Croma Security Solutions Group reports 21.0% EBITDA growth and almost no change in EBITDA Margin of 3.1%
22 Nov 2016 • About Croma Security Solutions Group (
$CSSG) • By InTwits
Croma Security Solutions Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 3.1% in FY2016, 3.1% in FY2015, 4.2% in FY2014, 3.2% in FY2013, 1.0% in FY2012
- Croma Security Solutions Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has potentially unprofitable business model: ROIC is at 2.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Croma Security Solutions Group ($CSSG) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 9.899 | 13.251 | 14.813 | 15.829 | 19.031 | 20.2% |
| Gross Profit | 1.761 | 3.269 | 3.663 | 3.276 | 3.890 | 18.7% |
| SG&A | 2.189 | 3.196 | 3.348 | 3.081 | 3.675 | 19.3% |
| EBITDA | 0.102 | 0.422 | 0.629 | 0.486 | 0.588 | 21.0% |
| Net Income | -0.303 | 0.080 | 0.321 | 0.223 | 0.153 | -31.4% |
Balance Sheet
|
|---|
| Cash | 0.693 | 0.678 | 0.900 | 0.839 | 0.392 | -53.3% |
| Short Term Debt | 0.811 | 0.558 | 0.194 | 0.027 | 0.640 | 2,270.4% |
| Long Term Debt | 0.032 | 0.027 | 0.005 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.038 | 0.085 | 0.050 | 0.133 | 0.073 | -45.1% |
Ratios
|
|---|
| Revenue growth | 17.0% | 33.9% | 11.8% | 6.9% | 20.2% | |
| EBITDA growth | -77.0% | 313.9% | 48.9% | -22.8% | 21.0% | |
| Gross Margin | 17.8% | 24.7% | 24.7% | 20.7% | 20.4% | -0.3% |
| EBITDA Margin | 1.0% | 3.2% | 4.2% | 3.1% | 3.1% | 0.0% |
| Net Income Margin | -3.1% | 0.6% | 2.2% | 1.4% | 0.8% | -0.6% |
| SG&A, % of revenue | 22.1% | 24.1% | 22.6% | 19.5% | 19.3% | -0.2% |
| CAPEX, % of revenue | 0.4% | 0.6% | 0.3% | 0.8% | 0.4% | -0.5% |
| ROIC | -0.5% | 0.2% | 3.6% | 2.4% | 2.4% | -0.0% |
| ROE | -6.3% | 0.9% | 3.7% | 2.5% | 1.6% | -0.9% |
| Net Debt/EBITDA | 1.5x | -0.2x | -1.1x | -1.7x | 0.4x | 2.1x |
Revenue and profitability
The company's Revenue surged on 20.2% 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 showed almost no change in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased slightly on 0.60 pp from 1.4% to 0.80% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Croma Security Solutions Group's CAPEX/Revenue was 0.38% in FY2016. Croma Security Solutions Group showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 0.52%.
Return on investment
The company operates at low ROIC (2.35%) and ROE (1.62%). ROIC showed almost no change in FY2016. ROE decreased slightly on 0.89 pp from 2.5% to 1.6% in FY2016.
Leverage (Debt)
Debt level is 0.4x Net Debt / EBITDA and 1.1x Debt / EBITDA. Net Debt / EBITDA surged on 2.1x from -1.7x to 0.4x in FY2016. Debt jumped on 2,270% in FY2016 while cash dropped on 53.3% in FY2016.
Valuation
The company's trades at EV/EBITDA 8.3x and P/E 30.3x while industy averages are 15.6x and 19.1x.
Appendix 1: Peers in Support Services
Below you can find Croma Security Solutions Group benchmarking vs. other companies in Support 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 |
|---|
| 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 ($IBEX) | | 35.7% | 30.0% | 29.8% | 7.0% |
| |
|---|
| Median (55 companies) | 0.1% | 6.9% | 4.7% | 6.6% | 1.5% |
|---|
| Croma Security Solutions Group ($CSSG) | | 33.9% | 11.8% | 6.9% | 20.2% |
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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (49 companies) | 29.5% | 28.8% | 30.4% | 28.7% | 28.3% |
|---|
| Croma Security Solutions Group ($CSSG) | 17.8% | 24.7% | 24.7% | 20.7% | 20.4% |
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% | 7.6% | 7.9% |
|---|
| Croma Security Solutions Group ($CSSG) | 1.0% | 3.2% | 4.2% | 3.1% | 3.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($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% | 1.1% | 1.1% | 1.1% |
|---|
| Croma Security Solutions Group ($CSSG) | 0.4% | 0.6% | 0.3% | 0.8% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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% | 10.4% | 11.3% |
|---|
| Croma Security Solutions Group ($CSSG) | -0.5% | 0.2% | 3.6% | 2.4% | 2.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($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 | 0.7x | 0.6x | 0.4x | 0.0x |
|---|
| Croma Security Solutions Group ($CSSG) | 1.5x | -0.2x | -1.1x | -1.7x | 0.4x |
