Trakm8 Hldgs reports 32.6% EBITDA growth and 1.6 pp EBITDA Margin growth from 8.7% to 10.2%
02 Jul 2018 • About Trakm8 Holdings (
$TRAK) • By InTwits
Trakm8 Holdings reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Trakm8 Holdings is a fast growth stock: FY2018 revenue growth was 12.4%, 5 year revenue CAGR was 44.7% at FY2018 ROIC 4.6%
- Trakm8 Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. 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, £0m in FY2015, £0m in FY2014
- The company has potentially unprofitable business model: ROIC is 4.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Trakm8 Holdings's Revenue surged on 12.4%. Revenue decline was accelerating on average at -25.2 pp per annum in FY2014-FY2018. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.6 pp from 8.7% to 10.2% in FY2018.
Gross Margin showed almost no change in FY2018. SG&A as a % of Revenue showed almost no change in FY2018. During FY2014-FY2018 SG&A as a % of Revenue bottomed in FY2016 at 30.7% and was growing since that time.
Net Income margin showed almost no change in FY2018. During the last 5 years Net Income margin topped in FY2016 at 13.0% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 0.30%. The company's CAPEX/Revenue decreased slightly on 1.7 pp from 2.0% in FY2015 to 0.30% in FY2018. It's average CAPEX/Revenue for the last three years was 0.91%. CAPEX as a % of Revenue stuck to a declining trend at -0.73 pp per annum in the last 5 years.
Return on investment
The company operates at low ROIC (4.6%) and ROE (7.4%). ROIC increased slightly on 1.00 pp from 3.6% to 4.6% in FY2018. ROE showed almost no change in FY2018. During FY2014-FY2018 ROE topped in FY2015 at 27.9% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.1x and Debt / EBITDA is 2.2x. Net Debt / EBITDA dropped on 0.6x from 1.7x to 1.1x in FY2018. Debt surged on 15.6% while cash surged on 74.5%. Net Debt/EBITDA grew at 0.5x per annum in the last 5 years.
Trakm8 Holdings has no short term refinancing risk: cash is higher than short term debt (301.7%).
Valuation and dividends
Trakm8 Holdings's trades at EV/EBITDA 12.3x and P/E 22.0x.
Financial and operational results
FY ended 31 Mar 2018
Trakm8 Holdings ($TRAK) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 9.193 | 17.853 | 25.649 | 26.759 | 30.081 | 12.4% |
| Gross Profit | 5.261 | 8.062 | 12.398 | 13.209 | 14.849 | 12.4% |
| SG&A | 4.399 | 6.301 | 7.868 | 12.462 | 14.086 | 13.0% |
| EBITDA | 1.184 | 2.498 | 4.044 | 2.319 | 3.075 | 32.6% |
| Net Income | 0.471 | 1.689 | 3.344 | 1.470 | 1.571 | 6.8% |
Balance Sheet
|
|---|
| Cash | 2.911 | 3.408 | 3.871 | 1.990 | 3.472 | 74.5% |
| Short Term Debt | 0.500 | 0.576 | 0.981 | 1.051 | 1.151 | 9.5% |
| Long Term Debt | 1.792 | 2.236 | 3.976 | 4.806 | 5.621 | 17.0% |
Cash flow
|
|---|
| Capex | 0.303 | 0.355 | 0.449 | 0.181 | 0.091 | -49.6% |
Ratios
|
|---|
| Revenue growth | 93.5% | 94.2% | 43.7% | 4.3% | 12.4% | |
| EBITDA growth | 265.8% | 111.0% | 61.9% | -42.7% | 32.6% | |
|
|---|
| Gross Margin | 57.2% | 45.2% | 48.3% | 49.4% | 49.4% | -0.0% |
| EBITDA Margin | 12.9% | 14.0% | 15.8% | 8.7% | 10.2% | 1.6% |
| SG&A, % of revenue | 47.8% | 35.3% | 30.7% | 46.6% | 46.8% | 0.3% |
| Net Income Margin | 5.1% | 9.5% | 13.0% | 5.5% | 5.2% | -0.3% |
| CAPEX, % of revenue | 3.3% | 2.0% | 1.8% | 0.7% | 0.3% | -0.4% |
