Is Centralnic Group a solid growth stock? - The numbers tells it is
01 Jun 2016 • About Centralnic Group (
$CNIC) • By InTwits
Have you thought about Centralnic Group as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Centralnic Group showed growth in the last financial year. The company's revenue surged on 71.3% in FY2015. In addition to revenue Centralnic Group also keeps delivering EBITDA growth. It was 95.6% in FY2015
If we look for the longer period the company showed fast revenue growth of 52.5% from 2012 to 2015 annually. EBITDA surged on 37.3% from 2012 to 2015 annually.
Centralnic Group ($CNIC) financials for the last 5 years
| mln. £ | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 3 | 3 | 3 | 6 | 10 |
|---|
| Revenue growth, % | | 15.9% | 4.0% | 98.9% | 71.3% |
|---|
| Gross margin, % | 61.0% | 73.4% | 76.6% | 58.9% | 46.8% |
|---|
| SG&A, % | | 44.9% | 51.7% | 47.0% | 29.7% |
|---|
| EBITDA | 1 | 1 | 1 | 2 | 3 |
|---|
| EBITDA growth, % | | 36.1% | -16.3% | 58.3% | 95.6% |
|---|
| EBITDA margin, % | 32.9% | 38.7% | 31.1% | 24.8% | 28.3% |
|---|
| Net Income | 0 | 1 | 1 | 0 | 1 |
|---|
| Net Income margin, % | 15.9% | 20.2% | 17.4% | 6.00% | 8.72% |
|---|
| |
| CAPEX | 0 | 0 | 0 | 0 | 0 |
|---|
| CAPEX/Revenue, % | 0.514% | 0.682% | 1.64% | 2.08% | 0.414% |
|---|
| Debt | 0 | 0 | 0 | 0 | 0 |
|---|
| Cash | 0 | 0 | 5 | 3 | 19 |
|---|
| Net Debt/EBITDA | -0.0x | -0.1x | -5.2x | -2.0x | -6.5x |
|---|
| |
| ROIC, % | 121.9% | 127.8% | 24.5% | 16.4% | 17.1% |
|---|
| ROE, % | 107.1% | 102.7% | 19.3% | 6.2% | 6.7% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. EBITDA margin surged on 3.50 pp from 24.8% to 28.3% in 2015. In the last 3 years Centralnic Group's EBITDA margin dropped on 10.4 pp from 38.7% in 2012 to 28.3% in 2015.
Centralnic Group shows attractive ROIC at 17.1% for the last 12 months which assumes stable development model. Three years ago it was considerably higher at 128%. For the last three years the average ROIC was 19.3%.
The company showed fast Net Income margin growth of 2.70 pp from 6% to 8.70% in 2015. In the last 3 years Net Income margin dropped on 11.5 pp from 20.2% in 2012 to 8.70% in 2015.
Centralnic Group operates at ROE of 6.72%. For the last three years the average ROE was 10.8%.
Capital expenditures (CAPEX)
In FY2015 Centralnic Group had CAPEX/Revenue of 0.414%. Centralnic Group's CAPEX/Revenue dropped on 0.268 pp from 0.682% in 2012 to 0.414% in 2015. It's average level of CAPEX/Revenue for the last three years was 1.38%.
Leverage (Debt)
Centralnic Group has negative net debt at -6.5x Net Debt/EBITDA - at the same time with high growth. In the last 3 years leverage surged on 6.35x from -0.14x in 2012 to -6.49x in 2015.
Valuation vs. comparable companies
At the end of trading day today Centralnic Group traded at 8.7x EV/EBITDA which is 37.4% lower than 13.9x Software & Computer Services peer group avearge calculated on the basis of 126 companies. At the end of trading day today Centralnic Group traded at 49.3x P/E which is 98% higher than 24.9x Software & Computer Services peer group avearge calculated on the basis of 12 companies.
