- Software developer Altium (ALU) has reported strong growth in the first half of the 2020 financial year
- Revenue from China was up 27 per cent while overall revenue was up 19 per cent compared to the previous year
- Despite this news, Altium predicts end of year profits will be at the lower end of its forecast
- This is partially due its electronic-parts search engine, Octopart, not performing so well
- The low forecast is also due to the uncertainty of the coronavirus’ impact in the China market
- Altium is down 15.2 per cent, with shares currently trading at $36.14
Electronic software designer Altium (ALU) has reported strong growth in the first half-year report of FY2020 but there is still trouble ahead for the software giant.
On the positive side, net revenue was up 19 per cent to US$92.8 million (A$138.6 million) when compared to the first half of FY2019. Altium reported a 27 per cent growth in its Chinese market.
Due to this strong growth, the half year dividend was increased by 25 per cent to A$0.20.
The only Altium business not performing well is Octopart, a search engine that finds information about electron parts. While the site did generate a 2 per cent increase in revenue on the previous year, this fell short of the high targets the company has initially set.
Altium’s Chief Financial Officer Joe Bedewi attributed Octopart’s slow performance to a general dip in the electronics parts industry.
He also cited changes to the Google search algorithm, which hindered the site’s online visibility and therefore its performance. This issue has since been rectified.
Despite the large growth, the company states it is still likely to fall toward the lower end of its full-year revenue predictions. Octopart’s lagging performance is part of the reason for this lower forecast.
Potentially more detrimental however, are the negative effects of the coronavirus outbreak, which failed to impact this report significantly but is likely to adversely affect the company’s second half.
The full effect of the virus on Altium’s operations is still unknown though the company’s large base in China is likely to underperform as a result over the coming months.
Altium is down 15.2 per cent, with shares currently trading at $36.14 at 11:38 am AEDT