

The company has a fiscal year, which runs from April through March and the seven-month results are a precursor to its IPO, which opens on December 3. 

The company is selling 55.34 million shares or a 20 percent stake, at Rs.12.50 a share, to raise Rs.692 million, to advance its product and market development activities and to make acquisitions in the APAC and East African regions, where there is untapped growth potential. 

The company operates from six countries, serving more than 1,300 organisations in over 40 countries, with over million global users of its HR solutions. 

The IPO will make hSenid the first listed enterprise software firm on the Colombo Stock Exchange (CSE) and is expected to open up doors for several other IT sector companies to enter the Colombo bourse.   

IT and related companies became instant winners of the pandemic, as many human activities from working to education to shopping to entertainment shifted online and investors flocked to them, sending their valuations higher by many multiples. The meteoric rally in the United States’ tech-heavy Nasdaq Composite Index, comprising of technology companies, offers a proxy for the dominant role played by the technology and related companies in the pandemic world. 

Despite the not so favourable macro-economic conditions caused by the pandemic’s re-emergence from around April this year, the CSE has been a bright spot with an influx of new companies seeking listings and the indices are hitting fresh highs almost on a daily basis.

The companies are also being drawn into the bourse in droves to take advantage of the 50 percent corporate tax holiday offered for three years from the budget last year for those who seek listings prior to the end of this year. 
The bourse’s market capitalisation surpassed the Rs.5.0 trillion mark on Tuesday, closing the day at Rs.5.1 trillion, made possible by the local investors, as there was close to a record foreign outflow, which topped Rs.50 billion mark.