Peers in Software & Computer Services
Below we provide Centralnic Group 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Coms ($COMS) | | | 46.8% | 763.3% | 110.4% |
| Proactis Hldgs ($PHD) | | 20.4% | 7.0% | 26.2% | 69.6% |
| Progility ($PGY) | | 4.6% | | | 51.0% |
| Nasstar ($NASA) | | 5.9% | | | 23.0% |
| Sopheon ($SPE) | | 23.2% | 5.3% | -16.6% | 23.0% |
| |
|---|
| Median (38 companies) | 34.2% | 7.1% | 6.6% | 0.3% | 2.0% |
|---|
| Centralnic Group ($CNIC) | | 15.9% | 4.0% | 98.9% | 71.3% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Lombard Risk Management ($LRM) | 99.3% | 99.0% | 98.8% | 99.2% | 98.6% |
| Phoenix It Group ($PNX) | 97.1% | 97.0% | 97.2% | 97.6% | 97.9% |
| Wandisco ($WAND) | 92.2% | 91.8% | 80.3% | 80.7% | 93.2% |
| Netcall ($NET) | 86.9% | 88.2% | 89.7% | 91.0% | 90.9% |
| Eleco ($ELCO) | 70.3% | 86.8% | 86.6% | 87.8% | 88.9% |
| |
|---|
| Median (31 companies) | 60.6% | 59.6% | 61.7% | 57.8% | 60.3% |
|---|
| Centralnic Group ($CNIC) | 61.0% | 73.4% | 76.6% | 58.9% | 46.8% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Mail.Ru Group Ltd ($61HE) | 39.9% | 43.1% | 47.4% | 50.5% | 34.6% |
| Omg ($OMG) | 7.1% | 15.7% | 6.0% | 14.7% | 28.4% |
| Microgen ($MCGN) | 26.8% | 31.5% | 32.8% | 24.5% | 26.8% |
| Proactis Hldgs ($PHD) | 1.7% | 13.3% | 18.3% | 22.8% | 26.4% |
| Statpro Group ($SOG) | 26.5% | 30.5% | 28.8% | 24.7% | 24.7% |
| |
|---|
| Median (38 companies) | 14.1% | 13.1% | 11.0% | 9.7% | 7.4% |
|---|
| Centralnic Group ($CNIC) | 32.9% | 38.7% | 31.1% | 24.8% | 28.3% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Coms ($COMS) | | 0.5% | 0.9% | 3.4% | 7.5% |
| Csf Group ($CSFG) | 15.4% | 1.5% | 4.0% | 2.4% | 7.1% |
| Nasstar ($NASA) | 7.3% | 17.9% | | 2.1% | 5.2% |
| Unisys Corp ($USY) | 2.1% | 2.1% | 2.5% | 4.1% | 5.0% |
| International Bus Mach Corp ($IBM) | 3.8% | 3.9% | 3.7% | 4.0% | 4.4% |
| |
|---|
| Median (38 companies) | 1.4% | 1.5% | 1.5% | 1.9% | 1.1% |
|---|
| Centralnic Group ($CNIC) | 0.5% | 0.7% | 1.6% | 2.1% | 0.4% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Triad Group ($TRD) | -26.9% | 4.1% | -3.8% | 24.5% | 61.5% |
| International Bus Mach Corp ($IBM) | 36.2% | 36.1% | 31.0% | 28.1% | 25.7% |
| Instem ($INS) | 30.3% | 20.6% | 14.7% | 10.9% | 20.4% |
| Kalibrate Technologies ($KLBT) | | 12.5% | 40.2% | 29.2% | 18.8% |
| Sopheon ($SPE) | 6.5% | 10.1% | 8.7% | -10.5% | 14.7% |
| |
|---|
| Median (38 companies) | 12.8% | 10.3% | 9.9% | 8.3% | 3.7% |
|---|
| Centralnic Group ($CNIC) | 121.9% | 127.8% | 24.5% | 16.4% | 17.1% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Progility ($PGY) | 1.0x | 2.0x | | 1.8x | 12.8x |
| Parity Group ($PTY) | 6.9x | 4.7x | | 4.9x | 5.1x |
| Nasstar ($NASA) | -2.3x | -5.3x | | 0.0x | 1.9x |
| Phoenix It Group ($PNX) | 1.4x | 4.3x | | | 1.9x |
| International Bus Mach Corp ($IBM) | 0.8x | 0.9x | 1.2x | 1.4x | 1.7x |
| |
|---|
| Median (28 companies) | -0.8x | -0.5x | -0.4x | -0.3x | -0.4x |
|---|
| Centralnic Group ($CNIC) | -0.0x | -0.1x | -5.2x | -2.0x | -6.5x |
