Oxford Metrics Net Income dropped on 71.8% in 2016 while Revenue jumped on 14.6%
06 Dec 2016 • About Oxford Metrics (
$OMG) • By InTwits
Oxford Metrics reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 23.1% in FY2016, 28.4% in FY2015, 14.7% in FY2014, 6.0% in FY2013, 15.7% in FY2012
- Oxford Metrics has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's in pair with industry average of 2.0%.
- CAPEX is quite volatile: 0.26 in FY2016, 0.41 in FY2015, 0.72 in FY2014, 0.96 in FY2013, 0.73 in FY2012
- The company has highly profitable business model: ROIC is at 16.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Oxford Metrics ($OMG) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 29.504 | 29.456 | 25.631 | 25.733 | 29.492 | 14.6% |
| Gross Profit | 17.707 | 17.184 | 15.927 | 16.288 | 19.427 | 19.3% |
| SG&A | | | 11.996 | 9.316 | 11.163 | 19.8% |
| EBITDA | 4.643 | 1.757 | 3.774 | 7.319 | 6.808 | -7.0% |
| Net Income | 1.057 | -0.152 | -0.570 | 8.042 | 2.271 | -71.8% |
Balance Sheet
|
|---|
| Cash | 4.341 | 7.803 | 7.579 | 11.738 | 8.273 | -29.5% |
| Short Term Debt | 0.136 | 0.111 | 0.051 | 0.000 | 0.000 | |
| Long Term Debt | 2.255 | 0.051 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.535 | 0.655 | 0.712 | 0.626 | 0.526 | -16.0% |
Ratios
|
|---|
| Revenue growth | 11.9% | -0.2% | -13.0% | 0.4% | 14.6% | |
| EBITDA growth | 146.6% | -62.2% | 114.8% | 93.9% | -7.0% | |
| Gross Margin | 60.0% | 58.3% | 62.1% | 63.3% | 65.9% | 2.6% |
| EBITDA Margin | 15.7% | 6.0% | 14.7% | 28.4% | 23.1% | -5.4% |
| Net Income Margin | 3.6% | -0.5% | -2.2% | 31.3% | 7.7% | -23.6% |
| SG&A, % of revenue | | | 46.8% | 36.2% | 37.9% | 1.6% |
| CAPEX, % of revenue | 1.8% | 2.2% | 2.8% | 2.4% | 1.8% | -0.6% |
| ROIC | 14.1% | -0.1% | 0.8% | 14.6% | 16.3% | 1.7% |
| ROE | 5.4% | -0.6% | -1.9% | 26.9% | 8.1% | -18.7% |
| Net Debt/EBITDA | -0.4x | -4.3x | -2.0x | -1.6x | -1.2x | 0.4x |
Revenue and profitability
Oxford Metrics's Revenue jumped on 14.6% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 46.3 pp from -92.5% to -46.1% in FY2016.
Gross Margin increased on 2.6 pp from 63.3% to 65.9% in FY2016. SG&A as a % of Revenue increased slightly on 1.6 pp from 36.2% to 37.9% in FY2016.
Net Income marign dropped on 23.6 pp from 31.3% to 7.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.8% in FY2016. Oxford Metrics's CAPEX/Revenue showed almost no change from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 2.3%.
Return on investment
The company operates at good ROIC (16.31%) while ROE is low (8.13%). ROIC increased slightly on 1.7 pp from 14.6% to 16.3% in FY2016. ROE dropped on 18.7 pp from 26.9% to 8.1% in FY2016.
Leverage (Debt)
The company has no debt. Cash dropped on 29.5% in FY2016.
Valuation
Oxford Metrics's trades at EV/EBITDA 7.8x and P/E 27.0x while industy averages are 15.6x and 19.1x. Oxford Metrics's EV/(EBITDA-CAPEX) is 8.5x with the industry average at 19.0x.
Appendix 1: Peers in Software & Computer Services
Below we provide Oxford Metrics 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 ($PHD) | | 7.0% | 26.2% | 69.6% | 12.5% |
| Progility ($PGY) | | | | 51.0% | 3.2% |
| Galasys ($GLS) | 14.3% | 20.9% | 311.1% | 33.0% | |
| |
|---|
| Median (44 companies) | 8.4% | 6.8% | 5.2% | 4.7% | 10.3% |
|---|
| Oxford Metrics ($OMG) | | -0.2% | -13.0% | 0.4% | 14.6% |
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 ($IDOX) | 90.4% | 90.8% | 89.4% | 89.3% | |
| |
|---|
| Median (37 companies) | 63.2% | 63.0% | 58.0% | 60.2% | 69.3% |
|---|
| Oxford Metrics ($OMG) | 60.0% | 58.3% | 62.1% | 63.3% | 65.9% |
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% | 30.4% |
| Idox ($IDOX) | 30.9% | 26.1% | 26.0% | 28.6% | |
| Galasys ($GLS) | 44.0% | 83.6% | 32.6% | 28.5% | |
| Centralnic Group ($CNIC) | 38.7% | 31.1% | 24.8% | 28.3% | |
| |
|---|
| Median (44 companies) | 13.8% | 13.8% | 12.0% | 12.3% | 6.9% |
|---|
| Oxford Metrics ($OMG) | 15.7% | 6.0% | 14.7% | 28.4% | 23.1% |
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 ($CSFG) | 1.5% | 4.0% | 2.4% | 7.1% | 4.9% |
| Nasstar ($NASA) | 17.9% | | 2.1% | 5.2% | |
| Unisys Corp ($USY) | 2.1% | 2.5% | 4.1% | 5.0% | |
| |
|---|
| Median (44 companies) | 1.5% | 1.5% | 1.9% | 1.1% | 1.2% |
|---|
| Oxford Metrics ($OMG) | 1.8% | 2.2% | 2.8% | 2.4% | 1.8% |
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% | 28.9% |
| International Bus Mach Corp ($IBM) | 36.1% | 31.0% | 28.1% | 25.7% | |
| Galasys ($GLS) | 58.7% | 60.9% | 40.8% | 22.2% | |
| Instem ($INS) | 20.6% | 14.7% | 10.9% | 20.4% | |
| |
|---|
| Median (44 companies) | 12.5% | 11.6% | 9.8% | 4.3% | 9.7% |
|---|
| Oxford Metrics ($OMG) | 14.1% | -0.1% | 0.8% | 14.6% | 16.3% |
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 ($IBM) | 0.9x | 1.2x | 1.4x | 1.7x | |
| |
|---|
| Median (34 companies) | -0.5x | -0.4x | -0.3x | -0.5x | -0.9x |
|---|
| Oxford Metrics ($OMG) | -0.4x | -4.3x | -2.0x | -1.6x | -1.2x |
