Coms EBITDA dropped on 73.2% in 2016 and EBITDA Margin decreased slightly on 0.92 pp from 1.1% to 0.22%
24 May 2016 • About Coms (
$COMS) • By InTwits
Coms reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Coms doesn't have a profitable business model yet: FY2016 ROIC is -6.5%
- Coms has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's a lot of higher than industry average of 2.0%.
- CAPEX is quite volatile: 0.056 in FY2016, 2.2 in FY2015, 0.47 in FY2014, 0.015 in FY2013, 0.0050 in FY2012
- The company has unprofitable business model: ROIC is at -6.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Coms ($COMS) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1.105 | 1.622 | 14.003 | 29.468 | 40.098 | 36.1% |
| Gross Profit | 0.600 | 0.930 | 4.755 | 5.158 | 6.950 | 34.7% |
| SG&A | | 1.864 | 3.930 | 5.897 | 5.662 | -4.0% |
| EBITDA | -0.459 | -0.839 | 1.313 | 0.336 | 0.090 | -73.2% |
| Net Income | -0.594 | -1.228 | 1.014 | -15.070 | -2.183 | -85.5% |
Balance Sheet
|
|---|
| Cash | 0.095 | 0.172 | 0.999 | 0.492 | 2.430 | 393.9% |
| Short Term Debt | 0.004 | 0.002 | 0.000 | 0.878 | 1.383 | 57.5% |
| Long Term Debt | 0.002 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.005 | 0.015 | 0.470 | 2.206 | 0.056 | -97.5% |
Ratios
|
|---|
| Revenue growth | -68.6% | 46.8% | 763.3% | 110.4% | 36.1% | |
| EBITDA growth | -16.8% | 82.6% | -256.5% | -74.4% | -73.2% | |
| Gross Margin | 54.3% | 57.3% | 34.0% | 17.5% | 17.3% | -0.2% |
| EBITDA Margin | -41.6% | -51.7% | 9.4% | 1.1% | 0.2% | -0.9% |
| Net Income Margin | -53.8% | -75.7% | 7.2% | -51.1% | -5.4% | 45.7% |
| SG&A, % of revenue | | 114.9% | 28.1% | 20.0% | 14.1% | -5.9% |
| CAPEX, % of revenue | 0.5% | 0.9% | 3.4% | 7.5% | 0.1% | -7.3% |
| ROIC | -19.8% | -40.7% | 12.0% | -6.6% | -6.5% | 0.1% |
| ROE | -22.3% | -53.5% | 11.2% | -120.7% | -24.4% | 96.3% |
| Net Debt/EBITDA | | | -0.8x | 1.1x | -11.6x | -12.8x |
Revenue and profitability
The company's Revenue surged on 36.1% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 17.2 pp from 6.2% to -10.9% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue decreased on 5.9 pp from 20.0% to 14.1% in FY2016.
Net Income marign jumped on 45.7 pp from -51.1% to -5.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Coms's CAPEX/Revenue was 0.14% in FY2016. The company's CAPEX/Revenue decreased slightly on 0.79 pp from 0.93% in FY2013 to 0.14% in FY2016. It's average CAPEX/Revenue for the last three years was 3.7%.The company invested a big chunk of EBITDA (62.2%) to CAPEX to secure its growth.
Return on investment
The company operates at negative ROIC (-6.45%) and ROE (-24.41%). ROIC showed almost no change in FY2016. ROE surged on 96.3 pp from -121% to -24.4% in FY2016.
Leverage (Debt)
Debt level is -11.6x Net Debt / EBITDA and 15.4x Debt / EBITDA. Net Debt / EBITDA dropped on 12.8x from 1.1x to -11.6x in FY2016. Debt jumped on 57.5% in FY2016 while cash surged on 394% in FY2016.
