Ibex Global Solutions revenue increased on 7.0% in 2016 and EBITDA Margin showed almost no change
28 Sep 2016 • About Ibex Global Solutions (
$IBEX) • By InTwits
Ibex Global Solutions reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ibex Global Solutions is a growth stock: FY2016 revenue growth was 7.0%, 5 year revenue CAGR was 21.3% at FY2016 ROIC 15.9%
- EBITDA Margin is quite volatile: 7.5% in FY2016, 7.6% in FY2015, 4.5% in FY2014, 3.0% in FY2013, 0.9% in FY2012
- Ibex Global Solutions has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 2.1%.
- CAPEX is quite volatile: 9.5 in FY2016, 1.7 in FY2015, 2.8 in FY2014, 1.5 in FY2013, 0.46 in FY2012
- The company has highly profitable business model: ROIC is at 15.9%
- It operates with high leverage: Net Debt/EBITDA is 1.7x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ibex Global Solutions ($IBEX) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 104.3 | 141.5 | 184.0 | 238.8 | 255.5 | 7.0% |
| Gross Profit | 13.6 | 20.8 | 28.2 | 38.8 | 42.3 | 9.0% |
| SG&A | | | 23.3 | 30.0 | 34.5 | 15.1% |
| EBITDA | 0.9 | 4.2 | 8.3 | 18.1 | 19.1 | 5.3% |
| Net Income | -4.2 | -15.5 | 0.8 | 6.4 | 6.5 | 1.1% |
Balance Sheet
|
|---|
| Cash | 1.9 | 10.7 | 4.0 | 3.0 | 6.2 | 107.4% |
| Short Term Debt | 12.7 | 20.7 | 19.5 | 10.2 | 26.5 | 159.8% |
| Long Term Debt | 0.7 | 0.3 | 7.0 | 11.4 | 12.2 | 7.0% |
Cash flow
|
|---|
| Capex | 0.5 | 1.5 | 2.8 | 1.7 | 9.5 | 449.8% |
Ratios
|
|---|
| Revenue growth | 7.4% | 35.7% | 30.0% | 29.8% | 7.0% | |
| EBITDA growth | -70.4% | 369.6% | 100.0% | 117.3% | 5.3% | |
| Gross Margin | 13.0% | 14.7% | 15.3% | 16.2% | 16.5% | 0.3% |
| EBITDA Margin | 0.9% | 3.0% | 4.5% | 7.6% | 7.5% | -0.1% |
| Net Income Margin | -4.0% | -11.0% | 0.4% | 2.7% | 2.5% | -0.1% |
| SG&A, % of revenue | | | 12.7% | 12.6% | 13.5% | 0.9% |
| CAPEX, % of revenue | 0.4% | 1.1% | 1.5% | 0.7% | 3.7% | 3.0% |
| ROIC | -6.7% | 5.0% | 9.1% | 21.7% | 15.9% | -5.8% |
| ROE | -22.0% | -76.7% | 3.5% | 26.5% | 24.4% | -2.1% |
| Net Debt/EBITDA | 12.8x | 2.5x | 2.7x | 1.0x | 1.7x | 0.7x |
Revenue and profitability
The company's Revenue increased on 7.0% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 146 pp from 3.8% to -142% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased slightly on 0.95 pp from 12.6% to 13.5% in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.7% in FY2016. CAPEX/Revenue increased on 2.7 pp from 1.1% in FY2013 to 3.7% in FY2016. For the last three years the average CAPEX/Revenue was 2.0%.
Return on investment
The company operates at high and attractive ROE (24.43%) while ROIC is a bit lower (15.93%). ROIC decreased on 5.8 pp from 21.7% to 15.9% in FY2016. ROE decreased on 2.1 pp from 26.5% to 24.4% in FY2016.
Leverage (Debt)
Debt level is 1.7x Net Debt / EBITDA and 2.0x Debt / EBITDA. Net Debt / EBITDA surged on 0.7x from 1.0x to 1.7x in FY2016. Debt jumped on 79.1% in FY2016 while cash jumped on 107% in FY2016.
Valuation
Ibex Global Solutions's trades at EV/EBITDA 3.4x and P/E 5.0x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 6.8x with the industry average at 19.0x.
Appendix 1: Peers in Support Services
Below we provide Ibex Global Solutions 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% | |
| Rtc Group ($RTC) | 40.1% | 13.6% | 4.3% | 27.4% | |
| |
|---|
| Median (55 companies) | 0.1% | 6.9% | 4.7% | 6.6% | 1.1% |
|---|
| Ibex Global Solutions ($IBEX) | | 35.7% | 30.0% | 29.8% | 7.0% |
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% | 71.3% |
| 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% |
| Prime People ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (49 companies) | 29.5% | 28.8% | 30.4% | 28.7% | 31.1% |
|---|
| Ibex Global Solutions ($IBEX) | 13.0% | 14.7% | 15.3% | 16.2% | 16.5% |
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 (55 companies) | 6.8% | 6.4% | 6.9% | 6.9% | 10.8% |
|---|
| Ibex Global Solutions ($IBEX) | 0.9% | 3.0% | 4.5% | 7.6% | 7.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($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 (55 companies) | 1.1% | 1.1% | 1.0% | 1.1% | 1.0% |
|---|
| Ibex Global Solutions ($IBEX) | 0.4% | 1.1% | 1.5% | 0.7% | 3.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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 (55 companies) | 9.9% | 7.9% | 9.4% | 10.2% | 9.4% |
|---|
| Ibex Global Solutions ($IBEX) | -6.7% | 5.0% | 9.1% | 21.7% | 15.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($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 | 2.4x |
| Ceps ($CEPS) | | 3.0x | 6.6x | 3.8x | |
| Kellan Group(The ($KLN) | | | 6.5x | 3.6x | |
| |
|---|
| Median (51 companies) | 0.8x | 0.5x | 0.6x | 0.4x | 0.0x |
|---|
| Ibex Global Solutions ($IBEX) | 12.8x | 2.5x | 2.7x | 1.0x | 1.7x |
