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Ienergizer Ltd reports 70.6% Net Income decline and 9.6% Revenue decline

02 Jul 2015 • About Ienergizer Ltd ($IBPO) • By InTwits

Ienergizer Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Ienergizer Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's in pair with industry average of 2.6%.
  • CAPEX is quite volatile: 4.1 in FY2015, 4.0 in FY2014, 2.4 in FY2013, 1.3 in FY2012, 0.52 in FY2011
  • The company has business model with average profitability: ROIC is at 10.4%
  • It operates with high leverage: Net Debt/EBITDA is 4.0x while industry average is 1.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Ienergizer Ltd ($IBPO) key annual financial indicators

mln. $201120122013201420152015/2014
P&L
Revenue49.371.7146.1153.7138.9-9.6%
Gross Profit23.740.3114.6118.0101.0-14.4%
EBITDA17.019.840.636.323.8-34.3%
Net Income15.716.023.419.15.6-70.6%
Balance Sheet
Cash12.211.520.912.513.47.5%
Short Term Debt0.1134.9133.015.613.9-10.7%
Long Term Debt0.11.00.8106.995.0-11.1%
Cash flow
Capex0.51.32.44.04.12.9%
Ratios
Revenue growth43.2%45.4%103.7%5.2%-9.6%
EBITDA growth25.3%16.5%104.7%-10.7%-34.3%
Gross Margin48.1%56.2%78.4%76.8%72.7%-4.1%
EBITDA Margin34.5%27.6%27.8%23.6%17.1%-6.4%
Net Income Margin31.9%22.3%16.0%12.4%4.0%-8.4%
CAPEX, % of revenue1.0%1.9%1.6%2.6%2.9%0.4%
ROIC145.9%20.6%20.9%17.9%10.4%-7.5%
ROE142.2%63.8%72.3%45.9%10.9%-35.0%
Net Debt/EBITDA-0.7x6.3x2.8x3.0x4.0x1.0x

Revenue and profitability


Ienergizer Ltd's Revenue decreased on 9.6% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.4 pp from 23.6% to 17.1% in FY2015.

Gross Margin decreased on 4.1 pp from 76.8% to 72.7% in FY2015.

Net Income marign decreased on 8.4 pp from 12.4% to 4.0% in FY2015.

Capital expenditures (CAPEX) and working capital investments


Ienergizer Ltd's CAPEX/Revenue was 2.9% in FY2015. Ienergizer Ltd showed small growth in CAPEX/Revenue of 1.1 pp from 1.9% in FY2012 to 2.9% in FY2015. It's average CAPEX/Revenue for the last three years was 2.4%.

Return on investment


The company operates at low ROIC (10.37%) and ROE (10.89%). ROIC decreased on 7.5 pp from 17.9% to 10.4% in FY2015. ROE dropped on 35.0 pp from 45.9% to 10.9% in FY2015.

Leverage (Debt)


Company's Net Debt / EBITDA is 4.0x and Debt / EBITDA is 4.6x. Net Debt / EBITDA jumped on 1.0x from 3.0x to 4.0x in FY2015. Debt dropped on 11.0% in FY2015 while cash increased on 7.5% in FY2015.

Valuation


The company's trades at EV/EBITDA 5.8x and P/E 7.5x while industy averages are 10.5x and 26.1x. Ienergizer Ltd's EV/(EBITDA-CAPEX) is 7.0x with the industry average at 4.7x.

Appendix 1: Peers in Support Services


Below you can find Ienergizer Ltd benchmarking vs. other companies in Support 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
Petards Group ($PEG)6.5%-25.7%-30.6%115.1%
Optimal Payments ($OPAY)107.9%39.9%41.5%44.0%
1Spatial ($SPA)98.7%131.4%42.7%13.5%
Inspired Energy ($INSE)32.9%83.8%44.8%42.2%
Interquest Group ($ITQ)7.8%-6.8%2.0%31.2%
 
Median (54 companies)9.0%6.6%5.6%4.7%0.1%
Ienergizer Ltd ($IBPO)45.4%103.7%5.2%-9.6%


Top companies by Gross margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Inspired Energy ($INSE)94.6%86.8%78.7%
Vianet Group ($VNET)53.1%53.3%51.3%58.8%69.2%
Prime People ($PRP)57.6%63.4%58.3%57.7%61.4%
Murgitroyd Group ($MUR)59.9%58.4%61.4%57.6%
Grafenia ($GRA)57.9%53.4%54.3%56.1%70.8%
 
Median (48 companies)28.0%27.5%27.5%29.1%36.5%
Ienergizer Ltd ($IBPO)48.1%56.2%78.4%76.8%72.7%


Top companies by EBITDA margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Northgate ($67GX)41.2%40.4%40.6%39.4%
21St Century Technology ($C21)11.4%13.4%-0.2%36.0%
Vp ($VP.)24.4%23.9%24.5%24.2%26.2%
Capital Drilling Ltd ($CAPD)26.3%24.1%15.7%21.7%
Optimal Payments ($OPAY)11.2%10.3%18.5%21.3%
 
Median (54 companies)6.6%6.8%6.4%6.8%10.8%
Ienergizer Ltd ($IBPO)34.5%27.6%27.8%23.6%17.1%


Top companies by CAPEX/Revenue, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Vp ($VP.)15.5%21.4%17.7%21.6%25.7%
Norish ($NSH)5.0%10.2%1.4%15.4%
Capital Drilling Ltd ($CAPD)20.5%18.9%4.9%13.9%
Falkland Islands Hldgs ($FKL)2.6%3.7%6.8%12.9%11.9%
Augean ($AUG)11.2%9.8%15.9%12.3%
 
Median (54 companies)0.9%1.0%1.0%1.0%1.4%
Ienergizer Ltd ($IBPO)1.0%1.9%1.6%2.6%2.9%


Top companies by ROIC, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
21St Century Technology ($C21)16.2%20.3%-2.9%45.6%
Petards Group ($PEG)25.6%35.5%-78.0%24.7%
Driver Group ($DRV)6.5%18.7%27.9%24.0%
Optimal Payments ($OPAY)-2.9%7.1%27.7%23.8%
Premier Farnell ($PFLA)33.2%21.0%23.2%18.5%
 
Median (54 companies)8.9%9.7%7.9%9.3%10.7%
Ienergizer Ltd ($IBPO)145.9%20.6%20.9%17.9%10.4%


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Inspired Energy ($INSE)-0.8x0.8x0.6x19.4x
Mitsubishi Corp ($MBC)7.2x9.9x15.9x14.3x12.5x
Nature Group ($NGR)-0.6x-0.5x-0.4x6.6x
Ceps ($CEPS)4.1x3.0x6.6x
Redhall Group ($RHL)22.8x5.8x6.6x
 
Median (52 companies)0.7x0.8x0.5x0.6x0.6x
Ienergizer Ltd ($IBPO)-0.7x6.3x2.8x3.0x4.0x


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