Apc Technology Group revenue dropped on 21.2% in 2016 and EBITDA Margin dropped on 13.1 pp from -1.8% to -14.8%

14 Dec 2016 • About Apc Technology Group ($APC) • By InTwits

Apc Technology Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Apc Technology Group doesn't have a profitable business model yet: FY2016 ROIC is -22.3%
The company operates at negative EBITDA Margin: -14.8%
Apc Technology Group motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -1.7% for the sames years0
Apc Technology Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
The company has unprofitable business model: ROIC is at -22.3%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Apc Technology Group ($APC) key annual financial indicators

mln. £	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	13.644	21.657	20.634	22.786	17.961	-21.2%
Gross Profit	4.023	6.557	7.558	5.247	5.702	8.7%
SG&A			6.957	8.373	8.406	0.4%
EBITDA	0.228	0.599	0.636	-0.400	-2.660	565.0%
Net Income	0.013	4.065	0.554	-5.747	-12.875	124.0%
Balance Sheet
Cash	0.016	1.182	0.552	1.239	0.444	-64.2%
Short Term Debt	0.805	0.134	0.754	2.565	3.027	18.0%
Long Term Debt	0.239	0.000	0.102	0.660	0.578	-12.4%
Cash flow
Capex	0.029	0.113	0.202	0.072	0.023	-68.1%
Ratios
Revenue growth	-5.4%	58.7%	-4.7%	10.4%	-21.2%
EBITDA growth	-61.9%	162.7%	6.2%	-162.9%	565.0%
Gross Margin	29.5%	30.3%	36.6%	23.0%	31.7%	8.7%
EBITDA Margin	1.7%	2.8%	3.1%	-1.8%	-14.8%	-13.1%
Net Income Margin	0.1%	18.8%	2.7%	-25.2%	-71.7%	-46.5%
SG&A, % of revenue			33.7%	36.7%	46.8%	10.1%
CAPEX, % of revenue	0.2%	0.5%	1.0%	0.3%	0.1%	-0.2%
ROIC	3.5%	6.7%	4.7%	-8.6%	-22.3%	-13.6%
ROE	0.4%	57.8%	5.0%	-45.3%	-148.7%	-103.4%
Net Debt/EBITDA	4.5x	-1.7x	0.5x			0.0x

Revenue and profitability

The company's Revenue dropped on 21.2% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 13.1 pp from -1.8% to -14.8% in FY2016.

Gross Margin increased on 8.7 pp from 23.0% to 31.7% in FY2016. SG&A as a % of Revenue surged on 10.1 pp from 36.7% to 46.8% in FY2016.

Net Income marign dropped on 46.5 pp from -25.2% to -71.7% in FY2016.

Capital expenditures (CAPEX) and working capital investments

The company's CAPEX/Revenue was 0.13% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 0.47%.

Return on investment

The company operates at negative ROIC (-22.26%) and ROE (-148.71%). ROIC dropped on 13.6 pp from -8.6% to -22.3% in FY2016. ROE dropped on 103 pp from -45.3% to -149% in FY2016.

Leverage (Debt)

Company's Net Debt / EBITDA is -1.8x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt jumped on 11.8% in FY2016 while cash dropped on 64.2% in FY2016.

Appendix 1: Peers in Electronic & Electrical Equipment

Below we provide Apc Technology Group benchmarking against other companies in Electronic & Electrical Equipment 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
Stadium Group ($SDM)	-8.8%	3.0%	-1.1%	29.0%
Flowgroup ($FLOW)	-92.9%	125,263.6%	141.9%	21.1%
Solid State ($SSP)		21.7%	1.9%	13.9%	20.6%
Zytronic ($ZYT)		-15.4%	9.3%	12.6%	-0.8%
Volex ($VLX)		-8.6%	-15.4%	5.8%	-13.2%
Median (13 companies)	-12.9%	-5.6%	-1.1%	-1.4%	-0.8%
Apc Technology Group ($APC)		58.7%	-4.7%	10.4%	-21.2%

