IMImobile EBITDA surged on 161% in 2016 and Revenue surged on 26.1%

05 Jul 2016 • About IMImobile ($IMO) • By InTwits

IMImobile reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is quite volatile: 11.1% in FY2016, 5.4% in FY2015, 16.4% in FY2014, 14.6% in FY2013, 14.3% in FY2012
IMImobile has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's a lot of higher than industry average of 2.1%.
CAPEX is quite volatile: 0.11 in FY2016, 2.0 in FY2015, 0.12 in FY2014, 0.11 in FY2013, 0.18 in FY2012
The company has business model with low profitability: ROIC is at 9.7%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

IMImobile ($IMO) key annual financial indicators

mln. £	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	38.664	38.529	43.404	48.876	61.630	26.1%
Gross Profit	24.256	23.546	27.899	30.028	36.522	21.6%
SG&A			23.004
EBITDA	5.528	5.621	7.106	2.619	6.846	161.4%
Net Income	1.840	2.102	3.919	-5.975	3.410	-157.1%
Balance Sheet
Cash	2.027	4.643	9.305	14.617	15.039	2.9%
Short Term Debt	2.335	1.320	0.000	0.000	0.000
Long Term Debt	1.313	0.000	10.895	0.000	0.000
Cash flow
Capex	2.038	1.289	1.683	0.967	2.006	107.4%
Ratios
Revenue growth	27.7%	-0.3%	12.7%	12.6%	26.1%
EBITDA growth	3.1%	1.7%	26.4%	-63.1%	161.4%
Gross Margin	62.7%	61.1%	64.3%	61.4%	59.3%	-2.2%
EBITDA Margin	14.3%	14.6%	16.4%	5.4%	11.1%	5.7%
Net Income Margin	4.8%	5.5%	9.0%	-12.2%	5.5%	17.8%
SG&A, % of revenue			53.0%			0.0%
CAPEX, % of revenue	5.3%	3.3%	3.9%	2.0%	3.3%	1.3%
ROIC	37.9%	27.6%	27.2%	0.5%	9.7%	9.2%
ROE	39.8%	25.4%	32.8%	-27.6%	10.6%	38.1%
Net Debt/EBITDA	0.3x	-0.6x	0.2x	-5.6x	-2.2x	3.4x

Revenue and profitability

IMImobile's Revenue surged on 26.1% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 23.7 pp from -18.7% to 5.0% in FY2016.

Gross Margin decreased on 2.2 pp from 61.4% to 59.3% in FY2016.

Net Income marign surged on 17.8 pp from -12.2% to 5.5% in FY2016.

Capital expenditures (CAPEX) and working capital investments

In FY2016 the company had CAPEX/Revenue of 3.3%. IMImobile showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 3.0%.

Return on investment

The company operates at low ROIC (9.75%) and ROE (10.56%). ROIC increased on 9.2 pp from 0.54% to 9.7% in FY2016. ROE jumped on 38.1 pp from -27.6% to 10.6% in FY2016.

Leverage (Debt)

The company has no debt. Cash increased on 2.9% in FY2016.

Valuation

IMImobile's trades at EV/EBITDA 14.3x and P/E 33.2x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 20.3x with the industry average at 19.0x.

Appendix 1: Peers in Software & Computer Services

Below we provide IMImobile 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
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%
Galasys ($GLS)	14.3%	20.9%	311.1%	33.0%
Median (44 companies)	7.8%	6.8%	4.5%	3.6%	15.5%
IMImobile ($IMO)		-0.3%	12.7%	12.6%	26.1%

Top companies by Gross margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Lombard Risk Management ($LRM)	99.0%	98.8%	99.2%	98.6%	99.3%
Phoenix It Group ($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 ($IDOX)	90.4%	90.8%	89.4%	89.3%
Median (37 companies)	63.2%	63.0%	58.0%	60.2%	16.1%
IMImobile ($IMO)	62.7%	61.1%	64.3%	61.4%	59.3%

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 ($IDOX)	30.9%	26.1%	26.0%	28.6%
Galasys ($GLS)	44.0%	83.6%	32.6%	28.5%
Oxford Metrics ($OMG)	15.7%	6.0%	14.7%	28.4%
Median (44 companies)	13.8%	13.0%	12.0%	12.6%	3.5%
IMImobile ($IMO)	14.3%	14.6%	16.4%	5.4%	11.1%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Rapidcloud Intl ($RCI)	1.0%	23.1%	11.6%	19.6%
Coms ($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 ($USY)	2.1%	2.5%	4.1%	5.0%
Median (44 companies)	1.5%	1.5%	1.9%	1.1%	0.3%
IMImobile ($IMO)	5.3%	3.3%	3.9%	2.0%	3.3%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Triad Group ($TRD)	4.1%	-3.8%	24.5%	61.5%	74.4%
Dotdigital Group ($DOTD)	26.4%	38.0%	28.5%	31.4%
International Bus Mach Corp ($IBM)	36.1%	31.0%	28.1%	25.7%
Galasys ($GLS)	58.7%	60.9%	40.8%	22.2%
Instem ($INS)	20.6%	14.7%	10.9%	20.4%
Median (44 companies)	12.5%	11.5%	9.4%	6.2%	1.7%
IMImobile ($IMO)	37.9%	27.6%	27.2%	0.5%	9.7%

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 ($IBM)	0.9x	1.2x	1.4x	1.7x
Median (34 companies)	-0.5x	-0.4x	-0.3x	-0.5x	-1.4x
IMImobile ($IMO)	0.3x	-0.6x	0.2x	-5.6x	-2.2x

IMImobile stock price chart

IMImobile financials

mln.	FY2011	FY2012	FY2013

Revenue	30.271	38.664	38.529
EBITDA	5.363	5.528	5.621
Net income	-3.725	1.840	2.102
CAPEX	3.659	2.038	1.289
Debt	3.738	3.648	1.320
Cash	2.185	2.027	4.643

About IMImobile

IMImobile PLC develops and markets mobile engagement software and solutions for mobile operators, enterprises, media companies, and government/state bodies. Its products include DaVinci Evolved Service Platform, a platform that is designed for the mobile environment; DaVinci Service Delivery Platform, which unites telecom network, Web, and device capabilities; and DaVinci Content Management System that enables deployment of multi-channel value added services on a range of devices. The company also provides DaVinci Campaign Manager, which allows its customers to create, deliver, and measure multi-channel marketing campaigns; DaVinci Profile Manager, a customer profiling tool that extracts, analyses, and leverages subscriber data; and DaVinci Social, an engagement platform that provides tools to curate, augment, analyze, and distribute mobile and social content. In addition, it offers messaging products, including DaVinci SMS centre, multimedia messaging service centre, WAP gateway, USSD centre, OTA platform, and push notification products; mobile payment solutions, such as premium SMS billing and Payforit; and voice based solutions, including voice short codes, interactive voice portals, and IVR services. Further, the company provides DaVinci Subscription Manager, which manages multi-channel subscription services; number profiling and operator look up solution that allows businesses to validate the mobile numbers in their databases; and Twitter Self-Care service to access, manage, and update their account through Twitter. Additionally, it offers IMImobile OPENHOUSE, a cloud based platform that helps to access and deploy telecommunication or enterprise systems APIs. IMImobile PLC operates in Europe, India, Southeast Asia, the Middle East, Africa, and the Americas. The company was formerly known as IMImobile Limited. IMImobile PLC was founded in 1999 and is based in High Wycombe, the United Kingdom.