Idox Net Income jumped on 50.8% in 2016 while EBITDA Margin decreased slightly on 1.3 pp from 28.6% to 27.3%
14 Dec 2016 • About Idox (
$IDOX) • By InTwits
Idox reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Idox is a growth stock: FY2016 revenue growth was 22.6%, 5 year revenue CAGR was 14.7% at FY2016 ROIC 15.8%
- Idox has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 2.0%.
- CAPEX is quite volatile: 0.50 in FY2016, 0.67 in FY2015, 0.61 in FY2014, 0.29 in FY2013, 0.31 in FY2012
- The company has highly profitable business model: ROIC is at 15.8%
- It operates with high leverage: Net Debt/EBITDA is 1.2x while industry average is 0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Idox ($IDOX) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 55.382 | 57.319 | 60.677 | 62.575 | 76.739 | 22.6% |
| Gross Profit | 50.047 | 52.021 | 54.264 | 55.891 | 66.601 | 19.2% |
| SG&A | 33.430 | 36.967 | 45.774 | 45.347 | 52.316 | 15.4% |
| EBITDA | 17.130 | 14.978 | 15.769 | 17.868 | 20.921 | 17.1% |
| Net Income | 6.705 | 7.523 | 5.843 | 7.829 | 11.806 | 50.8% |
Balance Sheet
|
|---|
| Cash | 3.640 | 3.399 | 5.855 | 4.084 | 3.787 | -7.3% |
| Short Term Debt | 2.300 | 3.732 | 7.397 | 2.428 | 2.425 | -0.1% |
| Long Term Debt | 22.879 | 19.462 | 14.293 | 24.831 | 26.410 | 6.4% |
Cash flow
|
|---|
| Capex | 0.523 | 0.774 | 0.909 | 0.559 | 0.639 | 14.3% |
Ratios
|
|---|
| Revenue growth | 43.5% | 3.5% | 5.9% | 3.1% | 22.6% | |
| EBITDA growth | 67.7% | -12.6% | 5.3% | 13.3% | 17.1% | |
| Gross Margin | 90.4% | 90.8% | 89.4% | 89.3% | 86.8% | -2.5% |
| EBITDA Margin | 30.9% | 26.1% | 26.0% | 28.6% | 27.3% | -1.3% |
| Net Income Margin | 12.1% | 13.1% | 9.6% | 12.5% | 15.4% | 2.9% |
| SG&A, % of revenue | 60.4% | 64.5% | 75.4% | 72.5% | 68.2% | -4.3% |
| CAPEX, % of revenue | 0.9% | 1.4% | 1.5% | 0.9% | 0.8% | -0.1% |
| ROIC | 21.6% | 12.6% | 12.5% | 14.8% | 15.8% | 1.0% |
| ROE | 18.3% | 18.0% | 12.5% | 15.3% | 19.9% | 4.5% |
| Net Debt/EBITDA | 1.3x | 1.3x | 1.0x | 1.3x | 1.2x | -0.1x |
Revenue and profitability
The company's Revenue jumped on 22.6% in FY2016. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.3 pp from 28.6% to 27.3% in FY2016.
Gross Margin decreased on 2.5 pp from 89.3% to 86.8% in FY2016. SG&A as a % of Revenue decreased on 4.3 pp from 72.5% to 68.2% in FY2016.
Net Income marign increased on 2.9 pp from 12.5% to 15.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Idox had CAPEX/Revenue of 0.83%. Idox's CAPEX/Revenue decreased slightly on 0.52 pp from 1.4% in FY2013 to 0.83% in FY2016. Average CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at good ROIC (15.80%) and ROE (19.86%). ROIC increased slightly on 1.0 pp from 14.8% to 15.8% in FY2016. ROE increased on 4.5 pp from 15.3% to 19.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.2x and Debt / EBITDA is 1.4x. Net Debt / EBITDA decreased on 0.1x from 1.3x to 1.2x in FY2016. Debt increased on 5.8% in FY2016 while cash decreased on 7.3% in FY2016.
Valuation
The company's trades at EV/EBITDA 14.3x and P/E 23.3x while industy averages are 15.6x and 19.1x. Idox's EV/(EBITDA-CAPEX) is 14.8x with the industry average at 19.0x.
Appendix 1: Peers in Software & Computer Services
Below we provide Idox 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 ($GLS) | 14.3% | 20.9% | 311.1% | 33.0% | |
| |
|---|
| Median (44 companies) | 7.8% | 6.8% | 4.5% | 4.7% | 10.7% |
|---|
| Idox ($IDOX) | | 3.5% | 5.9% | 3.1% | 22.6% |
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% |
| Dotdigital Group ($DOTD) | 94.0% | 92.7% | 90.5% | 89.3% | 87.4% |
| |
|---|
| Median (37 companies) | 62.7% | 62.0% | 58.0% | 60.2% | 65.9% |
|---|
| Idox ($IDOX) | 90.4% | 90.8% | 89.4% | 89.3% | 86.8% |
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% |
| Galasys ($GLS) | 44.0% | 83.6% | 32.6% | 28.5% | |
| Oxford Metrics ($OMG) | 15.7% | 6.0% | 14.7% | 28.4% | 23.1% |
| Centralnic Group ($CNIC) | 38.7% | 31.1% | 24.8% | 28.3% | |
| |
|---|
| Median (44 companies) | 13.8% | 13.0% | 12.0% | 12.3% | 8.2% |
|---|
| Idox ($IDOX) | 30.9% | 26.1% | 26.0% | 28.6% | 27.3% |
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 ($USY) | 2.1% | 2.5% | 4.1% | 5.0% | |
| |
|---|
| Median (44 companies) | 1.5% | 1.6% | 1.9% | 1.4% | 1.2% |
|---|
| Idox ($IDOX) | 0.9% | 1.4% | 1.5% | 0.9% | 0.8% |
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 ($INS) | 20.6% | 14.7% | 10.9% | 20.4% | |
| |
|---|
| Median (44 companies) | 12.5% | 11.5% | 9.4% | 4.3% | 9.8% |
|---|
| Idox ($IDOX) | 21.6% | 12.6% | 12.5% | 14.8% | 15.8% |
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 ($IBM) | 0.9x | 1.2x | 1.4x | 1.7x | |
| |
|---|
| Median (34 companies) | -0.5x | -0.5x | -0.3x | -0.6x | -1.0x |
|---|
| Idox ($IDOX) | 1.3x | 1.3x | 1.0x | 1.3x | 1.2x |
