Proactis Holdings Net Income surged on 23.3% in 2016 and Revenue jumped on 12.5%
12 Oct 2016 • About Proactis Holdings (
$PHD) • By InTwits
Proactis Holdings reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Proactis Holdings is a growth stock: FY2016 revenue growth was 12.5%, 5 year revenue CAGR was 25.4% at FY2016 ROIC 11.1%
- Proactis Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- The company has business model with average profitability: ROIC is at 11.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Proactis Holdings ($PHD) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 7.513 | 8.042 | 10.150 | 17.219 | 19.374 | 12.5% |
| Gross Profit | 5.147 | 5.602 | 7.475 | 13.841 | 15.973 | 15.4% |
| SG&A | | | | 12.259 | | -100.0% |
| EBITDA | 0.998 | 1.472 | 2.316 | 4.543 | 4.601 | 1.3% |
| Net Income | 0.154 | 0.349 | 0.322 | 2.016 | 2.485 | 23.3% |
Balance Sheet
|
|---|
| Cash | 2.668 | 2.338 | 3.124 | 3.424 | 3.595 | 5.0% |
| Short Term Debt | 0.000 | 0.000 | 0.400 | 0.650 | 1.393 | 114.3% |
| Long Term Debt | 0.000 | 0.000 | 1.100 | 1.263 | 2.656 | 110.3% |
Cash flow
|
|---|
| Capex | 0.046 | 0.022 | 0.057 | 0.229 | 0.169 | -26.2% |
Ratios
|
|---|
| Revenue growth | 20.4% | 7.0% | 26.2% | 69.6% | 12.5% | |
| EBITDA growth | 815.6% | 47.5% | 57.3% | 96.2% | 1.3% | |
| Gross Margin | 68.5% | 69.7% | 73.6% | 80.4% | 82.4% | 2.1% |
| EBITDA Margin | 13.3% | 18.3% | 22.8% | 26.4% | 23.7% | -2.6% |
| Net Income Margin | 2.0% | 4.3% | 3.2% | 11.7% | 12.8% | 1.1% |
| SG&A, % of revenue | | | | 71.2% | | -71.2% |
| CAPEX, % of revenue | 0.6% | 0.3% | 0.6% | 1.3% | 0.9% | -0.5% |
| ROIC | 0.3% | 2.0% | 9.8% | 14.4% | 11.1% | -3.3% |
| ROE | 2.5% | 5.5% | 4.1% | 19.2% | 20.3% | 1.1% |
| Net Debt/EBITDA | -2.7x | -1.6x | -0.7x | -0.3x | 0.1x | 0.4x |
Revenue and profitability
Proactis Holdings's Revenue surged on 12.5% in FY2016. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.6 pp from 26.4% to 23.7% in FY2016.
Gross Margin increased on 2.1 pp from 80.4% to 82.4% in FY2016.
Net Income marign increased slightly on 1.1 pp from 11.7% to 12.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.87% in FY2016. Proactis Holdings's CAPEX/Revenue increased slightly on 0.60 pp from 0.27% in FY2013 to 0.87% in FY2016. For the last three years the average CAPEX/Revenue was 0.92%.
Return on investment
The company operates at good ROE (20.33%) while ROIC is low (11.11%). ROIC decreased on 3.3 pp from 14.4% to 11.1% in FY2016. ROE increased slightly on 1.1 pp from 19.2% to 20.3% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 0.9x. Net Debt / EBITDA jumped on 0.4x from -0.3x to 0.1x in FY2016. Debt surged on 112% in FY2016 while cash increased on 5.0% in FY2016.
Valuation
The company's trades at EV/EBITDA 12.1x and P/E 22.1x while industy averages are 15.6x and 19.1x.
Appendix 1: Peers in Software & Computer Services
Below we provide Proactis Holdings 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% | |
| Progility ($PGY) | | | | 51.0% | 3.2% |
| Galasys ($GLS) | 14.3% | 20.9% | 311.1% | 33.0% | |
| Dotdigital Group ($DOTD) | 6.6% | 27.8% | 32.9% | 31.8% | |
| |
|---|
| Median (44 companies) | 7.8% | 6.1% | 4.5% | 3.6% | 5.2% |
|---|
| Proactis Holdings ($PHD) | | 7.0% | 26.2% | 69.6% | 12.5% |
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% | 91.2% |
| Idox ($IDOX) | 90.4% | 90.8% | 89.4% | 89.3% | |
| |
|---|
| Median (37 companies) | 62.7% | 62.0% | 58.0% | 60.2% | 36.7% |
|---|
| Proactis Holdings ($PHD) | 68.5% | 69.7% | 73.6% | 80.4% | 82.4% |
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 ($OMG) | 15.7% | 6.0% | 14.7% | 28.4% | |
| |
|---|
| Median (44 companies) | 14.3% | 13.0% | 12.0% | 12.3% | 3.9% |
|---|
| Proactis Holdings ($PHD) | 13.3% | 18.3% | 22.8% | 26.4% | 23.7% |
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 ($CSFG) | 1.5% | 4.0% | 2.4% | 7.1% | 4.9% |
| Nasstar ($NASA) | 17.9% | | 2.1% | 5.2% | |
| Unisys Corp ($USY) | 2.1% | 2.5% | 4.1% | 5.0% | |
| |
|---|
| Median (44 companies) | 1.5% | 1.6% | 1.9% | 1.2% | 0.9% |
|---|
| Proactis Holdings ($PHD) | 0.6% | 0.3% | 0.6% | 1.3% | 0.9% |
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 ($INS) | 20.6% | 14.7% | 10.9% | 20.4% | |
| |
|---|
| Median (44 companies) | 13.5% | 11.6% | 9.4% | 4.3% | 6.4% |
|---|
| Proactis Holdings ($PHD) | 0.3% | 2.0% | 9.8% | 14.4% | 11.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Progility ($PGY) | 2.0x | | 1.8x | 12.8x | 6.8x |
| Parity Group ($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 ($IBM) | 0.9x | 1.2x | 1.4x | 1.7x | |
| |
|---|
| Median (34 companies) | -0.4x | -0.4x | -0.3x | -0.6x | -0.8x |
|---|
| Proactis Holdings ($PHD) | -2.7x | -1.6x | -0.7x | -0.3x | 0.1x |
