Coms reports 28.3% Net Income decline in 2018 while 14.6% Revenue growth
29 May 2018 • About Coms (
$COMS) • By InTwits
Coms reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Coms is a fast growth stock: FY2018 revenue growth was 14.6%, 5 year revenue CAGR was 96.5% at FY2018 ROIC 6.4%
- EBITDA Margin is quite volatile: 5.1% in FY2018, 4.9% in FY2017, 0.2% in FY2016, 1.1% in FY2015, 9.4% in FY2014
- Coms has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's in pair with industry average of 3.3%
- CAPEX is quite volatile: £0m in FY2018, £0m in FY2017, £0m in FY2016, £2m in FY2015, £0m in FY2014
- The company has potentially unprofitable business model: ROIC is 6.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Coms's Revenue jumped on 14.6%. During FY2014-FY2018 Revenue growth bottomed in FY2017 at 3.5%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 12.0 pp from 5.8% to 17.8% in FY2018. During FY2014-FY2018 EBITDA Margin bottomed in FY2016 at 0.22% and was growing since that time.
Gross Margin increased on 5.9 pp from 22.2% to 28.1% in FY2018. During FY2014-FY2018 Gross Margin bottomed in FY2016 at 17.3% and was growing since that time. SG&A as a % of Revenue increased on 7.4 pp from 17.4% to 24.8% in FY2018. During the last 5 years SG&A as a % of Revenue bottomed in FY2016 at 14.1% and was growing since that time.
Net Income margin decreased slightly on 1.9 pp from 5.1% to 3.2% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.83% in FY2018. The company showed decline in CAPEX/Revenue of 6.7 pp from 7.5% in FY2015 to 0.83% in FY2018. It's average level of CAPEX/Revenue for the last three years was 0.61%.
Return on investment
The company operates at low ROIC (6.4%) and ROE (8.2%). ROIC decreased on 2.3 pp from 8.7% to 6.4% in FY2018. ROE decreased on 9.8 pp from 18.0% to 8.2% in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.5x and Debt / EBITDA is 1.3x. Debt dropped on 13.1% while cash decreased slightly on 1.0%.
Coms has no short term refinancing risk: cash is higher than short term debt (273.4%).
Financial and operational results
FY ended 31 Jan 2018
Coms ($COMS) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 14.003 | 29.468 | 40.098 | 41.521 | 47.574 | 14.6% |
| Gross Profit | 4.755 | 5.158 | 6.950 | 9.224 | 13.358 | 44.8% |
| SG&A | 3.930 | 5.897 | 5.662 | 7.214 | 11.787 | 63.4% |
| EBITDA | 1.313 | 0.336 | 0.090 | 2.037 | 2.427 | 19.1% |
| Net Income | 1.014 | -15.070 | -2.183 | 2.105 | 1.509 | -28.3% |
Balance Sheet
|
|---|
| Cash | 0.999 | 0.492 | 2.430 | 4.468 | 4.423 | -1.0% |
| Short Term Debt | 0.000 | 0.878 | 1.383 | 1.926 | 1.618 | -16.0% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 1.762 | 1.588 | -9.9% |
Cash flow
|
|---|
| Capex | 0.470 | 2.206 | 0.056 | 0.351 | 0.395 | 12.5% |
Ratios
|
|---|
| Revenue growth | 763.3% | 110.4% | 36.1% | 3.5% | 14.6% | |
| EBITDA growth | -256.5% | -74.4% | -73.2% | 2,163.3% | 19.1% | |
|
|---|
| Gross Margin | 34.0% | 17.5% | 17.3% | 22.2% | 28.1% | 5.9% |
| EBITDA Margin | 9.4% | 1.1% | 0.2% | 4.9% | 5.1% | 0.2% |
| SG&A, % of revenue | 28.1% | 20.0% | 14.1% | 17.4% | 24.8% | 7.4% |
| Net Income Margin | 7.2% | -51.1% | -5.4% | 5.1% | 3.2% | -1.9% |
