Phoenix It Group EBITDA Margin surged on 16.9 pp from -4.5% to 12.3% in 2015 while Revenue decreased on 9.4%
08 Jun 2015 • About Phoenix It Group (
$PNX) • By InTwits
Phoenix It Group reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Phoenix It Group is a company in decline: FY2015 revenue growth was -9.4%, 5 years revenue CAGR was -3.0%
- EBITDA Margin is quite volatile: 12.3% in FY2015, -4.5% in FY2014, -15.6% in FY2013, 6.2% in FY2012, 17.0% in FY2011
- Phoenix It Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's a lot of higher than industry average of 2.3%.
- CAPEX is quite volatile: 6.5 in FY2015, 7.9 in FY2014, 9.8 in FY2013, 14 in FY2012, 16.5 in FY2011
- The company has business model with average profitability: ROIC is at 11.4%
- It operates with high leverage: Net Debt/EBITDA is 1.9x while industry average is -0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Phoenix It Group ($PNX) key annual financial indicators
| mln. £ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 271.6 | 260.8 | 250.0 | 233.4 | 211.5 | -9.4% |
| Gross Profit | 263.6 | 253.0 | 242.9 | 227.7 | 207.0 | -9.1% |
| EBITDA | 46.2 | 16.1 | -39.0 | -10.6 | 26.1 | -346.2% |
| Net Income | 18.7 | -3.6 | -59.6 | -30.3 | 7.0 | -123.1% |
Balance Sheet
|
|---|
| Cash | 15.8 | 15.2 | 16.0 | 28.8 | 21.4 | -25.7% |
| Short Term Debt | 4.9 | 3.0 | 1.8 | 0.7 | 0.3 | -57.1% |
| Long Term Debt | 73.3 | 81.0 | 85.5 | 84.2 | 70.1 | -16.7% |
Cash flow
|
|---|
| Capex | 16.5 | 14.0 | 9.8 | 7.9 | 6.5 | -17.7% |
Ratios
|
|---|
| Revenue growth | 10.5% | -4.0% | -4.1% | -6.6% | -9.4% | |
| EBITDA growth | -0.2% | -65.2% | -342.2% | -72.8% | -346.2% | |
| Gross Margin | 97.1% | 97.0% | 97.2% | 97.6% | 97.9% | 0.3% |
| EBITDA Margin | 17.0% | 6.2% | -15.6% | -4.5% | 12.3% | 16.9% |
| Net Income Margin | 6.9% | -1.4% | -23.8% | -13.0% | 3.3% | 16.3% |
| CAPEX, % of revenue | 6.1% | 5.4% | 3.9% | 3.4% | 3.1% | -0.3% |
| ROIC | 12.9% | -0.4% | -29.8% | -17.5% | 11.4% | 28.9% |
| ROE | 12.8% | -2.5% | -61.6% | -60.3% | 17.6% | 77.9% |
| Net Debt/EBITDA | 1.4x | 4.3x | | | 1.9x | 1.9x |
Revenue and profitability
The company's Revenue decreased on 9.4% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 16.9 pp from -4.5% to 12.3% in FY2015.
Gross Margin showed almost no change in FY2015.
Net Income marign surged on 16.3 pp from -13.0% to 3.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Phoenix It Group's CAPEX/Revenue was 3.1% in FY2015. Phoenix It Group's CAPEX/Revenue decreased on 2.3 pp from 5.4% in FY2012 to 3.1% in FY2015. For the last three years the average CAPEX/Revenue was 3.5%.
Return on investment
The company operates at good ROE (17.63%) while ROIC is low (11.40%). ROIC surged on 28.9 pp from -17.5% to 11.4% in FY2015. ROE surged on 77.9 pp from -60.3% to 17.6% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.9x and Debt / EBITDA is 2.7x. Net Debt / EBITDA surged1.9x from to 1.9x in FY2015. Debt dropped on 17.1% in FY2015 while cash dropped on 25.7% in FY2015.
Valuation
Phoenix It Group's trades at EV/EBITDA 6.9x and P/E 18.6x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 9.1x with the industry average at 4.7x.
