Synectics reports 20.9% EBITDA growth and 3.5% Revenue growth
21 Feb 2017 • About Synectics (
$SNX) • By InTwits
Synectics reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 5.7% in FY2016, 4.9% in FY2015, -1.4% in FY2014, 10.2% in FY2013, 8.9% in FY2012
- Synectics has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 3.2%.
- CAPEX is quite volatile: 0.35 in FY2016, 0.35 in FY2015, 2.0 in FY2014, 1.6 in FY2013, 0.53 in FY2012
- The company has potentially unprofitable business model: ROIC is at 5.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Synectics ($SNX) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 77.039 | 82.363 | 64.594 | 68.504 | 70.913 | 3.5% |
| Gross Profit | 26.588 | 26.699 | 18.887 | 21.341 | 23.899 | 12.0% |
| SG&A | | | | 20.666 | | -100.0% |
| EBITDA | 6.820 | 8.404 | -0.922 | 3.366 | 4.071 | 20.9% |
| Net Income | 3.367 | 4.917 | -3.358 | 0.406 | 1.471 | 262.3% |
Balance Sheet
|
|---|
| Cash | 6.491 | 5.774 | 1.349 | 3.338 | 5.848 | 75.2% |
| Short Term Debt | 0.000 | 0.000 | 4.553 | 0.857 | 2.778 | 224.2% |
| Long Term Debt | 1.850 | 4.575 | 2.872 | 1.932 | 0.900 | -53.4% |
Cash flow
|
|---|
| Capex | 0.530 | 1.570 | 2.021 | 0.346 | 0.350 | 1.2% |
Ratios
|
|---|
| Revenue growth | 11.5% | 6.9% | -21.6% | 6.1% | 3.5% | |
| EBITDA growth | 76.2% | 23.2% | -111.0% | -465.1% | 20.9% | |
| Gross Margin | 34.5% | 32.4% | 29.2% | 31.2% | 33.7% | 2.5% |
| EBITDA Margin | 8.9% | 10.2% | -1.4% | 4.9% | 5.7% | 0.8% |
| Net Income Margin | 4.4% | 6.0% | -5.2% | 0.6% | 2.1% | 1.5% |
| SG&A, % of revenue | | | | 30.2% | | -30.2% |
| CAPEX, % of revenue | 0.7% | 1.9% | 3.1% | 0.5% | 0.5% | -0.0% |
| ROIC | 15.9% | 17.5% | -5.5% | 3.5% | 5.0% | 1.5% |
| ROE | 10.0% | 13.2% | -8.8% | 1.1% | 3.8% | 2.7% |
| Net Debt/EBITDA | -0.7x | -0.1x | | -0.2x | -0.5x | -0.4x |
Revenue and profitability
The company's Revenue increased on 3.5% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.1 pp from -3.9% to 2.2% in 2016.
Gross Margin increased on 2.5 pp from 31.2% to 33.7% in FY2016.
Net Income marign increased slightly on 1.5 pp from 0.59% to 2.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.49% in FY2016. The company's CAPEX/Revenue decreased slightly on 1.4 pp from 1.9% in FY2013 to 0.49% in FY2016. It's average level of CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at low ROIC (5.02%) and ROE (3.85%). ROIC increased slightly on 1.5 pp from 3.5% to 5.0% in FY2016. ROE increased on 2.7 pp from 1.1% to 3.8% in FY2016.
Leverage (Debt)
Debt level is -0.5x Net Debt / EBITDA and 0.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from -0.2x to -0.5x in FY2016. Debt surged on 31.9% in FY2016 while cash jumped on 75.2% in FY2016.
Appendix 1: Peers in Support Services
Below you can find Synectics 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 ($IBEX) | | 35.7% | 30.0% | 29.8% | 7.0% |
| |
|---|
| Median (55 companies) | -0.9% | 8.0% | 5.0% | 6.9% | 2.1% |
|---|
| Synectics ($SNX) | | 6.9% | -21.6% | 6.1% | 3.5% |
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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (49 companies) | 28.2% | 28.5% | 30.4% | 28.4% | 27.0% |
|---|
| Synectics ($SNX) | 34.5% | 32.4% | 29.2% | 31.2% | 33.7% |
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) | 6.7% | 6.3% | 6.9% | 7.6% | 7.3% |
|---|
| Synectics ($SNX) | 8.9% | 10.2% | -1.4% | 4.9% | 5.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($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% | 1.0% | 1.1% | 1.0% |
|---|
| Synectics ($SNX) | 0.7% | 1.9% | 3.1% | 0.5% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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 ($SVCA) | 1.0% | 7.8% | 14.9% | 22.3% | 22.8% |
| Rtc Group ($RTC) | 14.6% | 17.6% | 19.9% | 22.2% | |
| |
|---|
| Median (55 companies) | 9.5% | 7.8% | 9.4% | 10.4% | 10.3% |
|---|
| Synectics ($SNX) | 15.9% | 17.5% | -5.5% | 3.5% | 5.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($RHL) | 22.8x | 5.8x | 6.6x | 16.8x | 16.2x |
| 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 | 0.5x |
|---|
| Synectics ($SNX) | -0.7x | -0.1x | | -0.2x | -0.5x |
