CALIAN TECHNOLOGIES $20.50 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613- 599-8600; www.calian.com; Shares outstanding: 7.7 million; Market cap: $157.9 million; Dividend yield: 5.5%) operates in two areas: the business and technology services division (which supplies 70% of Calian’s revenue) provides engineers, health care workers and other skilled professionals to clients on a contract basis. The systems engineering division (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems.
In the three months ended June 30, 2012, Calian’s revenue rose 1.4%, to $59.3 million from $58.5 million a year earlier. Earnings rose slightly, to $3.48 million, or $0.45 a share, from $3.45 million, or $0.45 a share.
Earlier this year, Calian bought Primacy Management Inc. of Burlington, Ontario, for $5.2 million. Since 2003, Primacy has been designing, building and managing in-store health clinics for Loblaw Companies (symbol L on Toronto). Primacy now operates 112 such clinics in Loblaw’s stores across Canada.
Primacy will add about $3 million a year to Calian’s revenue. The company also expects the acquisition to immediately increase its earnings.
At the same time, Calian’s business and technology services division continues to benefit from steady orders from various Canadian federal government departments (60% of revenue), including the Department of National Defence.
Calian holds cash of $29.7 million, or $3.86 a share, and has no debt. It has just raised its quarterly dividend by 7.7%, to $0.28 a share from $0.26. That gives the shares a high annualized yield of 5.5%.
Calian Technologies is still a buy.