Top companies by Gross margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Zytronic ($ZYT)	36.3%	30.8%	36.6%	41.9%	42.8%
Elektron Technology ($EKT)	40.6%	37.5%	34.8%	35.6%	37.2%
Solid State ($SSP)	27.8%	26.1%	29.2%	30.5%	31.8%
Maruwa Co Ltd ($MAW)	31.6%	28.6%	32.8%	30.0%	35.9%
Lpa Group ($LPA)	28.3%	27.2%	29.6%	27.4%
Median (11 companies)	27.3%	26.1%	24.1%	25.0%	35.9%
Apc Technology Group ($APC)	29.5%	30.3%	36.6%	23.0%	31.7%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Zytronic ($ZYT)	25.3%	18.8%	22.9%	27.8%	25.6%
Maruwa Co Ltd ($MAW)	22.3%	17.7%	17.8%	14.7%	19.6%
Dewhurst ($DWHA)	12.9%	12.6%	13.7%	14.7%	13.4%
Morgan Advanced Materials ($BA29)	13.7%	13.1%	9.8%	12.8%	14.6%
Stadium Group ($SDM)	6.1%	7.1%	9.9%	12.1%
Median (13 companies)	6.7%	5.4%	5.7%	7.2%	13.4%
Apc Technology Group ($APC)	1.7%	2.8%	3.1%	-1.8%	-14.8%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Morgan Advanced Materials ($BA29)	2.9%	3.8%	3.7%	7.0%	4.0%
Maruwa Co Ltd ($MAW)	23.8%	15.3%	7.6%	6.5%	4.4%
Zytronic ($ZYT)	3.6%	2.8%	1.4%	4.7%	1.8%
Stadium Group ($SDM)	1.0%	0.8%	0.5%	2.7%
Dewhurst ($DWHA)	2.7%	1.3%	0.9%	1.9%	1.9%
Median (13 companies)	3.0%	2.7%	1.4%	1.4%	1.9%
Apc Technology Group ($APC)	0.2%	0.5%	1.0%	0.3%	0.1%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Dewhurst ($DWHA)	29.2%	20.7%	24.5%	27.3%	24.6%
Zytronic ($ZYT)	23.0%	11.9%	17.0%	22.7%	18.1%
Solid State ($SSP)	22.3%	19.7%	44.5%	20.0%	23.0%
Stadium Group ($SDM)	16.5%	17.6%	17.3%	19.3%
Morgan Advanced Materials ($BA29)	17.9%	16.3%	10.9%	18.4%	21.9%
Median (13 companies)	16.5%	6.8%	7.0%	7.8%	18.1%
Apc Technology Group ($APC)	3.5%	6.7%	4.7%	-8.6%	-22.3%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Walsin Lihwa Corp ($WALS)	5.3x	8.7x	3.9x	4.6x
Lpa Group ($LPA)	1.9x	0.7x	1.5x	3.8x
Morgan Advanced Materials ($BA29)	1.4x	1.5x	2.3x	1.8x	1.7x
Elektron Technology ($EKT)	0.7x	1.7x	3.8x	0.8x	0.5x
Solid State ($SSP)	1.4x	1.2x	0.4x	0.7x	0.7x
Median (10 companies)	0.3x	0.9x	1.4x	0.5x	0.3x

Apc Technology Group stock price chart

Apc Technology Group financials

mln.	FY2010	FY2011	FY2012

Revenue	13.410	14.419	13.644
EBITDA	0.538	0.599	0.228
Net income	0.179	0.302	0.013
CAPEX	0.015	0.063	0.029
Debt	2.426	1.292	1.044
Cash	0.167	0.049	0.016

About Apc Technology Group

APC Technology Group PLC, together with its subsidiaries, supplies and distributes specialist electronic components to defense, aerospace, space, transportation, medical, and industrial sectors. The company distributes RF and microwave products, including active devices, amplifiers, cable assemblies and connectors, capacitors and resistors, filters, frequency sources, passive devices, semiconductors, and switches; and specialist electronic components comprising power supplies, avionics data bus, semiconductors and opto electronics, high voltage and temperature products, and passive components, as well as oil and gas, space, and power control products. It also offers various keyboard and data entry solutions comprising medigenic infection control; logic keyboard editing; iCart, Codonics, printers, and barcode scanners; Barco-Barco Eonis displays; industrial and secure log-on keyboards; broadcast keyboards/switches and controllers; application specific keyboards and keysets; and displays, tablets, and medical PCs. In addition, the company provides sensors, communication, data loggers, ultra capacitors, data entry, LEDs, embedded computing, display, and digital signage products; and GPS synchronized NTP network time servers, time and frequency systems, time and frequency generation equipment, PCI/PEX products, and time code distribution equipment. Further, it offers technologies to reduce energy consumption and associated carbon emissions; and various solutions for obsolete and allocated electronic components. The company distributes its products primarily in the United Kingdom, North America, Europe, the Far East, and others. APC Technology Group plc was incorporated in 1982 and is headquartered in Rochester, the United Kingdom.