Idox reports 77.7% Net Income decline while 15.8% Revenue growth
01 Mar 2018 • About Idox (
$IDOX) • By InTwits
Idox reported FY2017 financial results today. Overall looking at the company's long term financial model we can say that:
- Idox has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 2.1%.
- CAPEX is quite volatile: 1.7 in FY2017, 0.64 in FY2016, 0.56 in FY2015, 0.91 in FY2014, 0.77 in FY2013
- The company has potentially unprofitable business model: ROIC is at 4.5%
- It operates with high leverage: Net Debt/EBITDA is 2.2x while industry average is 0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Idox ($IDOX) key annual financial indicators
| mln. £ | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 57.319 | 60.677 | 62.575 | 76.739 | 88.859 | 15.8% |
| Gross Profit | 52.021 | 54.264 | 55.891 | 66.601 | 73.716 | 10.7% |
| SG&A | 36.967 | 45.774 | 45.347 | 52.316 | 68.567 | 31.1% |
| EBITDA | 14.978 | 15.769 | 17.868 | 20.921 | 14.790 | -29.3% |
| Net Income | 7.523 | 5.843 | 7.829 | 11.806 | 2.628 | -77.7% |
Balance Sheet
|
|---|
| Cash | 3.399 | 5.855 | 4.084 | 3.787 | 3.260 | -13.9% |
| Short Term Debt | 3.732 | 7.397 | 2.428 | 2.425 | 2.410 | -0.6% |
| Long Term Debt | 19.462 | 14.293 | 24.831 | 26.410 | 32.913 | 24.6% |
Cash flow
|
|---|
| Capex | 0.774 | 0.909 | 0.559 | 0.639 | 1.675 | 162.1% |
Ratios
|
|---|
| Revenue growth | 3.5% | 5.9% | 3.1% | 22.6% | 15.8% | |
| EBITDA growth | -12.6% | 5.3% | 13.3% | 17.1% | -29.3% | |
| Gross Margin | 90.8% | 89.4% | 89.3% | 86.8% | 83.0% | -3.8% |
| EBITDA Margin | 26.1% | 26.0% | 28.6% | 27.3% | 16.6% | -10.6% |
| Net Income Margin | 13.1% | 9.6% | 12.5% | 15.4% | 3.0% | -12.4% |
| SG&A, % of revenue | 64.5% | 75.4% | 72.5% | 68.2% | 77.2% | 9.0% |
| CAPEX, % of revenue | 1.4% | 1.5% | 0.9% | 0.8% | 1.9% | 1.1% |
| ROIC | 12.6% | 12.5% | 14.8% | 15.8% | 4.5% | -11.3% |
| ROE | 18.0% | 12.5% | 15.3% | 19.9% | 3.4% | -16.5% |
| Net Debt/EBITDA | 1.3x | 1.0x | 1.3x | 1.2x | 2.2x | 1.0x |
Revenue and profitability
The company's Revenue jumped on 15.8% in FY2017. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 10.6 pp from 27.3% to 16.6% in FY2017.
Gross Margin decreased on 3.8 pp from 86.8% to 83.0% in FY2017. SG&A as a % of Revenue increased on 9.0 pp from 68.2% to 77.2% in FY2017.
Net Income marign dropped on 12.4 pp from 15.4% to 3.0% in FY2017.
Capital expenditures (CAPEX) and working capital investments
In FY2017 Idox had CAPEX/Revenue of 1.9%. The company showed almost no change in CAPEX/Revenue from FY2014 to FY2017. It's average level of CAPEX/Revenue for the last three years was 1.2%.
Return on investment
The company operates at low ROIC (4.48%) and ROE (3.36%). ROIC dropped on 11.3 pp from 15.8% to 4.5% in FY2017. ROE dropped on 16.5 pp from 19.9% to 3.4% in FY2017.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 2.4x. Net Debt / EBITDA surged on 1.0x from 1.2x to 2.2x in FY2017. Debt jumped on 22.5% in FY2017 while cash dropped on 13.9% in FY2017.
Valuation
The company's trades at EV/EBITDA 12.5x and P/E 58.4x.
Appendix 1: Peers in Software & Computer Services
Below we provide Idox 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 | 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 ($IMO) | | 12.7% | 12.6% | 26.1% | 23.5% |
| |
|---|
| Median (34 companies) | 6.1% | 4.4% | 4.1% | 10.5% | 18.7% |
|---|
| Idox ($IDOX) | | 5.9% | 3.1% | 22.6% | 15.8% |
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% | 86.1% |
| Sanderson Group ($SND) | 87.6% | 84.9% | 84.5% | 84.1% | |
| |
|---|
| Median (24 companies) | 62.0% | 57.8% | 58.8% | 56.6% | 86.0% |
|---|
| Idox ($IDOX) | 90.8% | 89.4% | 89.3% | 86.8% | 83.0% |
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% | 31.7% |
| Proactis Holdings ($PHD) | 18.3% | 22.8% | 26.4% | 23.7% | 3.7% |
| Oxford Metrics ($OMG) | 6.0% | 14.7% | 28.4% | 23.1% | 19.9% |
| Escher Group Hldgs ($ESCH) | 16.2% | 9.8% | 17.6% | 22.7% | |
| |
|---|
| Median (27 companies) | 12.8% | 11.1% | 12.3% | 11.0% | 18.5% |
|---|
| Idox ($IDOX) | 26.1% | 26.0% | 28.6% | 27.3% | 16.6% |
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 ($USY) | 2.5% | 4.1% | 5.0% | 3.0% | |
| |
|---|
| Median (27 companies) | 1.6% | 1.9% | 1.3% | 1.4% | 1.2% |
|---|
| Idox ($IDOX) | 1.4% | 1.5% | 0.9% | 0.8% | 1.9% |
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 ($DOTD) | 38.0% | 28.5% | 31.4% | 28.9% | 29.3% |
| International Bus Mach Corp ($IBM) | 31.0% | 28.1% | 25.7% | 18.7% | |
| Oxford Metrics ($OMG) | -0.1% | 0.8% | 14.6% | 16.3% | 12.7% |
| |
|---|
| Median (34 companies) | 11.6% | 9.8% | 5.3% | 8.4% | 10.6% |
|---|
| Idox ($IDOX) | 12.6% | 12.5% | 14.8% | 15.8% | 4.5% |
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 ($IBM) | 1.2x | 1.4x | 1.7x | 2.2x | |
| Datatec ($DTC) | -0.3x | 0.3x | 0.4x | 1.1x | |
| Accesso Technology Grp ($ACSO) | | 1.3x | 0.7x | 0.2x | |
| |
|---|
| Median (24 companies) | -0.5x | -0.4x | -0.6x | -0.9x | -1.6x |
|---|
| Idox ($IDOX) | 1.3x | 1.0x | 1.3x | 1.2x | 2.2x |
