Trakm8 Hldgs Net Income dropped on 56.0% in 2017 while Revenue increased on 4.3%
03 Jul 2017 • About Trakm8 Holdings (
$TRAK) • By InTwits
Trakm8 Hldgs reported FY2017 financial results today. Overall looking at the company's long term financial model we can say that:
- Trakm8 Hldgs has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's a lot of higher than industry average of 2.2%.
- CAPEX is quite volatile: 0.18 in FY2017, 0.45 in FY2016, 0.36 in FY2015, 0.30 in FY2014, 0.098 in FY2013
- The company has potentially unprofitable business model: ROIC is at 3.6%
- It operates with high leverage: Net Debt/EBITDA is 1.7x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Trakm8 Hldgs ($TRAK) key annual financial indicators
| mln. £ | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 4.750 | 9.193 | 17.853 | 25.649 | 26.759 | 4.3% |
| Gross Profit | 3.417 | 5.261 | 8.062 | 12.398 | 13.209 | 6.5% |
| SG&A | 3.378 | 4.399 | 6.301 | 7.868 | 12.462 | 58.4% |
| EBITDA | 0.324 | 1.184 | 2.498 | 4.044 | 2.319 | -42.7% |
| Net Income | 0.150 | 0.471 | 1.689 | 3.344 | 1.470 | -56.0% |
Balance Sheet
|
|---|
| Cash | 1.405 | 2.911 | 3.408 | 3.871 | 1.990 | -48.6% |
| Short Term Debt | 0.047 | 0.500 | 0.576 | 0.981 | 1.051 | 7.2% |
| Long Term Debt | 0.116 | 1.792 | 2.236 | 3.976 | 4.806 | 20.9% |
Cash flow
|
|---|
| Capex | 0.098 | 0.303 | 0.355 | 0.449 | 0.181 | -59.8% |
Ratios
|
|---|
| Revenue growth | -8.9% | 93.5% | 94.2% | 43.7% | 4.3% | |
| EBITDA growth | -12.7% | 265.8% | 111.0% | 61.9% | -42.7% | |
| Gross Margin | 71.9% | 57.2% | 45.2% | 48.3% | 49.4% | 1.0% |
| EBITDA Margin | 6.8% | 12.9% | 14.0% | 15.8% | 8.7% | -7.1% |
| Net Income Margin | 3.2% | 5.1% | 9.5% | 13.0% | 5.5% | -7.5% |
| SG&A, % of revenue | 71.1% | 47.8% | 35.3% | 30.7% | 46.6% | 15.9% |
| CAPEX, % of revenue | 2.1% | 3.3% | 2.0% | 1.8% | 0.7% | -1.1% |
| ROIC | 1.9% | 18.7% | 22.5% | 20.8% | 3.6% | -17.1% |
| ROE | 6.1% | 12.3% | 27.9% | 27.8% | 7.9% | -19.9% |
| Net Debt/EBITDA | -3.8x | -0.5x | -0.2x | 0.3x | 1.7x | 1.4x |
Revenue and profitability
The company's Revenue increased on 4.3% in FY2017. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 7.1 pp from 15.8% to 8.7% in FY2017.
Gross Margin increased slightly on 1.0 pp from 48.3% to 49.4% in FY2017. SG&A as a % of Revenue surged on 15.9 pp from 30.7% to 46.6% in FY2017.
Net Income marign decreased on 7.5 pp from 13.0% to 5.5% in FY2017.
Capital expenditures (CAPEX) and working capital investments
In FY2017 the company had CAPEX/Revenue of 0.67%. The company showed decline in CAPEX/Revenue of 2.6 pp from 3.3% in FY2014 to 0.67% in FY2017. Average CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at low ROIC (3.65%) and ROE (7.88%). ROIC dropped on 17.1 pp from 20.8% to 3.6% in FY2017. ROE dropped on 19.9 pp from 27.8% to 7.9% in FY2017.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.7x and Debt / EBITDA is 2.5x. Net Debt / EBITDA jumped on 1.4x from 0.3x to 1.7x in FY2017. Debt jumped on 18.1% in FY2017 while cash dropped on 48.6% in FY2017.
Valuation
The company's trades at EV/EBITDA 17.0x and P/E 24.1x.
