Optimal Payments reports 87.2% Net Income decline while 68.1% Revenue growth
16 Mar 2016 • About Optimal Payments (
$OPAY) • By InTwits
Optimal Payments reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 22.6% in 2015 vs. 21.3% in 2014 vs. 11.2% in 2011
- EBITDA Margin is quite volatile: 22.6% in 2015, 21.3% in 2014, 18.5% in 2013, 10.3% in 2012, 11.2% in 2011
- Optimal Payments has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.3%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: 5.7 in 2015, 3.3 in 2014, 13.6 in 2013, 6.5 in 2012, 39.6 in 2011
- The company has business model with low profitability: ROIC is at 8.8%
- It operates with high leverage: Net Debt/EBITDA is 2.8x while industry average is 1.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Optimal Payments ($OPAY) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 128.0 | 179.1 | 253.4 | 365.0 | 613.4 | 68.1% |
| Gross Profit | 74.1 | 89.6 | 131.9 | 177.7 | 296.5 | 66.9% |
| SG&A | | | 8.0 | 45.1 | 68.2 | 51.4% |
| EBITDA | 14.3 | 18.5 | 46.8 | 77.9 | 138.5 | 77.9% |
| Net Income | -26.2 | 1.2 | 31.5 | 57.7 | 7.4 | -87.2% |
Balance Sheet
|
|---|
| Cash | 58.0 | 82.2 | 164.4 | 118.7 | 132.3 | 11.5% |
| Short Term Debt | 0.3 | 0.2 | 10.1 | 20.6 | 30.9 | 50.2% |
| Long Term Debt | 8.4 | 9.4 | 0.8 | 107.2 | 493.3 | 360.2% |
Cash flow
|
|---|
| Capex | 39.6 | 6.5 | 13.6 | 3.3 | 5.7 | 74.8% |
Ratios
|
|---|
| Revenue growth | 107.9% | 39.9% | 41.5% | 44.0% | 68.1% | |
| EBITDA growth | 40.5% | 29.5% | 152.8% | 66.4% | 77.9% | |
| Gross Margin | 57.9% | 50.1% | 52.1% | 48.7% | 48.3% | -0.3% |
| EBITDA Margin | 11.2% | 10.3% | 18.5% | 21.3% | 22.6% | 1.2% |
| Net Income Margin | -20.5% | 0.7% | 12.4% | 15.8% | 1.2% | -14.6% |
| SG&A, % of revenue | | | 3.1% | 12.4% | 11.1% | -1.2% |
| CAPEX, % of revenue | 30.9% | 3.6% | 5.4% | 0.9% | 0.9% | 0.0% |
| ROIC | -2.9% | 7.1% | 27.7% | 23.8% | 8.8% | -15.0% |
| ROE | -32.5% | 1.5% | 29.1% | 33.9% | 1.2% | -32.8% |
| Net Debt/EBITDA | -3.4x | -3.9x | -3.3x | 0.1x | 2.8x | 2.7x |
Revenue and profitability
Optimal Payments's Revenue jumped on 68.1% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.2 pp from 21.3% to 22.6% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue decreased slightly on 1.2 pp from 12.4% to 11.1% in 2015.
Net Income marign dropped on 14.6 pp from 15.8% to 1.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Optimal Payments had CAPEX/Revenue of 0.93%. CAPEX/Revenue decreased on 2.7 pp from 3.6% in 2012 to 0.93% in 2015. It's average level of CAPEX/Revenue for the last three years was 2.4%.
Return on investment
The company operates at low ROIC (8.82%) and ROE (1.15%). ROIC dropped on 15.0 pp from 23.8% to 8.8% in 2015. ROE dropped on 32.8 pp from 33.9% to 1.2% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.8x and Debt / EBITDA is 3.8x. Net Debt / EBITDA jumped on 2.7x from 0.1x to 2.8x in 2015. Debt jumped on 310% in 2015 while cash surged on 11.5% in 2015.
Valuation
The company's trades at EV/EBITDA 3.0x and P/E 3.9x while industy averages are 10.5x and 26.1x. Optimal Payments's EV/(EBITDA-CAPEX) is 3.2x with the industry average at 4.7x.
Appendix 1: Peers in Support Services
Below you can find Optimal Payments 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 ($PEG) | | -25.7% | -30.6% | 115.1% | -2.9% |
| 1Spatial ($SPA) | | 98.7% | 131.4% | 42.7% | 13.5% |
| Inspired Energy ($INSE) | 32.9% | 83.8% | 44.8% | 42.2% | |
| Interquest Group ($ITQ) | | -6.8% | 2.0% | 31.2% | 5.3% |
| Universe Group ($UNG) | -7.4% | 13.3% | 33.9% | 30.7% | |
| |
|---|
| Median (54 companies) | 9.8% | 6.6% | 5.6% | 4.7% | 6.3% |
|---|
| Optimal Payments ($OPAY) | | 39.9% | 41.5% | 44.0% | 68.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 ($MUR) | 59.9% | 58.4% | 61.4% | 57.6% | 55.4% |
| |
|---|
| Median (48 companies) | 28.0% | 27.5% | 27.5% | 29.1% | 28.2% |
|---|
| Optimal Payments ($OPAY) | 57.9% | 50.1% | 52.1% | 48.7% | 48.3% |
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 ($VP.) | 24.4% | 23.9% | 24.5% | 24.2% | 26.2% |
| Ienergizer Ltd ($IBPO) | 34.5% | 27.6% | 27.8% | 23.6% | 17.1% |
| Capital Drilling Ltd ($CAPD) | 26.3% | 24.1% | 15.7% | 21.7% | |
| |
|---|
| Median (54 companies) | 6.6% | 6.8% | 6.4% | 6.8% | 7.7% |
|---|
| Optimal Payments ($OPAY) | 11.2% | 10.3% | 18.5% | 21.3% | 22.6% |
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 ($AUG) | 11.2% | 9.8% | 15.9% | 12.3% | |
| |
|---|
| Median (54 companies) | 0.9% | 1.0% | 1.0% | 1.1% | 1.1% |
|---|
| Optimal Payments ($OPAY) | 30.9% | 3.6% | 5.4% | 0.9% | 0.9% |
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% | 23.9% |
| Driver Group ($DRV) | 6.5% | 18.7% | 27.9% | 24.0% | 3.2% |
| Premier Farnell ($PFLA) | | 33.2% | 21.0% | 23.2% | 18.5% |
| Cpl Resources ($CPS) | 11.0% | 16.3% | 20.0% | 21.0% | 18.1% |
| |
|---|
| Median (54 companies) | 9.9% | 10.1% | 7.9% | 9.3% | 10.7% |
|---|
| Optimal Payments ($OPAY) | -2.9% | 7.1% | 27.7% | 23.8% | 8.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 ($RHL) | | 22.8x | 5.8x | 6.6x | 16.8x |
| |
|---|
| Median (52 companies) | 0.7x | 0.8x | 0.7x | 0.9x | 0.8x |
|---|
| Optimal Payments ($OPAY) | -3.4x | -3.9x | -3.3x | 0.1x | 2.8x |
