Eye on Rtc Group as a growth stock
07 Mar 2016 • About Rtc Group (
$RTC) • By InTwits
Rtc Group is a fast-growing stock in Support Services industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Rtc Group showed fast growth in the last financial year. Rtc Group's revenue surged on 27.4% in FY2015. At the same time Rtc Group well managed its profitability and showed even faster growth in EBITDA of 30.1% for the same period.
In the last 3 years the company showed fast revenue growth of 14.7% from 2012 to 2015 annually. EBITDA surged on 32.2% from 2012 to 2015 annually.
Rtc Group ($RTC) financials for the last 5 years
| mln. £ | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 31 | 43 | 49 | 51 | 65 |
|---|
| Revenue growth, % | | 40.1% | 13.6% | 4.3% | 27.4% |
|---|
| Gross margin, % | 13.0% | 12.2% | 11.3% | 20.0% | 19.6% |
|---|
| SG&A, % | | | 9.53% | 17.8% | 17.4% |
|---|
| EBITDA | 0 | 1 | 1 | 1 | 2 |
|---|
| EBITDA growth, % | | 973.9% | 32.8% | 33.6% | 30.1% |
|---|
| EBITDA margin, % | 0.225% | 1.72% | 2.02% | 2.58% | 2.64% |
|---|
| Net Income | -1 | 1 | 1 | 1 | 1 |
|---|
| Net Income margin, % | -1.99% | 1.34% | 1.05% | 1.57% | 1.71% |
|---|
| |
| CAPEX | 0 | 0 | 0 | 0 | 0 |
|---|
| CAPEX/Revenue, % | 0.567% | 0.605% | 0.434% | 0.481% | 0.401% |
|---|
| Debt | 3 | 4 | 4 | 3 | 4 |
|---|
| Cash | 0 | 0 | 0 | 0 | 0 |
|---|
| Net Debt/EBITDA | 45.6x | 4.7x | 3.7x | 2.4x | 2.3x |
|---|
| |
| ROIC, % | -2.6% | 14.6% | 17.6% | 19.9% | 22.2% |
|---|
| ROE, % | -82.2% | 63.6% | 35.7% | 38.6% | 41.4% |
|---|
Profitability and return on investment
EBITDA margin hasn't changed. It stayed at 2.60% in FY2015. In the longer period the company showed fast EBITDA margin growth of 0.900 pp from 1.70% in 2012 to 2.60% in 2015.
Rtc Group shows attractive ROIC at 22.2% for the last 12 months which assumes stable development model. Three years ago it was lower at 14.6%. It's average ROIC for the last three years was 19.9%.
Rtc Group showed Net Income margin growth of 0.100 pp from 1.60% to 1.70% in 2015. In the longer period Rtc Group showed fast Net Income margin growth of 0.400 pp from 1.30% in 2012 to 1.70% in 2015.
Rtc Group operates at ROE of 41.4%. Average ROE for the last three years was 38.6%.
Capital expenditures (CAPEX)
In FY2015 Rtc Group had CAPEX/Revenue of 0.401%. CAPEX/Revenue dropped on 0.205 pp from 0.605% in 2012 to 0.401% in 2015. Average CAPEX/Revenue for the last three years was 0.439%.
Leverage (Debt)
Having such a fast growth profile Rtc Group keeps medium debt level at 2.3x Net Debt/EBITDA. In the last 3 years leverage dropped on 2.44x from 4.74x in 2012 to 2.30x in 2015.
Valuation vs. comparable companies
The company trades at 8.6x EV/EBITDA which is 37.9% lower than 13.9x Support Services industry avearge calculated based on 158 companies. At the end of trading day today Rtc Group traded at 9.8x P/E which is 38.4% lower than 15.9x Support Services peer group avearge calculated on the basis of 21 companies.
Peers in Support Services
Below we provide Rtc Group benchmarking against other companies in Support Services 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($ITQ) | 7.8% | -6.8% | 2.0% | 31.2% | |
| |
|---|
| Median (54 companies) | 8.4% | 6.6% | 5.6% | 4.8% | 6.6% |
|---|
| Rtc Group ($RTC) | | 40.1% | 13.6% | 4.3% | 27.4% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Inspired Energy ($INSE) | | 94.6% | 86.8% | 78.7% | |
| Ienergizer Ltd ($IBPO) | 48.1% | 56.2% | 78.4% | 76.8% | 72.7% |
| 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 ($MUR) | 59.9% | 58.4% | 61.4% | 57.6% | 55.4% |
| |
|---|
| Median (48 companies) | 29.0% | 28.8% | 28.6% | 29.8% | 28.2% |
|---|
| Rtc Group ($RTC) | 13.0% | 12.2% | 11.3% | 20.0% | 19.6% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Northgate ($67GX) | | 41.2% | 40.4% | 40.6% | 39.4% |
| 21St Century Technology ($C21) | 11.4% | 13.4% | -0.2% | 36.0% | |
| Vp ($VP.) | 24.4% | 23.9% | 24.5% | 24.2% | 26.2% |
| Ienergizer Ltd ($IBPO) | 34.5% | 27.6% | 27.8% | 23.6% | 17.1% |
| Capital Drilling Ltd ($CAPD) | 26.3% | 24.1% | 15.7% | 21.7% | |
| |
|---|
| Median (54 companies) | 7.6% | 6.8% | 6.5% | 6.9% | 8.0% |
|---|
| Rtc Group ($RTC) | 0.2% | 1.7% | 2.0% | 2.6% | 2.6% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($AUG) | 11.2% | 9.8% | 15.9% | 12.3% | |
| |
|---|
| Median (54 companies) | 0.9% | 1.1% | 1.1% | 1.1% | 1.1% |
|---|
| Rtc Group ($RTC) | 0.6% | 0.6% | 0.4% | 0.5% | 0.4% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($DRV) | 6.5% | 18.7% | 27.9% | 24.0% | 3.2% |
| Optimal Payments ($OPAY) | -2.9% | 7.1% | 27.7% | 23.8% | |
| Premier Farnell ($PFLA) | | 33.2% | 21.0% | 23.2% | 18.5% |
| |
|---|
| Median (54 companies) | 9.9% | 9.7% | 7.9% | 9.3% | 10.4% |
|---|
| Rtc Group ($RTC) | -2.6% | 14.6% | 17.6% | 19.9% | 22.2% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Inspired Energy ($INSE) | -0.8x | 0.8x | 0.6x | 19.4x | |
| Mitsubishi Corp ($MBC) | 7.2x | 9.9x | 15.9x | 14.3x | 12.5x |
| Nature Group ($NGR) | -0.6x | -0.5x | -0.4x | 6.6x | |
| Ceps ($CEPS) | 4.1x | | 3.0x | 6.6x | |
| Redhall Group ($RHL) | | 22.8x | 5.8x | 6.6x | 16.8x |
| |
|---|
| Median (52 companies) | 0.6x | 0.8x | 0.5x | 0.6x | 0.6x |
|---|
| Rtc Group ($RTC) | 45.6x | 4.7x | 3.7x | 2.4x | 2.3x |