|
|---|
| ROIC | 18.7% | 22.5% | 20.8% | 3.6% | 4.6% | 1.0% |
| ROE | 12.3% | 27.9% | 27.8% | 7.9% | 7.4% | -0.5% |
| Net Debt/EBITDA | -0.5x | -0.2x | 0.3x | 1.7x | 1.1x | -0.6x |
Peers in Technology Hardware & Equipment
Below we provide Trakm8 Holdings 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Filtronic ($FTC) | -17.7% | -46.7% | -22.5% | 160.5% | |
| Toumaz Ld ($TMZ) | 19.5% | 22.1% | 0.3% | 27.7% | |
| Cml Microsystems ($CML) | | -10.6% | 4.7% | 21.5% | 14.2% |
| Samsung Electronics Co ($SMSN) | -9.8% | -2.7% | 0.6% | 18.7% | |
| Batm Advanced Communications ($BVC) | -4.3% | -11.1% | -6.9% | 18.5% | |
| |
|---|
| Median (18 companies) | 3.4% | 0.2% | -4.7% | 0.4% | 14.2% |
|---|
| Trakm8 Holdings ($TRAK) | | 94.2% | 43.7% | 4.3% | 12.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cml Microsystems ($CML) | 73.3% | 70.9% | 71.2% | 71.4% | 70.2% |
| Vislink ($VLK) | 45.9% | 45.0% | 73.1% | 62.9% | |
| Concurrent Technologies ($CNC) | 51.2% | 50.6% | 54.2% | 55.4% | |
| Samsung Electronics Co ($SMSN) | 37.8% | 38.5% | 40.4% | 46.0% | |
| Toumaz Ld ($TMZ) | 43.6% | 42.4% | 44.0% | 41.2% | |
| |
|---|
| Median (17 companies) | 36.0% | 36.6% | 31.4% | 22.1% | 70.2% |
|---|
| Trakm8 Holdings ($TRAK) | 57.2% | 45.2% | 48.3% | 49.4% | 49.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Samsung Electronics Co ($SMSN) | 20.9% | 23.6% | 24.7% | 31.6% | |
| Cml Microsystems ($CML) | 35.1% | 29.9% | 30.0% | 31.4% | 30.7% |
| Concurrent Technologies ($CNC) | 27.1% | 28.6% | 24.8% | 28.4% | |
| Tatung Co ($TAT) | 9.2% | 2.1% | 9.1% | 12.5% | |
| Mti Wireless Edge ($MWE) | 5.5% | 12.0% | 9.1% | 8.5% | |
| |
|---|
| Median (18 companies) | 5.6% | 5.3% | 6.1% | 5.4% | 30.7% |
|---|
| Trakm8 Holdings ($TRAK) | 12.9% | 14.0% | 15.8% | 8.7% | 10.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Tatung Co ($TAT) | 4.3% | 6.7% | 16.1% | 45.1% | |
| Samsung Electronics Co ($SMSN) | 10.7% | 12.9% | 12.0% | 17.9% | |
| Seeing Machines ($SEE) | 1.0% | 3.9% | 1.6% | 5.6% | |
| Batm Advanced Communications ($BVC) | 1.6% | 2.5% | 4.1% | 3.0% | |
| Filtronic ($FTC) | 3.2% | 1.1% | 1.3% | 2.3% | |
| |
|---|
| Median (18 companies) | 1.9% | 1.8% | 1.5% | 1.7% | 1.5% |
|---|
| Trakm8 Holdings ($TRAK) | 3.3% | 2.0% | 1.8% | 0.7% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Samsung Electronics Co ($SMSN) | 14.4% | 14.0% | 14.3% | 23.2% | |
| Filtronic ($FTC) | -14.9% | -80.4% | -79.3% | 18.6% | |
| Concurrent Technologies ($CNC) | 14.1% | 20.9% | 14.7% | 16.1% | |
| Cml Microsystems ($CML) | 23.0% | 10.3% | 10.1% | 11.2% | 10.4% |
| Lite-On Technology Corp ($LTTD) | 5.7% | 7.0% | 10.6% | 7.5% | |
| |
|---|
| Median (18 companies) | 5.7% | 3.4% | 1.7% | 5.1% | 10.4% |
|---|
| Trakm8 Holdings ($TRAK) | 18.7% | 22.5% | 20.8% | 3.6% | 4.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vislink ($VLK) | -0.0x | 1.8x | 0.4x | 54.5x | |
| Tatung Co ($TAT) | 6.7x | 40.1x | 9.2x | 7.7x | |
| Compal Electronics Inc ($CEIR) | -0.2x | -0.3x | 0.1x | 1.0x | |
| Global Invacom Group Ltd ($GINV) | -2.8x | -1.4x | -0.9x | 0.1x | |
| Hon Hai Precision Industry ($HHPD) | -1.2x | -1.5x | -0.9x | 0.1x | |
| |
|---|
| Median (15 companies) | -1.4x | -1.4x | -0.9x | -1.1x | -1.4x |
|---|
| Trakm8 Holdings ($TRAK) | -0.5x | -0.2x | 0.3x | 1.7x | 1.1x |
