Ausdoc Group Limited

Ausdoc - $1.21: Reported a net profit after tax in line with our expectations of $10.6m. While all business units contributed to profit growth, as expected the Freightways acquisition was the primary driver of sales and earnings growth. A fully franked final dividend of 7.5 cents was declared, pushing dividends for the year to 13.5 cents per share. The document exchange business and the information management business both reported strong increases in sales and earnings. Freightways also performed well despite the tough trading conditions in New Zealand and contributed close to $3 million to the bottom line. While the Freightways acquisition has pushed interest bearing debt to around $80 million the company's strong cash generating capability provides for an adequate level of interest cover. Further earnings growth is expected for the current year which, given time, should help the stock to outperform. Continue to Accumulate