Appen shares have plunged alongside local tech rivals and the wider ASX, despite the firm unveiling a “strong” FY19 result.
Tech stocks took a combined 3.5 per cent dive at the open as the wider market reeled amid a coronavirus-driven downturn for global equities.
Appen was among the hardest hit in early trade, its price down by 10.57 per cent, or $2.52, to $21.33 after 15 minutes, despite the company announcing it had grown revenue by 47.1 per cent to $536 million for the year to December 31
This result reflected the contribution from the Figure 8 business it bought in April.
The Sydney-based company, which develops human-annotated datasets for machine learning and artificial intelligence, said underlying net profit had beaten its previously upgraded guidance with a 32 per cent rise to $64.7 million.
Statutory net profit after tax dropped by 0.3 per cent, or $117,000, to $41.6 million, while statutory earnings rose 29 per cent to $87.9 million, reflecting the impact of the transaction costs relating to Figure 8. .
Te result was was driven by a “stand-out” 32 per cent increase in speech and image data types revenue to $67.7 million, the company said was achieved through growing demand” for “high-quality training data for a richer set of artificial applications”.
Appen’s relevance team also enjoyed a 37 per cent increase in revenue to $430 million.
Chief executive Mark Brayan told the ASX on Tuesday the company’s ability to maintain a “high level” of growth in revenue and translate it into improving margins and earnings growth, while investing in technology, was “testimony to the strength and durability” built into Appen.
Citadel Magnus said Appen had achieved a “solid” result and was generally in line to beat guidance.
The company said it expected a “negligible impact” from the coronavirus outbreak on FY20 group revenue and earnings, given its China operations were “young” and its targets were “modest”.
The company announced an interim dividend of five cents per share, partially franked, up from four cents per share the year before.