Sangoma Technologies Corp reports 2,641% CAPEX growth and 18.0% Revenue growth
22.10.2015 • About Sangoma Technologies Corp (
$STC) • By InTwits
Sangoma Technologies Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts: The company has potentially unprofitable business model: ROIC is at 3.8%.
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sangoma Technologies Corp ($STC) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 11.862 | 13.763 | 12.950 | 13.829 | 16.318 | 18.0% |
| Gross Profit | 8.839 | 9.468 | | 9.255 | 10.967 | 18.5% |
| SG&A | | | | 5.776 | 6.867 | 18.9% |
| EBITDA | 2.460 | 1.163 | | 2.806 | 2.968 | 5.7% |
| Net Income | -3.759 | 0.415 | -4.330 | 0.737 | 0.253 | -65.7% |
Balance Sheet
|
|---|
| Cash | 8.784 | 5.017 | | 4.982 | 2.518 | -49.5% |
| Short Term Debt | 0.034 | 0.034 | | 0.000 | 1.341 | |
| Long Term Debt | 0.051 | 0.017 | | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.123 | 0.087 | | 0.091 | 2.483 | 2,641.4% |
Ratios
|
|---|
| Revenue growth | -5.2% | 16.0% | -5.9% | 6.8% | 18.0% | |
| EBITDA growth | -48.5% | -52.7% | | | 5.7% | |
| Gross Margin | 74.5% | 68.8% | | 66.9% | 67.2% | 0.3% |
| EBITDA Margin | 20.7% | 8.4% | 0.0% | 20.3% | 18.2% | -2.1% |
| Net Income Margin | -31.7% | 3.0% | -33.4% | 5.3% | 1.5% | -3.8% |
| SG&A, % of revenue | | | | 41.8% | 42.1% | 0.3% |
| CAPEX, % of revenue | 1.0% | 0.6% | | 0.7% | 15.2% | 14.6% |
| ROIC | 2.6% | 3.2% | | | 3.8% | 3.8% |
| ROE | -18.2% | 2.1% | | | 1.5% | 1.5% |
| Net Debt/EBITDA | -3.5x | -4.3x | | -1.8x | -0.4x | 1.4x |
Revenue and profitability
The company's Revenue jumped on 18.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.8 pp from -14.1% to -9.3% in 2015.
Gross Margin showed almost no change in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign decreased on 3.8 pp from 5.3% to 1.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 15.2%. The company showed fast CAPEX/Revenue growth of 14.6 pp from 0.63% in FY2012 to 15.2% in FY2015.To deliver this fast growth the company invested a large share of EBITDA (83.7%) to CAPEX.
Return on investment
The company operates at low ROIC (3.77%) and ROE (1.47%).
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and 0.5x Debt / EBITDA. Net Debt / EBITDA surged on 1.4x from -1.8x to -0.4x in FY2015. Debt jumped while cash dropped on 49.5% in FY2015.
Appendix 1: Peers in Communications
Below we provide Sangoma Technologies Corp benchmarking against other companies in Communications industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Telehop Communications Inc ($HOP) | -11.7% | -13.1% | -7.8% | 105.7% | |
| Wi2Wi Corp ($YTY) | | | 11.5% | 100.3% | |
| BSM Technologies Inc ($GPS) | | | 39.1% | 55.5% | |
| Plaintree Systems Inc ($NPT) | | 14.5% | 9.1% | 50.8% | -7.1% |
| Aimia Inc ($AIM) | 2.9% | 6.3% | -25.6% | 47.5% | |
| |
|---|
| Median (49 companies) | 6.8% | 2.5% | 2.1% | 1.9% | -0.4% |
|---|
| Sangoma Technologies Corp ($STC) | | 16.0% | -5.9% | 6.8% | 18.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanted Technologies Corp ($WAN) | 86.6% | 90.5% | 93.2% | 94.3% | 95.6% |
| CounterPath Corp ($CCV) | 74.1% | 80.0% | 85.1% | 80.9% | 81.5% |
| Mediagrif Interactive Technologies Inc ($MDF) | 78.2% | 79.8% | 79.8% | 78.8% | 80.1% |
| NeuLion Inc ($NLN) | 45.2% | 53.6% | 63.8% | 70.2% | |
| Advantex Marketing International Inc ($ADX) | | 69.4% | 67.2% | 61.7% | |
| |
|---|
| Median (40 companies) | 43.2% | 42.8% | 42.6% | 41.8% | 50.6% |
|---|
| Sangoma Technologies Corp ($STC) | 74.5% | 68.8% | | 66.9% | 67.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Manitoba Telecom Services Inc ($MBT) | 33.7% | 34.3% | 33.7% | 47.4% | |
| Cogeco Cable Inc ($CCA) | 45.8% | 46.0% | 44.9% | 43.8% | |
| Cogeco Inc ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | |
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% |
| BCE Inc ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | |
| |
|---|
| Median (49 companies) | 14.1% | 15.6% | 14.6% | 11.7% | 6.9% |
|---|
| Sangoma Technologies Corp ($STC) | 20.7% | 8.4% | | 20.3% | 18.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newfoundland Capital Corp Ltd ($NCC.B) | | 8.7% | 5.5% | 76.8% | |
| Axia NetMedia Corp ($AXX) | 10.7% | 30.8% | 27.2% | 27.0% | |
| UrtheCast Corp ($UR) | | | | 26.5% | |
| TeraGo Inc ($TGO) | 21.6% | 20.9% | 21.5% | 23.1% | |
| Manitoba Telecom Services Inc ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | |
| |
|---|
| Median (52 companies) | 4.3% | 2.3% | 3.2% | 2.3% | 2.2% |
|---|
| Sangoma Technologies Corp ($STC) | 1.0% | 0.6% | | 0.7% | 15.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi2Wi Corp ($YTY) | -28.5% | -166.9% | | 136.7% | |
| Tucows Inc ($TC) | 12.8% | 17.7% | 22.5% | 35.4% | |
| Asian Television Network International Ltd ($SAT) | 102.7% | 34.6% | 23.6% | 23.4% | |
| Points International Ltd ($PTS) | 20.7% | 14.9% | 15.0% | 21.2% | |
| NeuLion Inc ($NLN) | -62.1% | -55.8% | -10.3% | 18.5% | |
| |
|---|
| Median (53 companies) | 7.2% | 9.2% | 8.3% | 8.3% | -1.3% |
|---|
| Sangoma Technologies Corp ($STC) | 2.6% | 3.2% | | | 3.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Plaintree Systems Inc ($NPT) | 0.7x | | | 124.2x | 3.9x |
| Advantex Marketing International Inc ($ADX) | | 4.8x | 2.2x | 5.0x | |
| MDC Partners Inc ($MDZ.A) | 7.3x | 12.4x | 112.6x | 4.6x | |
| Quebecor Inc ($QBR.B) | 2.0x | 3.7x | 3.9x | 4.2x | |
| Postmedia Network Canada Corp ($PNC.B) | 2.9x | 3.3x | 3.4x | 4.2x | |
| |
|---|
| Median (41 companies) | 1.0x | 1.4x | 1.3x | 1.5x | 1.7x |
|---|
| Sangoma Technologies Corp ($STC) | -3.5x | -4.3x | | -1.8x | -0.4x |
