Prime People reports 50.1% Net Income growth and 1.8 pp EBITDA Margin growth from 9.6% to 11.4%
23 Jun 2016 • About Prime People (
$PRP) • By InTwits
Prime People reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 11.4% in FY2016 vs. 9.6% in FY2015 vs. 8.3% in FY2012
- Prime People has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has highly profitable business model: ROIC is at 16.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Prime People ($PRP) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 12.652 | 13.038 | 14.442 | 16.647 | 20.755 | 24.7% |
| Gross Profit | 8.026 | 7.595 | 8.327 | 10.222 | 12.280 | 20.1% |
| SG&A | | | | 8.792 | 10.131 | 15.2% |
| EBITDA | 1.051 | 0.857 | 1.168 | 1.602 | 2.370 | 47.9% |
| Net Income | 0.680 | 0.560 | 0.842 | 1.126 | 1.690 | 50.1% |
Balance Sheet
|
|---|
| Cash | 2.831 | 2.282 | 2.963 | 1.009 | 0.953 | -5.6% |
| Short Term Debt | 0.007 | 0.026 | 0.001 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.060 | 0.189 | 0.180 | 0.156 | 0.097 | -37.8% |
Ratios
|
|---|
| Revenue growth | -9.3% | 3.1% | 10.8% | 15.3% | 24.7% | |
| EBITDA growth | -10.5% | -18.5% | 36.3% | 37.2% | 47.9% | |
| Gross Margin | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% | -2.2% |
| EBITDA Margin | 8.3% | 6.6% | 8.1% | 9.6% | 11.4% | 1.8% |
| Net Income Margin | 5.4% | 4.3% | 5.8% | 6.8% | 8.1% | 1.4% |
| SG&A, % of revenue | | | | 52.8% | 48.8% | -4.0% |
| CAPEX, % of revenue | 0.5% | 1.4% | 1.2% | 0.9% | 0.5% | -0.5% |
| ROIC | 6.7% | 5.4% | 7.3% | 10.2% | 16.1% | 5.9% |
| ROE | 4.9% | 4.0% | 5.9% | 8.1% | 12.6% | 4.5% |
| Net Debt/EBITDA | -2.7x | -2.6x | -2.5x | -0.6x | -0.4x | 0.2x |
Revenue and profitability
The company's Revenue jumped on 24.7% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 45.7 pp from -71.9% to -26.2% in FY2016.
Gross Margin decreased on 2.2 pp from 61.4% to 59.2% in FY2016. SG&A as a % of Revenue decreased on 4.0 pp from 52.8% to 48.8% in FY2016.
Net Income marign increased slightly on 1.4 pp from 6.8% to 8.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.47% in FY2016. The company showed small CAPEX/Revenue decline of 0.98 pp from 1.4% in FY2013 to 0.47% in FY2016. Average CAPEX/Revenue for the last three years was 0.88%.
Return on investment
The company operates at good ROIC (16.13%) and ROE (12.57%). ROIC increased on 5.9 pp from 10.2% to 16.1% in FY2016. ROE increased on 4.5 pp from 8.1% to 12.6% in FY2016.
Leverage (Debt)
The company has no debt. Cash decreased on 5.6% in FY2016.
Appendix 1: Peers in Support Services
Below we provide Prime People benchmarking against other companies in Support 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 |
|---|
| Camco Clean Energy ($CCE) | | 88.0% | -54.7% | 99.4% | |
| Optimal Payments ($OPAY) | 39.9% | 41.5% | 44.0% | 68.1% | |
| Inspired Energy ($INSE) | 83.8% | 44.8% | 42.2% | 40.2% | |
| 21St Century Technology ($C21) | 0.1% | -22.8% | -16.6% | 35.5% | |
| Ibex Global Solutions ($IBEX) | 7.4% | 35.7% | 30.0% | 29.8% | |
| |
|---|
| Median (54 companies) | 5.9% | 8.0% | 4.7% | 6.6% | 1.3% |
|---|
| Prime People ($PRP) | | 3.1% | 10.8% | 15.3% | 24.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Inspired Energy ($INSE) | 94.6% | 86.8% | 78.7% | 76.2% | |
| Ienergizer Ltd ($IBPO) | 56.2% | 78.4% | 76.8% | 72.7% | |
| Grafenia ($GRA) | 53.4% | 54.3% | 56.1% | 70.8% | 66.3% |
| Vianet Group ($VNET) | 53.3% | 51.3% | 58.8% | 69.2% | 70.1% |
| Murgitroyd Group ($MUR) | 58.4% | 61.4% | 57.6% | 55.4% | |
| |
|---|
| Median (48 companies) | 28.2% | 28.5% | 29.2% | 28.6% | 28.3% |
|---|
| Prime People ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($C21) | 13.4% | -0.2% | 36.0% | 44.8% | |
| Northgate ($67GX) | 41.2% | 40.4% | 40.6% | 39.4% | 38.3% |
| Inspired Energy ($INSE) | 46.2% | 48.5% | 1.5% | 35.4% | |
| Vianet Group ($VNET) | 18.6% | 17.3% | 19.7% | 27.1% | 22.1% |
| Vp ($VP.) | 23.9% | 24.5% | 24.2% | 26.2% | 28.4% |
| |
|---|
| Median (54 companies) | 6.7% | 6.3% | 6.8% | 7.2% | 7.7% |
|---|
| Prime People ($PRP) | 8.3% | 6.6% | 8.1% | 9.6% | 11.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($VP.) | 21.4% | 17.7% | 21.6% | 25.7% | 24.1% |
| Sagentia Group ($SAG) | 1.9% | 1.4% | 1.5% | 25.2% | |
| Nature Group ($NGR) | 14.3% | 7.2% | 5.6% | 22.9% | |
| Augean ($AUG) | 9.8% | 15.9% | 12.3% | 12.3% | |
| Falkland Islands Hldgs ($FKL) | 3.7% | 6.8% | 12.9% | 11.9% | 4.8% |
| |
|---|
| Median (54 companies) | 1.1% | 1.1% | 1.0% | 1.1% | 2.0% |
|---|
| Prime People ($PRP) | 0.5% | 1.4% | 1.2% | 0.9% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($C21) | 20.3% | -2.9% | 45.6% | 111.0% | |
| Inspired Energy ($INSE) | 63.9% | 65.5% | -7.5% | 28.0% | |
| Petards Group ($PEG) | 35.5% | -78.0% | 24.7% | 23.9% | |
| Servoca ($SVCA) | 1.0% | 7.8% | 14.9% | 22.3% | |
| Rtc Group ($RTC) | 14.6% | 17.6% | 19.9% | 22.2% | |
| |
|---|
| Median (54 companies) | 9.9% | 7.9% | 9.4% | 10.0% | 8.1% |
|---|
| Prime People ($PRP) | 6.7% | 5.4% | 7.3% | 10.2% | 16.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($RHL) | 22.8x | 5.8x | 6.6x | 16.8x | |
| Mitsubishi Corp ($MBC) | 9.9x | 15.9x | 14.3x | 12.5x | 25.0x |
| Ienergizer Ltd ($IBPO) | 6.3x | 2.8x | 3.0x | 4.0x | |
| Ceps ($CEPS) | | 3.0x | 6.6x | 3.8x | |
| Kellan Group(The ($KLN) | | | 6.5x | 3.6x | |
| |
|---|
| Median (50 companies) | 0.8x | 0.7x | 0.6x | 0.4x | -0.0x |
|---|
| Prime People ($PRP) | -2.7x | -2.6x | -2.5x | -0.6x | -0.4x |