Appendix 1: Peers in Technology Hardware & Equipment
Below we provide Trakm8 Hldgs benchmarking against other companies in Technology Hardware & Equipment 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Seeing Machines ($SEE) | 66.3% | 43.3% | 13.3% | 76.8% | |
| Mti Wireless Edge ($MWE) | 5.6% | 6.8% | 36.5% | 18.9% | |
| Lite-On Technology Corp ($LTTD) | -1.3% | 8.2% | -5.9% | 5.8% | |
| Cml Microsystems ($CML) | 5.3% | -1.0% | -10.6% | 4.7% | |
| Samsung Electronics Co ($SMSN) | 13.7% | -9.8% | -2.7% | 0.6% | |
| |
|---|
| Median (14 companies) | 3.4% | 0.3% | 0.2% | -2.6% | |
|---|
| Trakm8 Hldgs ($TRAK) | | 93.5% | 94.2% | 43.7% | 4.3% |
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Seeing Machines ($SEE) | 64.1% | 59.8% | 44.9% | 81.3% | |
| Cml Microsystems ($CML) | 70.3% | 73.3% | 70.9% | 71.2% | |
| Concurrent Technologies ($CNC) | 50.6% | 51.2% | 50.6% | 54.2% | |
| Samsung Electronics Co ($SMSN) | 39.8% | 37.8% | 38.5% | 40.4% | |
| Mti Wireless Edge ($MWE) | 35.7% | 35.8% | 39.4% | 36.7% | |
| |
|---|
| Median (10 companies) | 34.1% | 36.0% | 36.6% | 34.0% | |
|---|
| Trakm8 Hldgs ($TRAK) | 71.9% | 57.2% | 45.2% | 48.3% | 49.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Cml Microsystems ($CML) | 33.1% | 35.1% | 29.9% | 30.0% | |
| Concurrent Technologies ($CNC) | 23.3% | 27.1% | 28.6% | 26.2% | |
| Samsung Electronics Co ($SMSN) | 23.3% | 20.9% | 23.6% | 24.7% | |
| Mti Wireless Edge ($MWE) | 4.7% | 5.5% | 12.0% | 9.1% | |
| Lite-On Technology Corp ($LTTD) | 8.0% | 6.4% | 7.3% | 8.5% | |
| |
|---|
| Median (11 companies) | 8.0% | 5.6% | 5.3% | 6.8% | |
|---|
| Trakm8 Hldgs ($TRAK) | 6.8% | 12.9% | 14.0% | 15.8% | 8.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Samsung Electronics Co ($SMSN) | 10.1% | 10.7% | 12.9% | 12.0% | |
| Batm Advanced Communications ($BVC) | 1.5% | 1.6% | 2.5% | 4.1% | |
| Telefonaktiebolaget Lm Ericsson ($0O87) | 2.0% | 2.3% | 3.4% | 2.8% | |
| Cml Microsystems ($CML) | 0.7% | 0.4% | 1.5% | 1.9% | |
| Lite-On Technology Corp ($LTTD) | 2.9% | 3.7% | 2.4% | 1.6% | |
| |
|---|
| Median (11 companies) | 2.0% | 1.9% | 1.8% | 1.6% | |
|---|
| Trakm8 Hldgs ($TRAK) | 2.1% | 3.3% | 2.0% | 1.8% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Concurrent Technologies ($CNC) | 8.2% | 14.1% | 20.9% | 15.9% | |
| Samsung Electronics Co ($SMSN) | 24.0% | 14.4% | 14.0% | 14.3% | |
| Lite-On Technology Corp ($LTTD) | 8.2% | 5.7% | 7.0% | 10.6% | |
| Cml Microsystems ($CML) | 26.1% | 23.0% | 10.3% | 10.1% | |
| Mti Wireless Edge ($MWE) | 1.0% | 1.7% | 8.7% | 7.0% | |
| |
|---|
| Median (16 companies) | 6.0% | 5.7% | 3.4% | 3.9% | |
|---|
| Trakm8 Hldgs ($TRAK) | 1.9% | 18.7% | 22.5% | 20.8% | 3.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Telefonaktiebolaget Lm Ericsson ($0O87) | 0.0x | -0.2x | 0.1x | 0.1x | |
| Samsung Electronics Co ($SMSN) | -0.1x | -0.1x | -0.2x | -0.3x | |
| Global Invacom Group Ltd ($GINV) | -1.4x | -2.8x | -1.4x | -0.9x | |
| Mti Wireless Edge ($MWE) | 1.9x | -1.6x | 0.2x | -0.9x | |
| Concurrent Technologies ($CNC) | -0.8x | -1.6x | -1.0x | -1.6x | |
| |
|---|
| Median (8 companies) | -0.5x | -1.4x | -1.4x | -1.2x | |
|---|
| Trakm8 Hldgs ($TRAK) | -3.8x | -0.5x | -0.2x | 0.3x | 1.7x |
