Enghouse Systems Ltd revenue growth accelerated to 27.0% in FY2015 vs. 22.3% a year earliner
16.12.2015 • About Enghouse Systems Ltd (
$ESL) • By InTwits
Enghouse Systems Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Enghouse Systems Ltd is a fast growth stock: FY2015 revenue growth was 27.0%, 5 year revenue CAGR was 24.3% at FY2015 ROIC 15.0%
- Enghouse Systems Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has highly profitable business model: ROIC is at 15.0%
- It operates with high leverage: Net Debt/EBITDA is -1.5x while industry average is -1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Enghouse Systems Ltd ($ESL) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 122.6 | 136.4 | 179.9 | 220.0 | 279.3 | 27.0% |
| Gross Profit | 88.8 | 99.7 | 128.8 | 154.7 | 190.6 | 23.2% |
| SG&A | 40.9 | 43.1 | 53.4 | 61.0 | 77.6 | 27.3% |
| EBITDA | 30.4 | 34.6 | 42.4 | 54.4 | 61.2 | 12.5% |
| Net Income | 23.1 | 20.9 | 24.3 | 29.7 | 31.4 | 5.9% |
Balance Sheet
|
|---|
| Cash | 65.6 | 59.5 | 70.1 | 72.8 | 94.1 | 29.3% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.9 | 2.3 | 1.4 | 1.3 | 2.9 | 119.2% |
Ratios
|
|---|
| Revenue growth | 30.1% | 11.3% | 31.9% | 22.3% | 27.0% | |
| EBITDA growth | 43.0% | 13.7% | 22.7% | 28.1% | 12.5% | |
| Gross Margin | 72.4% | 73.1% | 71.6% | 70.3% | 68.2% | -2.1% |
| EBITDA Margin | 24.8% | 25.4% | 23.6% | 24.7% | 21.9% | -2.8% |
| Net Income Margin | 18.8% | 15.3% | 13.5% | 13.5% | 11.3% | -2.2% |
| SG&A, % of revenue | 33.3% | 31.6% | 29.7% | 27.7% | 27.8% | 0.1% |
| CAPEX, % of revenue | 0.8% | 1.7% | 0.8% | 0.6% | 1.0% | 0.4% |
| ROIC | 13.9% | 14.5% | 14.3% | 16.8% | 15.0% | -1.9% |
| ROE | 17.7% | 14.0% | 14.3% | 15.2% | 13.9% | -1.3% |
| Net Debt/EBITDA | -2.2x | -1.7x | -1.7x | -1.3x | -1.5x | -0.2x |
Revenue and profitability
Enghouse Systems Ltd's Revenue jumped on 27.0% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.0 pp from 12.9% to 16.0% in 2015.
Gross Margin decreased on 2.1 pp from 70.3% to 68.2% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign decreased on 2.2 pp from 13.5% to 11.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Enghouse Systems Ltd had CAPEX/Revenue of 1.0%. Enghouse Systems Ltd's CAPEX/Revenue decreased slightly on 0.64 pp from 1.7% in FY2012 to 1.0% in FY2015. It's average level of CAPEX/Revenue for the last three years was 0.81%.
Return on investment
The company operates at good ROIC (14.97%) and ROE (13.92%). ROIC decreased slightly on 1.9 pp from 16.8% to 15.0% in FY2015. ROE decreased slightly on 1.3 pp from 15.2% to 13.9% in FY2015.
Leverage (Debt)
The company has no debt. Cash surged on 29.3% in FY2015.
Management team
Enghouse Systems Ltd's CEO is Stephen J Sadler. Stephen J Sadler is a founder and has 18 years tenure at the company.
