Timeless Software Ltd reports 33.9% EBITDA decline in 2016 and 18.1 pp EBITDA Margin decline from 46.1% to 28.0%
22/06/2016 • About Timeless Software Ltd (
$8028) • By InTwits
Timeless Software Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Timeless Software Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.3%. At the same time it's a lot of higher than industry average of 6.5%.
- CAPEX is quite volatile: 6.4 in FY2016, 7.8 in FY2015, 28.3 in FY2014, 17.2 in FY2013, 1.7 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Timeless Software Ltd ($8028) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 25.8 | 204.9 | 128.0 | 143.0 | 155.7 | 8.9% |
| Gross Profit | 4.6 | 99.5 | 37.7 | 60.2 | 62.1 | 3.1% |
| EBITDA | -29.2 | 50.7 | -17.6 | 66.0 | 43.6 | -33.9% |
| Net Income | -11.1 | -27.6 | -56.9 | -33.4 | -20.6 | |
Balance Sheet
|
|---|
| Cash | 63.0 | 55.2 | 33.7 | 51.0 | 101.8 | 99.5% |
| Short Term Debt | 0.0 | 11.3 | 33.3 | 20.4 | 19.5 | -4.5% |
| Long Term Debt | 0.0 | 49.8 | 39.9 | 29.9 | 19.9 | -33.3% |
Cash flow
|
|---|
| Capex | 1.7 | 17.2 | 28.3 | 7.8 | 6.4 | -18.0% |
Ratios
|
|---|
| Revenue growth | 2.8% | 694.5% | -37.5% | 11.7% | 8.9% | |
| EBITDA growth | 64.2% | -273.8% | -134.7% | -475.0% | -33.9% | |
| Gross Margin | 17.7% | 48.5% | 29.4% | 42.1% | 39.9% | -2.2% |
| EBITDA Margin | -113.1% | 24.7% | -13.7% | 46.1% | 28.0% | -18.1% |
| Net Income Margin | -42.9% | -13.5% | -44.5% | -23.4% | -13.2% | 10.1% |
| CAPEX, % of revenue | 6.4% | 8.4% | 22.1% | 5.5% | 4.1% | -1.3% |
| ROIC | -29.1% | 7.3% | -4.6% | 11.6% | 3.9% | -7.7% |
| ROE | -10.8% | -22.7% | -51.9% | -38.9% | -20.9% | 18.0% |
| Net Debt/EBITDA | | 0.1x | | -0.0x | -1.4x | -1.4x |
Revenue and profitability
Timeless Software Ltd's Revenue increased on 8.9%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 18.1 pp from 46.1% to 28.0% in FY2016.
Gross Margin decreased on 2.2 pp from 42.1% to 39.9% in FY2016.
Net Income marign jumped on 10.1 pp from -23.4% to -13.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Timeless Software Ltd had CAPEX/Revenue of 4.1%. The company showed decline in CAPEX/Revenue of 4.3 pp from 8.4% in FY2013 to 4.1% in FY2016. It's average CAPEX/Revenue for the last three years was 10.6%.
Return on investment
The company operates at low but positive ROIC (3.89%) and negative ROE (-20.87%). ROIC decreased on 7.7 pp from 11.6% to 3.9% in FY2016. ROE surged on 18.0 pp from -38.9% to -20.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.4x and Debt / EBITDA is 0.9x. Net Debt / EBITDA dropped on 1.4x from -0.012x to -1.4x in FY2016. Debt dropped on 21.6% while cash surged on 99.5%.
