Hilan: 13.7% growth in revenues in the first quarter and amounted to NIS 482 million

Hilan, the information technology (IT) and software company in the fields of payroll and human resources report a 13.7% growth in revenues in the first quarter of the year, which amounted to NIS 482 million, compared with the corresponding quarter last year. Most of the additional revenue (NIS 43.6 million out of 58 million) was attributed to the core of the activity, and NIS 14.4 million came for the first time from the consolidation of the activities of the accountant, which was acquired for NIS 210 million in the last quarter of 2021.

However, one-time expenses increased (Marketing and sales, management and general, under one item in the secular reports) in such a way that operating profit grew less than revenues - by 12.7%.
Hilan's operating profit amounted to NIS 56 million, which is 1.7% of turnover compared to 11.8% last year. This deterioration offset an improvement in gross profit, which rose to 24.6% of turnover, compared with 23.5% a year earlier, and in the amount of NIS 118.6 million.
On the way to the bottom line, Hilan (+ 2.02% 18700) benefited from foreign exchange rate differences that increased financing income, as well as a decrease in financing expenses on revaluation of contingent consideration. Thus, the profit attributed to shareholders increased by 18.9% to NIS 41.8 million, which is 8.7 % Of revenue, compared to 8.3% in the corresponding period.
Segmented by operating segments, it was reported that the business solutions segment, the largest in the company (approximately 53% of revenues), grew by 5.1% to revenues of NIS 254 million. It was followed by payroll services, enterprise systems and human resources, which grew by 28.9%, the highest growth in this quarter. The segment includes accountant activity, which first appeared in the report, and revenues in it amounted to NIS 11.7 million. Hilan explains, among other things, that the decrease in the unemployment rate contributes to income from the sale of solutions in this activity. % To 32.9% of its revenues, but the merger reduced it even further, to 28.5%, due to a reduction in excess costs, as explained in the company's report. This reduction is made on a straight-line basis, while the calculator's revenues are seasonally affected, in such a way that revenues in the first and fourth quarters of each year are generally higher.
The computing infrastructure segment grew by 20.7% to revenues of NIS 55.7 million, which constitute 11.4% of the company's total revenues. The field of software product marketing grew by 2.1% and brought in NIS 62.2 million, a share of 12.8% of Hilan's turnover during the period.
Hilan recently raised NIS 69 million against the issuance of new shares. The controlling shareholder, Avi Baum, transferred NIS 19.7 million. In addition, the transaction of acquiring full ownership of the Israeli DXC Technology, for $ 65 million, was approved, the results of which will be included in the secular reports starting in the current, second quarter of the year.
As reported with the announcement of the deal, DXC brought in a total of NIS 236 million in 2020, a decrease from the previous level of NIS 242 million in 2019. In a conversation with TheMarker, Hilan's CEO, Avi Baum, says that the company is growing. In this model and converts existing customers from a license model to a subscriber.
In a presentation published by the company to investors, a "challenge in recruiting and retaining employees" was mentioned. The company's environment indicates that wages are constantly on the rise, market developments in recent weeks that have led technology companies to stop or slow recruitment and even lay off are not yet felt in the secular, and the situation is not such that employees cling to a chair, fear for their jobs
Hilan is currently traded at a value of about NIS 4.2 billion, after a decrease of 12.1% since the beginning of the year. On the other hand, in the past 12 months its share has risen about 17%.