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Instem reports 347% Net Income growth and 12.2% Revenue growth

28 Mar 2017 • About Instem ($INS) • By InTwits

Instem reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts: It operates with high leverage: Net Debt/EBITDA is 3.9x while industry average is -0.1x.

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Instem ($INS) key annual financial indicators

mln. £201220132014201520162016/2015
P&L
Revenue10.66111.36113.42916.32118.31912.2%
EBITDA1.5761.4761.7492.505-100.0%
Net Income1.0440.5290.150-0.4281.058-347.2%
Balance Sheet
Cash2.4502.0531.6762.183-100.0%
Short Term Debt0.2501.2501.9030.385-100.0%
Long Term Debt0.0000.0000.0000.000
Cash flow
Capex0.1580.1710.1240.113-100.0%
Ratios
Revenue growth-1.2%6.6%18.2%21.5%12.2%
EBITDA growth-19.4%-6.3%18.5%43.2%
EBITDA Margin14.8%13.0%13.0%15.3%0.0%-15.3%
Net Income Margin9.8%4.7%1.1%-2.6%5.8%8.4%
CAPEX, % of revenue1.5%1.5%0.9%0.7%-0.7%
ROIC20.6%14.7%10.9%20.4%-20.4%
ROE20.1%10.6%2.9%-7.1%7.1%
Net Debt/EBITDA-1.4x-0.5x0.1x-0.7x0.7x

Revenue and profitability


Instem's Revenue jumped on 12.2% in FY2016.

Net Income marign increased on 8.4 pp from -2.6% to 5.8% in FY2016.


Appendix 1: Peers in Software & Computer Services


Below we provide Instem 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 (45 companies)12.5%5.7%4.4%3.1%10.5%
Instem ($INS)6.6%18.2%21.5%12.2%


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%13.2%11.1%12.3%11.0%
Instem ($INS)14.8%13.0%13.0%15.3%


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%3.0%
 
Median (45 companies)1.5%1.5%1.9%1.3%1.3%
Instem ($INS)1.5%1.5%0.9%0.7%


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%9.7%
Instem ($INS)20.6%14.7%10.9%20.4%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Progility ($PGY)2.0x1.8x12.8x6.8x
Parity Group ($PTY)4.7x4.9x5.1x
Nasstar ($NASA)-5.3x0.0x1.9x
Phoenix It Group ($PNX)4.3x1.9x
International Bus Mach Corp ($IBM)0.9x1.2x1.4x1.7x2.2x
 
Median (35 companies)-0.4x-0.4x-0.4x-0.5x-0.8x
Instem ($INS)-1.4x-0.5x0.1x-0.7x