Appendix 1: Peers in Mining
Below you can find Timeless Software Ltd benchmarking vs. other companies in Mining industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 89.7% | -95.8% | 2,361.6% | |
| Real Gold Mining Ltd ($246) | -44.0% | -68.0% | -26.2% | 106.2% | |
| REX Global Entertainment Holdings Ltd ($164) | -12.3% | 81.6% | -15.5% | 96.4% | |
| Hengxing Gold Holding Co Ltd ($2303) | | | 3,467.3% | 78.0% | |
| Zijin Mining Group Co Ltd ($2899) | 21.6% | 2.5% | 18.1% | 26.9% | |
| |
|---|
| Median (47 companies) | 5.2% | -1.7% | -5.1% | -20.8% | -17.7% |
|---|
| Timeless Software Ltd ($8028) | | 694.5% | -37.5% | 11.7% | 8.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | 2.5% | 5.1% | 39.6% | 93.0% | |
| REX Global Entertainment Holdings Ltd ($164) | -15.8% | -7.8% | -0.8% | 88.6% | |
| China Billion Resources Ltd ($274) | 71.4% | 47.2% | 73.4% | 79.7% | |
| Sun International Resources Ltd ($8029) | 83.2% | 73.1% | 64.8% | 69.4% | 58.8% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 63.9% | 54.9% | 51.2% | 41.8% | |
| |
|---|
| Median (48 companies) | 14.4% | 13.8% | 15.4% | 12.7% | 58.8% |
|---|
| Timeless Software Ltd ($8028) | 17.7% | 48.5% | 29.4% | 42.1% | 39.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| G-Resources Group Ltd ($1051) | | 54.5% | 53.4% | 58.3% | |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 70.0% | 64.6% | 59.6% | 51.3% | |
| Hengxing Gold Holding Co Ltd ($2303) | | -766.2% | 24.5% | 43.9% | |
| Sino Prosper Group Holdings Ltd ($766) | -138.6% | -138.2% | -378.4% | 42.9% | |
| Chinalco Mining Corp International ($3668) | | | | 37.8% | |
| |
|---|
| Median (48 companies) | 5.3% | 7.8% | 6.3% | 4.4% | -37.0% |
|---|
| Timeless Software Ltd ($8028) | -113.1% | 24.7% | -13.7% | 46.1% | 28.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mongolia Energy Corp Ltd ($276) | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% | |
| Kaz Minerals ($847) | 36.6% | 136.5% | 168.8% | 168.7% | |
| Chinalco Mining Corp International ($3668) | | | | 115.6% | |
| China Dynamics Holdings Ltd ($476) | 1.8% | 0.0% | 1.0% | 113.8% | |
| MMG Ltd ($1208) | 25.7% | 22.6% | 41.9% | 100.4% | |
| |
|---|
| Median (48 companies) | 17.7% | 17.9% | 15.8% | 12.5% | 13.5% |
|---|
| Timeless Software Ltd ($8028) | 6.4% | 8.4% | 22.1% | 5.5% | 4.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CGN Mining Co Ltd ($1164) | 2.6% | 3.3% | 7.9% | 16.7% | |
| United Co RUSAL PLC ($486) | 0.3% | -9.0% | 6.3% | 12.3% | |
| Xingfa Aluminium Holdings Ltd ($98) | 7.6% | 8.8% | 11.7% | 11.8% | |
| China Hongqiao Group Ltd ($1378) | 24.8% | 17.0% | 14.1% | 10.6% | |
| Hengxing Gold Holding Co Ltd ($2303) | -7.2% | -8.1% | 0.0% | 8.6% | |
| |
|---|
| Median (49 companies) | 1.9% | 2.3% | 1.5% | -1.1% | -10.0% |
|---|
| Timeless Software Ltd ($8028) | -29.1% | 7.3% | -4.6% | 11.6% | 3.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 9.2x | 9.7x | 9.2x | 31.5x | |
| Chinalco Mining Corp International ($3668) | | | | 25.0x | |
| MMG Ltd ($1208) | 2.1x | 2.0x | 10.2x | 20.2x | |
| Kaz Minerals ($847) | 2.4x | 2.9x | 5.5x | 18.7x | |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 1.5x | 4.1x | 6.4x | 13.5x | |
| |
|---|
| Median (28 companies) | 2.0x | 1.9x | 4.5x | 3.8x | |
|---|
| Timeless Software Ltd ($8028) | | 0.1x | | -0.0x | -1.4x |
