Optimal Payments reports 1,818% Net Income growth and 6.0 pp EBITDA Margin growth from 22.6% to 28.6%
07 Mar 2017 • About Optimal Payments (
$OPAY) • By InTwits
Optimal Payments reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Optimal Payments is a growth stock: FY2016 revenue growth was 63.1%, 5 year revenue CAGR was 50.9% at FY2016 ROIC 11.9%
- EBITDA Margin is expanding: 28.6% in FY2016 vs. 22.6% in FY2015 vs. 10.3% in FY2012
- Optimal Payments has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's in pair with industry average of 2.7%.
- CAPEX is quite volatile: 12.9 in FY2016, 5.7 in FY2015, 3.3 in FY2014, 13.6 in FY2013, 6.5 in FY2012
- The company has business model with average profitability: ROIC is at 11.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.7x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Optimal Payments ($OPAY) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 179 | 253 | 365 | 613 | 1,000 | 63.1% |
| Gross Profit | 90 | 132 | 178 | 296 | 543 | 83.1% |
| SG&A | | 8 | 45 | 68 | 111 | 62.0% |
| EBITDA | 19 | 47 | 78 | 139 | 286 | 106.2% |
| Net Income | 1 | 31 | 58 | 7 | 142 | 1,818.4% |
Balance Sheet
|
|---|
| Cash | 82 | 164 | 119 | 132 | 267 | 101.8% |
| Short Term Debt | 0 | 10 | 21 | 31 | 30 | -3.9% |
| Long Term Debt | 9 | 1 | 107 | 493 | 451 | -8.5% |
Cash flow
|
|---|
| Capex | 6 | 14 | 3 | 6 | 13 | 126.8% |
Ratios
|
|---|
| Revenue growth | 39.9% | 41.5% | 44.0% | 68.1% | 63.1% | |
| EBITDA growth | 29.5% | 152.8% | 66.4% | 77.9% | 106.2% | |
| Gross Margin | 50.1% | 52.1% | 48.7% | 48.3% | 54.3% | 5.9% |
| EBITDA Margin | 10.3% | 18.5% | 21.3% | 22.6% | 28.6% | 6.0% |
| Net Income Margin | 0.7% | 12.4% | 15.8% | 1.2% | 14.2% | 13.0% |
| SG&A, % of revenue | | 3.1% | 12.4% | 11.1% | 11.0% | -0.1% |
| CAPEX, % of revenue | 3.6% | 5.4% | 0.9% | 0.9% | 1.3% | 0.4% |
| ROIC | 7.1% | 27.7% | 23.8% | 8.8% | 11.9% | 3.1% |
| ROE | 1.5% | 29.1% | 33.9% | 1.2% | 12.4% | 11.2% |
| Net Debt/EBITDA | -3.9x | -3.3x | 0.1x | 2.8x | 0.7x | -2.1x |
Revenue and profitability
Optimal Payments's Revenue jumped on 63.1% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 17.6 pp from -4.9% to 12.7% in FY2016.
Gross Margin increased on 5.9 pp from 48.3% to 54.3% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign surged on 13.0 pp from 1.2% to 14.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Optimal Payments's CAPEX/Revenue was 1.3% in FY2016. CAPEX/Revenue decreased on 4.1 pp from 5.4% in FY2013 to 1.3% in FY2016. It's average CAPEX/Revenue for the last three years was 1.0%.
Return on investment
The company operates at good ROE (12.39%) while ROIC is low (11.92%). ROIC increased on 3.1 pp from 8.8% to 11.9% in FY2016. ROE surged on 11.2 pp from 1.2% to 12.4% in FY2016.
Leverage (Debt)
Debt level is 0.7x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA dropped on 2.1x from 2.8x to 0.7x in FY2016. Debt decreased on 8.3% in FY2016 while cash jumped on 102% in FY2016.
Valuation
The company's trades at EV/EBITDA 0.8x and P/E 0.2x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 0.9x with the industry average at 19.0x.
Appendix 1: Peers in Support Services
Below you can find Optimal Payments 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 ($CCE) | | 88.0% | -54.7% | 99.4% | |
| Inspired Energy ($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% |
| Rtc Group ($RTC) | | 13.6% | 4.3% | 27.4% | 4.6% |
| |
|---|
| Median (55 companies) | -0.9% | 6.9% | 4.7% | 6.6% | 3.9% |
|---|
| Optimal Payments ($OPAY) | | 41.5% | 44.0% | 68.1% | 63.1% |
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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (49 companies) | 28.2% | 28.5% | 29.2% | 28.4% | 27.0% |
|---|
| Optimal Payments ($OPAY) | 50.1% | 52.1% | 48.7% | 48.3% | 54.3% |
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% | 6.8% | 6.9% | 7.1% |
|---|
| Optimal Payments ($OPAY) | 10.3% | 18.5% | 21.3% | 22.6% | 28.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($VP.) | 21.4% | 17.7% | 21.6% | 25.7% | 24.1% |
| Sagentia Group ($SAG) | 1.9% | 1.4% | 1.5% | 25.2% | 6.6% |
| Nature Group ($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) | 1.0% | 1.1% | 1.1% | 1.1% | 1.0% |
|---|
| Optimal Payments ($OPAY) | 3.6% | 5.4% | 0.9% | 0.9% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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% | 15.4% |
| |
|---|
| Median (55 companies) | 9.9% | 7.8% | 9.3% | 10.4% | 10.3% |
|---|
| Optimal Payments ($OPAY) | 7.1% | 27.7% | 23.8% | 8.8% | 11.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($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 |
|---|
| Optimal Payments ($OPAY) | -3.9x | -3.3x | 0.1x | 2.8x | 0.7x |