| CAPEX, % of revenue | 3.4% | 7.5% | 0.1% | 0.8% | 0.8% | -0.0% |
|
|---|
| ROIC | 12.0% | -6.6% | -6.5% | 8.7% | 6.4% | -2.3% |
| ROE | 11.2% | -120.7% | -24.4% | 18.0% | 8.2% | -9.8% |
| Net Debt/EBITDA | -0.8x | 1.1x | -11.6x | -0.4x | -0.5x | -0.1x |
Peers in Software & Computer Services
Below you can find Coms 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Pinnacle Technology Group ($PINN) | -17.1% | | | 108.6% | |
| Wandisco ($WAND) | 40.0% | -2.0% | 3.5% | 72.6% | |
| Microgen ($MCGN) | -0.0% | 7.2% | 34.5% | 45.7% | |
| Lombard Risk Management ($LRM) | 21.6% | 5.4% | 10.3% | 44.8% | |
| Zoo Digital Group ($ZOO) | -7.7% | 19.9% | 1.5% | 41.7% | |
| |
|---|
| Median (38 companies) | 4.5% | 4.7% | 10.9% | 14.1% | 1.6% |
|---|
| Coms ($COMS) | | 110.4% | 36.1% | 3.5% | 14.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lombard Risk Management ($LRM) | 99.2% | 98.6% | 99.3% | 99.6% | |
| Netcall ($NET) | 91.0% | 90.9% | 91.2% | 91.7% | |
| Wandisco ($WAND) | 80.7% | 93.2% | 88.1% | 90.0% | |
| Eleco ($ELCO) | 87.8% | 88.9% | 86.7% | 87.9% | |
| Dotdigital Group ($DOTD) | 90.5% | 89.3% | 87.4% | 86.1% | |
| |
|---|
| Median (32 companies) | 57.6% | 58.8% | 60.0% | 57.6% | 24.3% |
|---|
| Coms ($COMS) | 34.0% | 17.5% | 17.3% | 22.2% | 28.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rightster Group ($RSTR) | -146.3% | -64.1% | -19.9% | 114.2% | |
| Dotdigital Group ($DOTD) | 29.2% | 32.0% | 30.4% | 31.7% | |
| Sopheon ($SPE) | 6.8% | 19.8% | 22.6% | 27.9% | |
| Mail.Ru Group Ltd ($61HE) | 50.5% | 34.6% | 35.2% | 25.1% | |
| Gresham Computing ($GHT) | 8.8% | 18.1% | 20.6% | 22.6% | |
| |
|---|
| Median (38 companies) | 11.1% | 12.4% | 10.3% | 10.9% | 15.9% |
|---|
| Coms ($COMS) | 9.4% | 1.1% | 0.2% | 4.9% | 5.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Actual Experience ($ACT) | 2.6% | 6.0% | 39.9% | 48.7% | |
| Csf Group ($CSFG) | 2.4% | 7.1% | 4.9% | 8.5% | |
| Pennant International Group ($PEN) | 1.4% | 0.2% | 6.3% | 7.1% | |
| Nasstar ($NASA) | 2.1% | 5.2% | 8.9% | 6.5% | |
| Oxford Metrics ($OMG) | 2.8% | 2.4% | 1.8% | 5.8% | |
| |
|---|
| Median (38 companies) | 1.7% | 1.1% | 1.2% | 1.3% | 3.8% |
|---|
| Coms ($COMS) | 3.4% | 7.5% | 0.1% | 0.8% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rm ($RM.) | 130.8% | 289.2% | 254.7% | 73.8% | |
| Triad Group ($TRD) | 24.5% | 61.5% | 74.4% | 61.1% | |
| Sopheon ($SPE) | -10.5% | 14.7% | 22.7% | 32.3% | |
| Dotdigital Group ($DOTD) | 28.5% | 31.4% | 28.9% | 29.3% | |
| International Bus Mach Corp ($IBM) | 31.6% | 29.7% | 21.5% | 19.5% | 19.8% |
| |
|---|
| Median (40 companies) | 9.0% | 5.3% | 8.2% | 6.4% | 7.4% |
|---|
| Coms ($COMS) | 12.0% | -6.6% | -6.5% | 8.7% | 6.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Datatec ($DTC) | 0.3x | 0.4x | 1.1x | 10.2x | |
| Progility ($PGY) | 1.8x | 12.8x | 6.8x | 3.9x | |
| Zoo Digital Group ($ZOO) | | | 38.3x | 3.2x | |
| Statpro Group ($SOG) | -0.3x | -0.2x | | 3.0x | |
| Idox ($IDOX) | 1.0x | 1.3x | 1.2x | 2.2x | |
| |
|---|
| Median (30 companies) | -0.3x | -0.6x | -0.8x | -0.5x | 0.9x |
|---|
| Coms ($COMS) | -0.8x | 1.1x | -11.6x | -0.4x | -0.5x |
