Looking for a growth stock? Pay attention to Triad Group
20 Jun 2016 • About Triad Group (
$TRD) • By InTwits
Triad Group is an attractive growth stock in Software & Computer Services industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Triad Group showed fast growth in the last financial year. The company's revenue surged on 20.6% in FY2016. EBITDA also increased considerably: 109% for the same period.
In the longer period the company showed fast revenue growth of 14.5% from FY2013 to FY2016 annually. EBITDA surged on 187% from FY2013 to FY2016 annually.
Triad Group ($TRD) financials for the last 5 years
| mln. £ | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 19 | 19 | 20 | 23 | 28 |
|---|
| Revenue growth, % | | -2.9% | 4.4% | 19.2% | 20.6% |
|---|
| Gross margin, % | 16.7% | 14.3% | 14.5% | 14.1% | 15.0% |
|---|
| SG&A, % | | | | 12.1% | 11.5% |
|---|
| EBITDA | 0 | 0 | 0 | 1 | 1 |
|---|
| EBITDA growth, % | | -82.9% | 316.7% | 171.5% | 108.7% |
|---|
| EBITDA margin, % | 1.44% | 0.254% | 1.02% | 2.31% | 4.00% |
|---|
| Net Income | 0 | 0 | 0 | 0 | 1 |
|---|
| Net Income margin, % | 1.03% | 0.148% | 0.0558% | 1.50% | 4.28% |
|---|
| |
| CAPEX | 0 | 0 | 0 | 0 | 0 |
|---|
| CAPEX/Revenue, % | 0.0771% | 0.0742% | 0.102% | 0.413% | 0.148% |
|---|
| Debt | 1 | 0 | 0 | 0 | 0 |
|---|
| Cash | 0 | 0 | 0 | 0 | 1 |
|---|
| Net Debt/EBITDA | 1.8x | -5.9x | 0.1x | -0.7x | -0.8x |
|---|
| |
| ROIC, % | 4.1% | -3.8% | 24.5% | 61.5% | 74.4% |
|---|
| ROE, % | 78.4% | 7.4% | 2.5% | 53.4% | 83.8% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. Triad Group's EBITDA margin surged on 1.70 pp from 2.30% to 4% in FY2016. If we look for the longer period Triad Group showed fast EBITDA margin growth of 3.70 pp from 0.300% in FY2013 to 4% in FY2016.
Triad Group shows attractive ROIC at 74.4% for the last 12 months which assumes stable development model. Three years ago it was considerably lower at -3.77%. It's average level of ROIC for the last three years was 53.5%.
The company showed fast Net Income margin growth of 2.80 pp from 1.50% to 4.30% in FY2016. If we look for the longer period Net Income margin surged on 4.20 pp from 0.100% in FY2013 to 4.30% in FY2016.
Triad Group operates at ROE of 83.8%. Average ROE for the last three years was 46.6%.
Capital expenditures (CAPEX)
Triad Group's CAPEX/Revenue was 0.148% in FY2016. The company's CAPEX/Revenue surged on 0.0742 pp from 0.0742% in FY2013 to 0.148% in FY2016. Average CAPEX/Revenue for the last three years was 0.221%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -0.8x Net Debt/EBITDA. If we look for the longer period leverage surged on 5.07x from -5.90x in FY2013 to -0.83x in FY2016.
Peers in Software & Computer Services
Below we provide Triad 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Coms ($COMS) | | 46.8% | 763.3% | 110.4% | 36.1% |
| Centralnic Group ($CNIC) | 15.9% | 4.0% | 98.9% | 71.3% | |
| Proactis Hldgs ($PHD) | 20.4% | 7.0% | 26.2% | 69.6% | |
| Progility ($PGY) | 4.6% | | | 51.0% | |
| Nasstar ($NASA) | 5.9% | | | 23.0% | |
| |
|---|
| Median (38 companies) | 7.2% | 6.6% | 0.3% | 2.0% | 10.3% |
|---|
| Triad Group ($TRD) | | -2.9% | 4.4% | 19.2% | 20.6% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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% | |
| Eleco ($ELCO) | 86.8% | 86.6% | 87.8% | 88.9% | |
| |
|---|
| Median (31 companies) | 62.1% | 62.0% | 58.4% | 60.3% | 17.3% |
|---|
| Triad Group ($TRD) | 16.7% | 14.3% | 14.5% | 14.1% | 15.0% |
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Mail.Ru Group Ltd ($61HE) | 43.1% | 47.4% | 50.5% | 34.6% | |
| Omg ($OMG) | 15.7% | 6.0% | 14.7% | 28.4% | |
| Centralnic Group ($CNIC) | 38.7% | 31.1% | 24.8% | 28.3% | |
| Microgen ($MCGN) | 31.5% | 32.8% | 24.5% | 26.8% | |
| Proactis Hldgs ($PHD) | 13.3% | 18.3% | 22.8% | 26.4% | |
| |
|---|
| Median (38 companies) | 13.3% | 12.5% | 9.8% | 10.6% | 3.0% |
|---|
| Triad Group ($TRD) | 1.4% | 0.3% | 1.0% | 2.3% | 4.0% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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 ($IBM) | 3.9% | 3.7% | 4.0% | 4.4% | |
| |
|---|
| Median (38 companies) | 1.5% | 1.6% | 1.9% | 1.1% | 0.5% |
|---|
| Triad Group ($TRD) | 0.1% | 0.1% | 0.1% | 0.4% | 0.1% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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% | |
| Sopheon ($SPE) | 10.1% | 8.7% | -10.5% | 14.7% | |
| |
|---|
| Median (38 companies) | 10.7% | 11.1% | 8.3% | 3.7% | -6.5% |
|---|
| Triad Group ($TRD) | 4.1% | -3.8% | 24.5% | 61.5% | 74.4% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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 ($IBM) | 0.9x | 1.2x | 1.4x | 1.7x | |
| |
|---|
| Median (28 companies) | -0.5x | -0.4x | -0.4x | -0.4x | -2.1x |
|---|
| Triad Group ($TRD) | 1.8x | -5.9x | 0.1x | -0.7x | -0.8x |