Appendix 1: Peers in Software & Computer Services
Below we provide Coms benchmarking against other companies in Software & Computer 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Proactis Holdings ($PHD) | 20.4% | 7.0% | 26.2% | 69.6% | |
| Progility ($PGY) | 4.6% | | | 51.0% | |
| Dotdigital Group ($DOTD) | 6.6% | 27.8% | 32.9% | 31.8% | |
| Accesso Technology Grp ($ACSO) | 16.8% | 28.2% | 27.3% | 24.1% | |
| Nasstar ($NASA) | 5.9% | | | 23.0% | |
| |
|---|
| Median (41 companies) | 7.6% | 5.7% | 4.4% | 3.1% | 0.2% |
|---|
| Coms ($COMS) | | 46.8% | 763.3% | 110.4% | 36.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lombard Risk Management ($LRM) | 99.0% | 98.8% | 99.2% | 98.6% | |
| Phoenix It Group ($PNX) | 97.0% | 97.2% | 97.6% | 97.9% | |
| Wandisco ($WAND) | 91.8% | 80.3% | 80.7% | 93.2% | |
| Netcall ($NET) | 88.2% | 89.7% | 91.0% | 90.9% | |
| Idox ($IDOX) | 90.4% | 90.8% | 89.4% | 89.3% | |
| |
|---|
| Median (34 companies) | 63.5% | 62.1% | 60.0% | 61.3% | 13.5% |
|---|
| Coms ($COMS) | 54.3% | 57.3% | 34.0% | 17.5% | 17.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mail.Ru Group Ltd ($61HE) | 43.1% | 47.4% | 50.5% | 34.6% | |
| Dotdigital Group ($DOTD) | 31.4% | 39.4% | 29.2% | 32.0% | |
| Idox ($IDOX) | 30.9% | 26.1% | 26.0% | 28.6% | |
| Oxford Metrics ($OMG) | 15.7% | 6.0% | 14.7% | 28.4% | |
| Microgen ($MCGN) | 31.5% | 32.8% | 24.5% | 26.8% | |
| |
|---|
| Median (41 companies) | 14.3% | 13.4% | 13.0% | 12.2% | 3.0% |
|---|
| Coms ($COMS) | -41.6% | -51.7% | 9.4% | 1.1% | 0.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Csf Group ($CSFG) | 1.5% | 4.0% | 2.4% | 7.1% | |
| Nasstar ($NASA) | 17.9% | | 2.1% | 5.2% | |
| Unisys Corp ($USY) | 2.1% | 2.5% | 4.1% | 5.0% | |
| International Bus Mach Corp ($IBM) | 3.9% | 3.7% | 4.0% | 4.4% | |
| Anite ($AIE) | 4.0% | 3.9% | 5.8% | 3.6% | |
| |
|---|
| Median (41 companies) | 1.5% | 1.6% | 1.9% | 1.3% | 0.5% |
|---|
| Coms ($COMS) | 0.5% | 0.9% | 3.4% | 7.5% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Triad Group ($TRD) | 4.1% | -3.8% | 24.5% | 61.5% | |
| Dotdigital Group ($DOTD) | 26.4% | 38.0% | 28.5% | 31.4% | |
| International Bus Mach Corp ($IBM) | 36.1% | 31.0% | 28.1% | 25.7% | |
| Instem ($INS) | 20.6% | 14.7% | 10.9% | 20.4% | |
| Kalibrate Technologies ($KLBT) | 12.5% | 40.2% | 29.2% | 18.8% | |
| |
|---|
| Median (41 companies) | 13.0% | 11.6% | 9.0% | 5.3% | 9.8% |
|---|
| Coms ($COMS) | -19.8% | -40.7% | 12.0% | -6.6% | -6.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Progility ($PGY) | 2.0x | | 1.8x | 12.8x | |
| Parity Group ($PTY) | 4.7x | | 4.9x | 5.1x | |
| Nasstar ($NASA) | -5.3x | | 0.0x | 1.9x | |
| Phoenix It Group ($PNX) | 4.3x | | | 1.9x | |
| International Bus Mach Corp ($IBM) | 0.9x | 1.2x | 1.4x | 1.7x | |
| |
|---|
| Median (31 companies) | -0.5x | -0.5x | -0.2x | -0.4x | 1.1x |
|---|
| Coms ($COMS) | | | -0.8x | 1.1x | -11.6x |