Appendix 1: Peers in Software & Computer Services
Below you can find Phoenix It Group benchmarking vs. other companies in Software & Computer Services 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Coms ($COMS) | 8.4% | -68.6% | 46.8% | 763.3% | |
| Centralnic Group ($CNIC) | 36.3% | 15.9% | 4.0% | 98.9% | |
| Rapidcloud Intl ($RCI) | 34.2% | 16.4% | 20.9% | 57.1% | |
| Netdimensions(Hldgs)Ltd ($NETD) | 48.5% | 12.5% | 17.5% | 40.1% | |
| Wandisco ($WAND) | 30.0% | 55.5% | 32.8% | 40.0% | |
| |
|---|
| Median (38 companies) | 7.5% | 7.2% | 6.1% | 2.6% | 9.3% |
|---|
| Phoenix It Group ($PNX) | | -4.0% | -4.1% | -6.6% | -9.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lombard Risk Management ($LRM) | 99.3% | 99.0% | 98.8% | 99.2% | 98.6% |
| Netcall ($NET) | 86.9% | 88.2% | 89.7% | 91.0% | |
| Dotdigital Group ($DOTD) | 92.8% | 94.0% | 92.7% | 90.5% | |
| Idox ($IDOX) | 86.6% | 90.4% | 90.8% | 89.4% | |
| Eleco ($ELCO) | 70.3% | 86.8% | 86.6% | 87.8% | |
| |
|---|
| Median (34 companies) | 57.6% | 59.6% | 62.1% | 58.3% | 56.5% |
|---|
| Phoenix It Group ($PNX) | 97.1% | 97.0% | 97.2% | 97.6% | 97.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Eservglobal ($ESG) | 112.6% | -32.2% | -2.6% | 100.2% | |
| Mail.Ru Group Ltd ($61HE) | 39.9% | 43.1% | 47.4% | 50.5% | |
| Lombard Risk Management ($LRM) | 6.2% | 23.9% | 30.8% | 29.3% | 20.5% |
| Dotdigital Group ($DOTD) | 29.1% | 31.4% | 39.4% | 29.2% | |
| Rapidcloud Intl ($RCI) | 47.4% | 46.0% | 52.3% | 28.5% | |
| |
|---|
| Median (40 companies) | 14.1% | 14.5% | 13.0% | 12.0% | 11.9% |
|---|
| Phoenix It Group ($PNX) | 17.0% | 6.2% | -15.6% | -4.5% | 12.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rapidcloud Intl ($RCI) | 0.7% | 1.0% | 23.1% | 11.6% | |
| Anite ($AIE) | 3.0% | 4.0% | 3.9% | 5.8% | |
| Statpro Group ($SOG) | 3.1% | 2.0% | 2.9% | 5.8% | |
| Wandisco ($WAND) | 0.2% | 2.3% | 4.0% | 4.2% | |
| Unisys Corp ($USY) | 2.1% | 2.1% | 2.5% | 4.1% | |
| |
|---|
| Median (40 companies) | 1.4% | 1.5% | 1.6% | 1.9% | 1.1% |
|---|
| Phoenix It Group ($PNX) | 6.1% | 5.4% | 3.9% | 3.4% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Eservglobal ($ESG) | 50.0% | -24.8% | -13.0% | 67.9% | |
| Lombard Risk Management ($LRM) | 37.7% | 51.4% | 39.2% | 30.2% | 12.2% |
| Progility ($PGY) | 12.7% | 10.3% | 0.0% | 29.2% | |
| Dotdigital Group ($DOTD) | 36.6% | 26.4% | 38.0% | 28.5% | |
| International Bus Mach Corp ($IBM) | 36.2% | 36.1% | 31.0% | 28.1% | |
| |
|---|
| Median (40 companies) | 13.5% | 10.7% | 11.1% | 9.4% | 11.9% |
|---|
| Phoenix It Group ($PNX) | 12.9% | -0.4% | -29.8% | -17.5% | 11.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Parity Group ($PTY) | 6.9x | 4.7x | | 4.9x | |
| Escher Group Hldgs ($ESCH) | 2.1x | 0.3x | 0.4x | 2.4x | |
| Ubisense Group ($UBI) | -4.2x | -2.2x | -0.4x | 1.8x | |
| Progility ($PGY) | 1.0x | 2.0x | | 1.8x | |
| International Bus Mach Corp ($IBM) | 0.8x | 0.9x | 1.2x | 1.4x | |
| |
|---|
| Median (33 companies) | -0.7x | -0.7x | -0.5x | -0.3x | -0.0x |
|---|
