Triad Group reports 109% EBITDA growth and 1.7 pp EBITDA Margin growth from 2.3% to 4.0%
13 Jun 2016 • About Triad Group (
$TRD) • By InTwits
Triad Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 4.0% in FY2016 vs. 2.3% in FY2015 vs. 1.4% in FY2012
- EBITDA Margin is quite volatile: 4.0% in FY2016, 2.3% in FY2015, 1.0% in FY2014, 0.3% in FY2013, 1.4% in FY2012
- Triad Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.2%.
- The company has highly profitable business model: ROIC is at 74.4%
- It operates with high leverage: Net Debt/EBITDA is -0.8x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Triad Group ($TRD) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 19.447 | 18.880 | 19.702 | 23.482 | 28.317 | 20.6% |
| Gross Profit | 3.239 | 2.704 | 2.863 | 3.311 | 4.236 | 27.9% |
| SG&A | | | | 2.849 | 3.256 | 14.3% |
| EBITDA | 0.280 | 0.048 | 0.200 | 0.543 | 1.133 | 108.7% |
| Net Income | 0.201 | 0.028 | 0.011 | 0.352 | 1.213 | 244.6% |
Balance Sheet
|
|---|
| Cash | 0.048 | 0.283 | 0.108 | 0.390 | 0.955 | 144.9% |
| Short Term Debt | 0.545 | 0.000 | 0.109 | 0.006 | 0.007 | 16.7% |
| Long Term Debt | 0.000 | 0.000 | 0.024 | 0.018 | 0.011 | -38.9% |
Cash flow
|
|---|
| Capex | 0.015 | 0.014 | 0.020 | 0.097 | 0.042 | -56.7% |
Ratios
|
|---|
| Revenue growth | -16.5% | -2.9% | 4.4% | 19.2% | 20.6% | |
| EBITDA growth | 937.0% | -82.9% | 316.7% | 171.5% | 108.7% | |
| Gross Margin | 16.7% | 14.3% | 14.5% | 14.1% | 15.0% | 0.9% |
| EBITDA Margin | 1.4% | 0.3% | 1.0% | 2.3% | 4.0% | 1.7% |
| Net Income Margin | 1.0% | 0.1% | 0.1% | 1.5% | 4.3% | 2.8% |
| SG&A, % of revenue | | | | 12.1% | 11.5% | -0.6% |
| CAPEX, % of revenue | 0.1% | 0.1% | 0.1% | 0.4% | 0.1% | -0.3% |
| ROIC | 4.1% | -3.8% | 24.5% | 61.5% | 74.4% | 13.0% |
| ROE | 78.4% | 7.4% | 2.5% | 53.4% | 83.8% | 30.4% |
| Net Debt/EBITDA | 1.8x | -5.9x | 0.1x | -0.7x | -0.8x | -0.2x |
Revenue and profitability
Triad Group's Revenue jumped on 20.6% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.7 pp from 8.0% to 11.7% in FY2016.
Gross Margin increased slightly on 0.86 pp from 14.1% to 15.0% in FY2016. SG&A as a % of Revenue decreased slightly on 0.63 pp from 12.1% to 11.5% in FY2016.
Net Income marign increased on 2.8 pp from 1.5% to 4.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Triad Group's CAPEX/Revenue was 0.15% in FY2016. The company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 0.22%.
Return on investment
The company operates at high and attractive ROIC (74.44%) and ROE (83.80%). ROIC surged on 13.0 pp from 61.5% to 74.4% in FY2016. ROE jumped on 30.4 pp from 53.4% to 83.8% in FY2016.
Leverage (Debt)
Debt level is -0.8x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from -0.7x to -0.8x in FY2016. Debt dropped on 25% in FY2016 while cash surged on 145% in FY2016.
Appendix 1: Peers in Software & Computer Services
Below you can find Triad Group benchmarking vs. other companies in Software & Computer 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Coms ($COMS) | | 46.8% | 763.3% | 110.4% | 36.1% |
| Centralnic Group ($CNIC) | 15.9% | 4.0% | 98.9% | 71.3% | |
| Proactis Holdings ($PHD) | 20.4% | 7.0% | 26.2% | 69.6% | |
| Progility ($PGY) | 4.6% | | | 51.0% | |
| Dotdigital Group ($DOTD) | 6.6% | 27.8% | 32.9% | 31.8% | |
| |
|---|
| Median (42 companies) | 7.8% | 6.6% | 4.7% | 3.6% | 10.3% |
|---|
| Triad Group ($TRD) | | -2.9% | 4.4% | 19.2% | 20.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lombard Risk Management ($LRM) | 99.0% | 98.8% | 99.2% | 98.6% | 99.3% |
| Phoenix It Group ($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 ($IDOX) | 90.4% | 90.8% | 89.4% | 89.3% | |
| |
|---|
| Median (35 companies) | 63.5% | 62.1% | 60.0% | 61.2% | 17.3% |
|---|
| Triad Group ($TRD) | 16.7% | 14.3% | 14.5% | 14.1% | 15.0% |
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% | |
| Centralnic Group ($CNIC) | 38.7% | 31.1% | 24.8% | 28.3% | |
| |
|---|
| Median (42 companies) | 14.3% | 13.4% | 13.0% | 12.3% | 3.0% |
|---|
| Triad Group ($TRD) | 1.4% | 0.3% | 1.0% | 2.3% | 4.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Coms ($COMS) | 0.5% | 0.9% | 3.4% | 7.5% | 0.1% |
| Csf Group ($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 ($IBM) | 3.9% | 3.7% | 4.0% | 4.4% | |
| |
|---|
| Median (42 companies) | 1.5% | 1.6% | 1.9% | 1.4% | 0.5% |
|---|
| Triad Group ($TRD) | 0.1% | 0.1% | 0.1% | 0.4% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% | |
| Centralnic Group ($CNIC) | 127.8% | 24.5% | 16.4% | 17.1% | |
| |
|---|
| Median (42 companies) | 13.0% | 11.6% | 9.0% | 4.3% | -6.5% |
|---|
| Triad Group ($TRD) | 4.1% | -3.8% | 24.5% | 61.5% | 74.4% |
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 ($IBM) | 0.9x | 1.2x | 1.4x | 1.7x | |
| |
|---|
| Median (32 companies) | -0.5x | -0.4x | -0.3x | -0.4x | -2.1x |
|---|
| Triad Group ($TRD) | 1.8x | -5.9x | 0.1x | -0.7x | -0.8x |
