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Zoo Digital Group Debt surged on 13.1% in 2016 and EBITDA surged on 129%

06 Jul 2016 • About Zoo Digital Group ($ZOO) • By InTwits

Zoo Digital Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Zoo Digital Group doesn't have a profitable business model yet: FY2016 ROIC is -15.0%
  • EBITDA Margin is quite volatile: 1.3% in FY2016, -4.8% in FY2015, -4.0% in FY2014, 6.1% in FY2013, 2.0% in FY2012
  • Zoo Digital Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's in pair with industry average of 2.1%.
  • CAPEX is quite volatile: 0.032 in FY2016, 0.067 in FY2015, 0.37 in FY2014, 0.25 in FY2013, 0.27 in FY2012
  • The company has unprofitable business model: ROIC is at -15.0%
  • It operates with high leverage: Net Debt/EBITDA is 38.3x while industry average is 0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Zoo Digital Group ($ZOO) key annual financial indicators

mln. $201220132014201520162016/2015
P&L
Revenue11.18610.3639.56211.46511.6381.5%
Gross Profit9.2799.6187.8548.9829.2392.9%
EBITDA0.2220.633-0.384-0.5470.156-128.5%
Net Income-2.026-1.090-2.692-2.058-0.787-61.8%
Balance Sheet
Cash1.2340.9600.1220.3250.314-3.4%
Short Term Debt0.1942.8640.1470.1050.14235.2%
Long Term Debt2.9390.1155.2385.4536.14212.6%
Cash flow
Capex0.2740.2520.3690.0670.032-52.2%
Ratios
Revenue growth-18.7%-7.4%-7.7%19.9%1.5%
EBITDA growth-90.1%185.1%-160.7%42.4%-128.5%
Gross Margin83.0%92.8%82.1%78.3%79.4%1.0%
EBITDA Margin2.0%6.1%-4.0%-4.8%1.3%6.1%
Net Income Margin-18.1%-10.5%-28.2%-18.0%-6.8%11.2%
CAPEX, % of revenue2.4%2.4%3.9%0.6%0.3%-0.3%
ROIC-10.3%-10.2%-21.8%-23.7%-15.0%8.6%
ROE-33.4%-14.2%-45.6%-58.0%-36.7%21.4%
Net Debt/EBITDA8.6x3.2x38.3x38.3x

Revenue and profitability


Zoo Digital Group's Revenue increased slightly on 1.5% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 355 pp from -91.3% to -446% in FY2016.

Gross Margin increased slightly on 1.0 pp from 78.3% to 79.4% in FY2016.

Net Income marign surged on 11.2 pp from -18.0% to -6.8% in FY2016.

Capital expenditures (CAPEX) and working capital investments


The company's CAPEX/Revenue was 0.27% in FY2016. CAPEX/Revenue decreased on 2.2 pp from 2.4% in FY2013 to 0.27% in FY2016. It's average CAPEX/Revenue for the last three years was 1.6%.

Return on investment


The company operates at negative ROIC (-15.02%) and ROE (-36.66%). ROIC increased on 8.6 pp from -23.7% to -15.0% in FY2016. ROE jumped on 21.4 pp from -58.0% to -36.7% in FY2016.

Leverage (Debt)


Company's Net Debt / EBITDA is 38.3x and Debt / EBITDA is 40.3x. Net Debt / EBITDA surged38.3x from to 38.3x in FY2016. Debt jumped on 13.1% in FY2016 while cash decreased on 3.4% in FY2016.

Appendix 1: Peers in Software & Computer Services


Below you can find Zoo Digital 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%
Galasys ($GLS)14.3%20.9%311.1%33.0%
 
Median (44 companies)8.4%6.8%5.2%3.6%20.6%
Zoo Digital Group ($ZOO)-7.4%-7.7%19.9%1.5%


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)62.7%62.0%58.0%60.2%17.3%
Zoo Digital Group ($ZOO)83.0%92.8%82.1%78.3%79.4%


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)14.3%13.8%13.2%12.6%4.0%
Zoo Digital Group ($ZOO)2.0%6.1%-4.0%-4.8%1.3%


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%1.4%0.5%
Zoo Digital Group ($ZOO)2.4%2.4%3.9%0.6%0.3%


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)13.5%11.6%9.8%6.2%9.7%
Zoo Digital Group ($ZOO)-10.3%-10.2%-21.8%-23.7%-15.0%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Progility ($PGY)2.0x1.8x12.8x
Parity Group ($PTY)4.7x4.9x5.1x
Nasstar ($NASA)-5.3x0.0x1.9x
Phoenix It Group ($PNX)4.3x1.9x
International Bus Mach Corp ($IBM)0.9x1.2x1.4x1.7x
 
Median (35 companies)-0.5x-0.5x-0.3x-0.5x-2.1x


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