Matrix: Profit for the quarter increased by 30% to 61 m – the capital market

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Matrix
+ 4%

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opening:7,755

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Reports its financial results for the fourth quarter of 2020 and for the entire year: Net profit rose to NIS 61 million, 29.2% higher than NIS 47.2 million in the corresponding quarter last year. The net profit margin was about 5.8% compared to about 5.2% in the corresponding quarter. Revenues in the quarter amounted to NIS 1.04 billion (for the first time, a threshold of NIS 1 billion was crossed in the quarter), a growth of 15.8% compared with NIS 904.9 million in the corresponding period.

Revenues this year amounted to NIS 3.85 billion, an increase of 7.2% compared to NIS 3.6 billion in 2019. Net profit in 2020 amounted to NIS 190.9 million, an increase of 14.3% compared to NIS 166.9 million in 2019. The net profit margin was about 5% compared to about 4.6% last year.

The company has a dividend distribution policy of up to 75% of net profit, and therefore announced that based on the results of 2020, it will distribute a dividend of NIS 39.5 million (64 agorot per share), after a distribution of NIS 124.8 million over the past year.

The company’s current backlog stands at NIS 4.6 billion (of which NIS 3.9 billion for 2021), Matrix’s highest figure. The entire year’s reports also state that cash flow from operating activities amounted to NIS 535.2 million, more than double last year. At the end of the period, the amount of cash in the Matrix fund was approximately NIS 644 million and the net debt-to-balance sheet ratio was approximately 7.5%, compared with approximately 13.9% last year.

The Matrix says that 76% of the increase in sales for the entire year is due to an organic increase in the company’s activity and about 24% from the first consolidation of acquired companies, including Gasttanertech and RightStar. However, the last two were acquired in the second half of 2020, and if the consolidation of their results contributed about a quarter of the increase in the entire year. Gasttrentech was acquired in the third quarter and RightStar in the fourth quarter, which means that each had a more significant impact on these quarters, at a rate higher than those 24% that contributed to annual growth.

It can also be argued that even those 76% attributed to organic growth come in part from the activities of previously acquired companies. That is, what in 2019 was defined as the consolidation of results of new activity, in 2020 was already perceived as organic growth. Makes sense overall, and is still a matter worth considering.

And back to the numbers: Gross profit in the fourth quarter amounted to NIS 162.1 million, compared to NIS 133.9 million in the fourth quarter of 2019, an increase of 21%. The gross profit margin is about 15.5% compared to about 14.8% in the corresponding quarter last year. For the entire year, gross profit amounted to NIS 563 million, compared to NIS 518 million in 2019, an increase of 8.7%.

As for operating profit, it grew by about 21.7% in the quarter and amounted to about NIS 82 million, compared with about NIS 67.4 million in the corresponding quarter last year (operating profitability rate of about 7.8% compared to about 7.4% in the corresponding period). For the entire year, the figure was about NIS 289.1 million, compared with about NIS 254.7 million in 2019, an increase of about 13.5% (operating profitability rate of about 7.5% compared to about 7.1% last year).

Matrix reports with the release of the reports that management is focused on continuing to increase annual return on revenue (ARR) which in 2020 accounted for 40% of revenue, based on cloud, cyber, data, artificial intelligence and digital transformation activities defined by Matrix as its growth engines. The company revolves around ERP, CRM and other financial systems.