Appendix 1: Peers in Technology
Below we provide Enghouse Systems Ltd benchmarking against other companies in Technology 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 |
|---|
| Mitel Networks Corp ($MNW) | -9.0% | 3.8% | -5.7% | 91.4% | |
| Redknee Solutions Inc ($RKN) | | -4.5% | 151.6% | 81.4% | -13.6% |
| Intrinsyc Technologies Corp ($ITC) | -19.0% | -26.8% | -21.7% | 70.8% | |
| Espial Group Inc ($ESP) | 10.2% | -9.5% | -5.5% | 59.4% | |
| iLOOKABOUT Corp ($ILA) | -7.6% | 19.6% | 8.9% | 58.8% | |
| |
|---|
| Median (33 companies) | 1.5% | 3.7% | 11.4% | 13.7% | 4.0% |
|---|
| Enghouse Systems Ltd ($ESL) | | 11.3% | 31.9% | 22.3% | 27.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ProntoForms Corp ($PFM) | 90.1% | 96.1% | 98.1% | 98.0% | |
| Constellation Software Inc/Canada ($CSU) | 85.5% | 86.2% | 85.5% | 86.1% | |
| Symbility Solutions Inc ($SY) | 82.1% | 80.6% | 79.9% | 81.0% | |
| Espial Group Inc ($ESP) | 77.9% | 77.5% | 81.7% | 78.5% | |
| Absolute Software Corp ($ABT) | 71.6% | 73.6% | 76.3% | 78.4% | 81.1% |
| |
|---|
| Median (31 companies) | 49.7% | 52.4% | 48.8% | 51.1% | 48.1% |
|---|
| Enghouse Systems Ltd ($ESL) | 72.4% | 73.1% | 71.6% | 70.3% | 68.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi-LAN Inc ($WIN) | 26.5% | 40.9% | 12.2% | 56.2% | |
| Computer Modelling Group Ltd ($CMG) | 51.5% | 53.8% | 52.2% | 51.5% | 50.8% |
| Open Text Corp ($OTC) | 27.1% | 26.5% | 29.1% | 30.0% | 31.8% |
| Sandvine Corp ($SVC) | 5.1% | 0.9% | 24.0% | 28.2% | |
| Descartes Systems Group Inc/The ($DSG) | 21.8% | 26.0% | 27.0% | 23.8% | 27.9% |
| |
|---|
| Median (33 companies) | 8.5% | 8.3% | 5.5% | 7.0% | 17.1% |
|---|
| Enghouse Systems Ltd ($ESL) | 24.8% | 25.4% | 23.6% | 24.7% | 21.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Halogen Software Inc ($HGN) | | 4.9% | 9.0% | 8.4% | |
| Intermap Technologies Corp ($IMP) | 0.4% | 1.0% | 3.2% | 7.4% | |
| Kinaxis Inc ($KXS) | 2.2% | 2.9% | 2.3% | 5.0% | |
| BlackBerry Ltd ($BB) | 5.2% | 4.9% | 3.8% | 4.2% | 2.6% |
| ProntoForms Corp ($PFM) | 1.3% | 1.1% | 0.8% | 3.6% | |
| |
|---|
| Median (33 companies) | 1.3% | 1.5% | 1.5% | 1.3% | 1.6% |
|---|
| Enghouse Systems Ltd ($ESL) | 0.8% | 1.7% | 0.8% | 0.6% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kinaxis Inc ($KXS) | | | 61.8% | 63.6% | |
| Computer Modelling Group Ltd ($CMG) | 75.5% | 74.2% | 68.6% | 62.9% | 63.5% |
| SMART Technologies Inc ($SMA) | 43.2% | 21.4% | -18.9% | 28.1% | 43.8% |
| Constellation Software Inc/Canada ($CSU) | 45.8% | 45.9% | 22.4% | 24.7% | |
| Sandvine Corp ($SVC) | -1.7% | -4.9% | 16.9% | 20.2% | |
| |
|---|
| Median (33 companies) | 4.7% | 2.9% | -4.8% | 0.5% | 7.9% |
|---|
| Enghouse Systems Ltd ($ESL) | 13.9% | 14.5% | 14.3% | 16.8% | 15.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Data Group Ltd ($DGI) | 3.2x | 3.5x | 3.7x | 4.0x | |
| Critical Control Energy Services Corp ($CCZ) | 1.9x | | 1.4x | 2.7x | |
| Mitel Networks Corp ($MNW) | 4.9x | 3.7x | 3.8x | 2.6x | |
| Open Text Corp ($OTC) | 0.0x | 0.1x | 0.2x | 1.8x | 1.5x |
| CGI Group Inc ($GIB.A) | 1.3x | 6.0x | 2.4x | 1.3x | 1.0x |
| |
|---|
| Median (21 companies) | -0.3x | -0.2x | -0.2x | -1.3x | 0.5x |
|---|
| Enghouse Systems Ltd ($ESL) | -2.2x | -1.7x | -1.7x | -1.3x | -1.5x |
