Eservglobal revenue decline continued to 16.6% in FY2016 vs. 17.3% a year earliner
20 Dec 2016 • About Eservglobal (
$ESG) • By InTwits
Eservglobal reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Eservglobal is a company in decline: FY2016 revenue growth was -16.6%, 5 years revenue CAGR was -12.8%
- The company operates at negative EBITDA Margin: -46.1%
- Eservglobal motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -9.0% for the sames years0
- Eservglobal has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has unprofitable business model: ROIC is at -24.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Eservglobal ($ESG) key annual financial indicators
| mln. AUD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 28.070 | 31.003 | 31.261 | 25.866 | 21.577 | -16.6% |
| Gross Profit | 15.803 | 19.214 | 17.902 | 5.258 | 6.087 | 15.8% |
| SG&A | 22.559 | 17.297 | 16.118 | 25.530 | 13.876 | -45.6% |
| EBITDA | -9.045 | -0.800 | 31.317 | -23.925 | -9.957 | -58.4% |
| Net Income | -15.715 | 10.248 | 14.102 | -32.540 | -21.938 | -32.6% |
Balance Sheet
|
|---|
| Cash | 3.794 | 4.909 | 3.679 | 4.976 | 9.375 | 88.4% |
| Short Term Debt | 1.200 | 3.000 | 3.000 | 3.000 | 0.000 | -100.0% |
| Long Term Debt | 6.000 | 0.000 | 0.000 | 16.531 | 11.759 | -28.9% |
Cash flow
|
|---|
| Capex | 0.140 | 0.111 | 0.076 | 0.163 | 0.035 | -78.5% |
Ratios
|
|---|
| Revenue growth | -34.4% | 10.4% | 0.8% | -17.3% | -16.6% | |
| EBITDA growth | -118.8% | -91.2% | -4,014.6% | -176.4% | -58.4% | |
| Gross Margin | 56.3% | 62.0% | 57.3% | 20.3% | 28.2% | 7.9% |
| EBITDA Margin | -32.2% | -2.6% | 100.2% | -92.5% | -46.1% | 46.3% |
| Net Income Margin | -56.0% | 33.1% | 45.1% | -125.8% | -101.7% | 24.1% |
| SG&A, % of revenue | 80.4% | 55.8% | 51.6% | 98.7% | 64.3% | -34.4% |
| CAPEX, % of revenue | 0.5% | 0.4% | 0.2% | 0.6% | 0.2% | -0.5% |
| ROIC | -24.8% | -13.0% | 67.9% | -44.5% | -24.5% | 20.0% |
| ROE | -28.6% | 39.3% | 30.6% | -74.4% | -66.3% | 8.1% |
| Net Debt/EBITDA | | | -0.0x | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 16.6% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 46.3 pp from -92.5% to -46.1% in FY2016.
Gross Margin increased on 7.9 pp from 20.3% to 28.2% in FY2016. SG&A as a % of Revenue dropped on 34.4 pp from 98.7% to 64.3% in FY2016.
Net Income marign surged on 24.1 pp from -126% to -102% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.16% in FY2016. Eservglobal showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 0.35%.
Return on investment
The company operates at negative ROIC (-24.51%) and ROE (-66.30%). ROIC jumped on 20.0 pp from -44.5% to -24.5% in FY2016. ROE increased on 8.1 pp from -74.4% to -66.3% in FY2016.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt dropped on 39.8% in FY2016 while cash surged on 88.4% in FY2016.
Appendix 1: Peers in Software & Computer Services
Below we provide Eservglobal 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 ($GLS) | 14.3% | 20.9% | 311.1% | 33.0% | |
| |
|---|
| Median (44 companies) | 8.4% | 6.1% | 5.2% | 4.7% | 11.1% |
|---|
| Eservglobal ($ESG) | | 10.4% | 0.8% | -17.3% | -16.6% |
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 ($IDOX) | 90.4% | 90.8% | 89.4% | 89.3% | 86.8% |
| |
|---|
| Median (37 companies) | 63.2% | 63.0% | 58.9% | 60.3% | 72.6% |
|---|
| Eservglobal ($ESG) | 56.3% | 62.0% | 57.3% | 20.3% | 28.2% |
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 ($IDOX) | 30.9% | 26.1% | 26.0% | 28.6% | 27.3% |
| Galasys ($GLS) | 44.0% | 83.6% | 32.6% | 28.5% | |
| Oxford Metrics ($OMG) | 15.7% | 6.0% | 14.7% | 28.4% | 23.1% |
| |
|---|
| Median (44 companies) | 14.3% | 13.8% | 12.0% | 12.6% | 9.6% |
|---|
| Eservglobal ($ESG) | -32.2% | -2.6% | 100.2% | -92.5% | -46.1% |
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 ($USY) | 2.1% | 2.5% | 4.1% | 5.0% | |
| |
|---|
| Median (44 companies) | 1.5% | 1.6% | 1.9% | 1.4% | 1.2% |
|---|
| Eservglobal ($ESG) | 0.5% | 0.4% | 0.2% | 0.6% | 0.2% |
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 ($INS) | 20.6% | 14.7% | 10.9% | 20.4% | |
| |
|---|
| Median (44 companies) | 13.5% | 11.6% | 9.4% | 6.2% | 9.8% |
|---|
| Eservglobal ($ESG) | -24.8% | -13.0% | 67.9% | -44.5% | -24.5% |
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 (35 companies) | -0.4x | -0.4x | -0.3x | -0.5x | -0.9x |
|---|
