Proactis Holdings Net Income dropped on 212% in 2017 while Revenue jumped on 31.1%
11 Oct 2017 • About Proactis Holdings (
$PHD) • By InTwits
Proactis Holdings reported FY2017 financial results today. Overall looking at the company's long term financial model we can say that:
- Proactis Holdings doesn't have a profitable business model yet: FY2017 ROIC is -11.0%
- EBITDA Margin is quite volatile: 3.7% in FY2017, 23.7% in FY2016, 26.4% in FY2015, 22.8% in FY2014, 18.3% in FY2013
- Proactis Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- The company has unprofitable business model: ROIC is at -11.0%
- It operates with high leverage: Net Debt/EBITDA is 1.0x while industry average is -0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Proactis Holdings ($PHD) key annual financial indicators
| mln. £ | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 8.042 | 10.150 | 17.219 | 19.374 | 25.404 | 31.1% |
| Gross Profit | 5.602 | 7.475 | 13.841 | 15.973 | 21.859 | 36.8% |
| SG&A | | | 12.259 | | | |
| EBITDA | 1.472 | 2.316 | 4.543 | 4.601 | 0.930 | -79.8% |
| Net Income | 0.349 | 0.322 | 2.016 | 2.485 | -2.771 | -211.5% |
Balance Sheet
|
|---|
| Cash | 2.338 | 3.124 | 3.424 | 3.595 | 4.277 | 19.0% |
| Short Term Debt | 0.000 | 0.400 | 0.650 | 1.393 | 1.414 | 1.5% |
| Long Term Debt | 0.000 | 1.100 | 1.263 | 2.656 | 3.814 | 43.6% |
Cash flow
|
|---|
| Capex | 0.022 | 0.057 | 0.229 | 0.169 | 0.082 | -51.5% |
Ratios
|
|---|
| Revenue growth | 7.0% | 26.2% | 69.6% | 12.5% | 31.1% | |
| EBITDA growth | 47.5% | 57.3% | 96.2% | 1.3% | -79.8% | |
| Gross Margin | 69.7% | 73.6% | 80.4% | 82.4% | 86.0% | 3.6% |
| EBITDA Margin | 18.3% | 22.8% | 26.4% | 23.7% | 3.7% | -20.1% |
| Net Income Margin | 4.3% | 3.2% | 11.7% | 12.8% | -10.9% | -23.7% |
| SG&A, % of revenue | | | 71.2% | | | 0.0% |
| CAPEX, % of revenue | 0.3% | 0.6% | 1.3% | 0.9% | 0.3% | -0.5% |
| ROIC | 2.0% | 9.8% | 14.4% | 11.1% | -11.0% | -22.1% |
| ROE | 5.5% | 4.1% | 19.2% | 20.3% | -15.6% | -35.9% |
| Net Debt/EBITDA | -1.6x | -0.7x | -0.3x | 0.1x | 1.0x | 0.9x |
Revenue and profitability
The company's Revenue surged on 31.1% in FY2017. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 20.1 pp from 23.7% to 3.7% in FY2017.
Gross Margin increased on 3.6 pp from 82.4% to 86.0% in FY2017.
Net Income marign dropped on 23.7 pp from 12.8% to -10.9% in FY2017.
Capital expenditures (CAPEX) and working capital investments
In FY2017 the company had CAPEX/Revenue of 0.32%. CAPEX/Revenue showed almost no change from FY2014 to FY2017. For the last three years the average CAPEX/Revenue was 0.84%.
Return on investment
The company operates at negative ROIC (-11.01%) and ROE (-15.60%). ROIC dropped on 22.1 pp from 11.1% to -11.0% in FY2017. ROE dropped on 35.9 pp from 20.3% to -15.6% in FY2017.
Leverage (Debt)
Debt level is 1.0x Net Debt / EBITDA and 5.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.9x from 0.1x to 1.0x in FY2017. Debt jumped on 29.1% in FY2017 while cash surged on 19.0% in FY2017.
Valuation
The company's trades at EV/EBITDA 15.0x and P/E 30.5x.
