Microgen Net Income jumped on 67.2% in 2016 while EBITDA Margin decreased on 4.4 pp from 26.8% to 22.4%
08 Mar 2017 • About Microgen (
$MCGN) • By InTwits
Microgen reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Microgen has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 2.0%.
- CAPEX is quite volatile: 0.056 in FY2016, 0.032 in FY2015, 1.4 in FY2014, 1.9 in FY2013, 2.2 in FY2012
- The company has highly profitable business model: ROIC is at 15.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Microgen ($MCGN) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 32.318 | 29.824 | 29.814 | 31.958 | 42.988 | 34.5% |
| EBITDA | 10.193 | 9.790 | 7.296 | 8.557 | 9.625 | 12.5% |
| Net Income | 6.949 | 6.438 | 4.113 | 3.734 | 6.243 | 67.2% |
Balance Sheet
|
|---|
| Cash | 32.134 | 40.200 | 40.896 | 18.600 | 23.849 | 28.2% |
| Short Term Debt | 0.000 | 3.000 | 3.000 | 3.000 | 3.000 | 0.0% |
| Long Term Debt | 0.000 | 16.250 | 13.250 | 10.250 | 7.250 | -29.3% |
Cash flow
|
|---|
| Capex | 0.624 | 0.427 | 0.612 | 0.524 | 0.894 | 70.6% |
Ratios
|
|---|
| Revenue growth | -16.7% | -7.7% | -0.0% | 7.2% | 34.5% | |
| EBITDA growth | -1.8% | -4.0% | -25.5% | 17.3% | 12.5% | |
| EBITDA Margin | 31.5% | 32.8% | 24.5% | 26.8% | 22.4% | -4.4% |
| Net Income Margin | 21.5% | 21.6% | 13.8% | 11.7% | 14.5% | 2.8% |
| CAPEX, % of revenue | 1.9% | 1.4% | 2.1% | 1.6% | 2.1% | 0.4% |
| ROIC | 15.2% | 13.2% | 9.0% | 12.1% | 15.4% | 3.3% |
| ROE | 11.1% | 10.8% | 7.4% | 7.9% | 15.2% | 7.4% |
| Net Debt/EBITDA | -3.2x | -2.1x | -3.4x | -0.6x | -1.4x | -0.8x |
Revenue and profitability
Microgen's Revenue jumped on 34.5% in 2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 7.2% to 8.1% in FY2016.
Net Income marign increased on 2.8 pp from 11.7% to 14.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
Microgen's CAPEX/Revenue was 2.1% in 2016. Microgen showed small growth in CAPEX/Revenue of 0.65 pp from 1.4% in 2013 to 2.1% in 2016. For the last three years the average CAPEX/Revenue was 1.9%.
Return on investment
The company operates at good ROIC (15.41%) and ROE (15.23%). ROIC increased on 3.3 pp from 12.1% to 15.4% in 2016. ROE increased on 7.4 pp from 7.9% to 15.2% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.4x and Debt / EBITDA is 1.1x. Net Debt / EBITDA dropped on 0.8x from -0.6x to -1.4x in 2016. Debt dropped on 22.6% in 2016 while cash surged on 28.2% in 2016.
Appendix 1: Peers in Software & Computer Services
Below you can find Microgen benchmarking vs. other companies in Software & Computer 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 |
|---|
| 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 ($GLS) | 14.3% | 20.9% | 311.1% | 33.0% | |
| |
|---|
| Median (45 companies) | 10.5% | 6.6% | 4.7% | 3.1% | 5.3% |
|---|
| Microgen ($MCGN) | | -7.7% | -0.0% | 7.2% | 34.5% |
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 ($WAND) | 91.8% | 80.3% | 80.7% | 93.2% | 88.1% |
| Netcall ($NET) | 88.2% | 89.7% | 91.0% | 90.9% | 91.2% |
| Idox ($IDOX) | 90.4% | 90.8% | 89.4% | 89.3% | 86.8% |
| |
|---|
| Median (39 companies) | 62.7% | 62.0% | 58.0% | 60.2% | 59.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mail.Ru Group Ltd ($61HE) | 43.1% | 47.4% | 50.5% | 34.6% | 35.2% |
| Dotdigital Group ($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 ($OMG) | 15.7% | 6.0% | 14.7% | 28.4% | 23.1% |
| |
|---|
| Median (45 companies) | 13.3% | 12.8% | 11.1% | 12.3% | 9.6% |
|---|
| Microgen ($MCGN) | 31.5% | 32.8% | 24.5% | 26.8% | 22.4% |
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 ($USY) | 2.1% | 2.5% | 4.1% | 5.0% | 3.0% |
| |
|---|
| Median (45 companies) | 1.5% | 1.6% | 1.9% | 1.0% | 1.2% |
|---|
| Microgen ($MCGN) | 1.9% | 1.4% | 2.1% | 1.6% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Rm ($RM.) | | 48.6% | 130.8% | 289.2% | 263.8% |
| Triad Group ($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% | 18.7% |
| Galasys ($GLS) | 58.7% | 60.9% | 40.8% | 22.2% | |
| |
|---|
| Median (45 companies) | 12.5% | 11.6% | 9.8% | 5.3% | 8.4% |
|---|
| Microgen ($MCGN) | 15.2% | 13.2% | 9.0% | 12.1% | 15.4% |
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 ($IBM) | 0.9x | 1.2x | 1.4x | 1.7x | 2.2x |
| |
|---|
| Median (35 companies) | -0.4x | -0.4x | -0.3x | -0.5x | -0.8x |
|---|
| Microgen ($MCGN) | -3.2x | -2.1x | -3.4x | -0.6x | -1.4x |