Appendix 1: Peers in Software & Computer Services
Below you can find Proactis Holdings 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Pennant International Group ($PEN) | 29.1% | -4.7% | -44.4% | 74.0% | |
| Sopheon ($SPE) | 5.3% | -16.6% | 23.0% | 69.7% | |
| Coms ($COMS) | 46.8% | 763.3% | 110.4% | 36.1% | |
| Microgen ($MCGN) | -7.7% | -0.0% | 7.2% | 34.5% | |
| IMImobile ($IMO) | | 12.7% | 12.6% | 26.1% | 23.5% |
| |
|---|
| Median (34 companies) | 5.7% | 4.4% | 3.1% | 10.5% | 10.3% |
|---|
| Proactis Holdings ($PHD) | | 26.2% | 69.6% | 12.5% | 31.1% |
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Lombard Risk Management ($LRM) | 98.8% | 99.2% | 98.6% | 99.3% | |
| Netcall ($NET) | 89.7% | 91.0% | 90.9% | 91.2% | 91.7% |
| Wandisco ($WAND) | 80.3% | 80.7% | 93.2% | 88.1% | |
| Dotdigital Group ($DOTD) | 92.7% | 90.5% | 89.3% | 87.4% | |
| Idox ($IDOX) | 90.8% | 89.4% | 89.3% | 86.8% | |
| |
|---|
| Median (24 companies) | 62.0% | 57.8% | 58.8% | 56.6% | 74.4% |
|---|
| Proactis Holdings ($PHD) | 69.7% | 73.6% | 80.4% | 82.4% | 86.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Mail.Ru Group Ltd ($61HE) | 47.4% | 50.5% | 34.6% | 35.2% | |
| Dotdigital Group ($DOTD) | 39.4% | 29.2% | 32.0% | 30.4% | |
| Idox ($IDOX) | 26.1% | 26.0% | 28.6% | 27.3% | |
| Oxford Metrics ($OMG) | 6.0% | 14.7% | 28.4% | 23.1% | |
| Escher Group Hldgs ($ESCH) | 16.2% | 9.8% | 17.6% | 22.7% | |
| |
|---|
| Median (27 companies) | 12.8% | 11.1% | 12.3% | 11.0% | 14.8% |
|---|
| Proactis Holdings ($PHD) | 18.3% | 22.8% | 26.4% | 23.7% | 3.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Mail.Ru Group Ltd ($61HE) | 5.8% | 3.0% | 3.6% | 5.2% | |
| Csf Group ($CSFG) | 4.0% | 2.4% | 7.1% | 4.9% | |
| International Bus Mach Corp ($IBM) | 3.7% | 4.0% | 4.4% | 4.5% | |
| IMImobile ($IMO) | 3.3% | 3.9% | 2.0% | 3.3% | 2.8% |
| Unisys Corp ($USY) | 2.5% | 4.1% | 5.0% | 3.0% | |
| |
|---|
| Median (27 companies) | 1.6% | 1.9% | 1.0% | 1.4% | 1.8% |
|---|
| Proactis Holdings ($PHD) | 0.3% | 0.6% | 1.3% | 0.9% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Rm ($RM.) | 48.6% | 130.8% | 289.2% | 263.8% | |
| Triad Group ($TRD) | -3.8% | 24.5% | 61.5% | 74.4% | |
| Dotdigital Group ($DOTD) | 38.0% | 28.5% | 31.4% | 28.9% | |
| International Bus Mach Corp ($IBM) | 31.0% | 28.1% | 25.7% | 18.7% | |
| Oxford Metrics ($OMG) | -0.1% | 0.8% | 14.6% | 16.3% | |
| |
|---|
| Median (34 companies) | 11.6% | 9.8% | 5.3% | 8.4% | 9.0% |
|---|
| Proactis Holdings ($PHD) | 2.0% | 9.8% | 14.4% | 11.1% | -11.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Zoo Digital Group ($ZOO) | 3.2x | | | 38.3x | |
| Progility ($PGY) | | 1.8x | 12.8x | 6.8x | |
| International Bus Mach Corp ($IBM) | 1.2x | 1.4x | 1.7x | 2.2x | |
| Idox ($IDOX) | 1.3x | 1.0x | 1.3x | 1.2x | |
| Datatec ($DTC) | -0.3x | 0.3x | 0.4x | 1.1x | |
| |
|---|
| Median (24 companies) | -0.4x | -0.3x | -0.6x | -0.9x | -3.0x |
|---|
| Proactis Holdings ($PHD) | -1.6x | -0.7x | -0.3x | 0.1x | 1.0x |
