Csf Group reports 426% Net Income growth in 2018 while 71.0% Revenue decline
27 Jul 2018 • About Csf Group (
$CSFG) • By InTwits
Csf Group reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Csf Group is a company in decline: FY2018 revenue growth was -71.0%, 5 years revenue CAGR was -30.1%
- EBITDA Margin is expanding: 3.0% in FY2018 vs. -24.3% in FY2017 vs. -39.5% in FY2014
- Csf Group motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -32.9% for the sames years
- Csf Group has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.9%. At the same time it's a lot of higher than industry average of 3.4%.
- CAPEX is quite volatile: 4 MYRm in FY2018, 7 MYRm in FY2017, 4 MYRm in FY2016, 6 MYRm in FY2015, 2 MYRm in FY2014
- The company has unprofitable business model: ROIC is -15.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 71.0%. During FY2014-FY2018 Revenue growth topped in FY2016 at 2.7% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 27.3 pp from -24.3% to 3.0% in FY2018. EBITDA Margin followed a growing trend at 11.3 pp per annum in FY2014-FY2018.
Gross Margin surged on 44.3 pp from -3.9% to 40.4% in FY2018. SG&A as a % of Revenue jumped on 57.8 pp from 20.6% to 78.4% in FY2018.
Net Income margin jumped on 515 pp from -42.0% to 473% in FY2018.
Investments (CAPEX, working capital and M&A)
Csf Group's CAPEX/Revenue was 16.5% in FY2018. CAPEX/Revenue increased on 9.4 pp from 7.1% in FY2015 to 16.5% in FY2018. Average CAPEX/Revenue for the last three years was 10.0%. Csf Group has spent a lot to CAPEX (556% of EBITDA) which didn't stop revenue from falling. CAPEX as a % of Revenue followed a growing trend at 3.0 pp per annum in FY2014-FY2018.
Leverage (Debt)
Debt level is -69.0x Net Debt / EBITDA and 0.5x Debt / EBITDA. Debt dropped on 76.0% while cash dropped on 18.5%.
Csf Group has no short term refinancing risk: cash is higher than short term debt (14,508.6%).
Financial and operational results
FY ended 31 Mar 2018
Csf Group ($CSFG) key annual financial indicators| mln. MYR | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 103.5 | 81.8 | 84.0 | 82.4 | 23.9 | -71.0% |
| Gross Profit | -7.1 | -28.6 | -1.5 | -3.2 | 9.6 | |
| SG&A | 20.6 | 17.0 | 19.4 | 17.0 | 18.7 | 10.4% |
| EBITDA | -40.9 | -42.5 | -20.9 | -20.1 | 0.7 | |
| Net Income | -132.5 | -31.2 | -36.3 | -34.6 | 113.0 | |
Balance Sheet
|
|---|
| Cash | 22.0 | 31.4 | 45.8 | 60.3 | 49.2 | -18.5% |
| Short Term Debt | 0.9 | 1.3 | 1.3 | 1.3 | 0.3 | -74.1% |
| Long Term Debt | 3.1 | 1.8 | 0.5 | 0.1 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 2.4 | 5.8 | 4.1 | 7.0 | 3.9 | -43.9% |
Ratios
|
|---|
| Revenue growth | -27.7% | -21.0% | 2.7% | -1.9% | -71.0% | |
| EBITDA growth | 66.7% | 3.8% | -50.7% | -4.2% | -103.5% | |
|
|---|
| Gross Margin | -6.8% | -35.0% | -1.8% | -3.9% | 40.4% | 44.3% |
| EBITDA Margin | -39.5% | -51.9% | -24.9% | -24.3% | 3.0% | 27.3% |
| SG&A, % of revenue | 19.9% | 20.7% | 23.1% | 20.6% | 78.4% | 57.8% |
| Net Income Margin | -128.0% | -38.1% | -43.3% | -42.0% | 472.6% | 514.7% |
| CAPEX, % of revenue | 2.4% | 7.1% | 4.9% | 8.5% | 16.5% | 8.0% |
|
|---|
| ROIC | -32.6% | -64.7% | -50.0% | -203.5% | -15.0% | 188.5% |
| ROE | -116.4% | -96.7% | | | | |
| Net Debt/EBITDA | | | | | -69.0x |
Peers in Software & Computer Services
Below we provide Csf Group 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 | 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 ($ZOO) | | 19.9% | 1.5% | 41.7% | 73.2% |
| |
|---|
| Median (39 companies) | 5.2% | 6.3% | 11.7% | 12.4% | 3.0% |
|---|
| Csf Group ($CSFG) | | -21.0% | 2.7% | -1.9% | -71.0% |
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 ($DOTD) | 90.5% | 89.3% | 87.4% | 86.1% | |
| |
|---|
| Median (33 companies) | 57.6% | 58.8% | 60.0% | 57.0% | 28.1% |
|---|
| Csf Group ($CSFG) | -6.8% | -35.0% | -1.8% | -3.9% | 40.4% |
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 (39 companies) | 11.1% | 12.4% | 10.3% | 11.0% | 6.8% |
|---|
| Csf Group ($CSFG) | -39.5% | -51.9% | -24.9% | -24.3% | 3.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Actual Experience ($ACT) | 2.6% | 6.0% | 39.9% | 48.7% | |
| 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% | |
| Mail.Ru Group Ltd ($61HE) | 3.0% | 3.6% | 5.2% | 5.1% | |
| |
|---|
| Median (39 companies) | 1.7% | 1.1% | 1.2% | 1.3% | 0.9% |
|---|
| Csf Group ($CSFG) | 2.4% | 7.1% | 4.9% | 8.5% | 16.5% |
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% | 41.0% |
| 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 ($IBM) | 31.6% | 29.7% | 21.5% | 19.5% | 19.8% |
| |
|---|
| Median (41 companies) | 9.8% | 5.3% | 8.2% | 6.4% | 7.5% |
|---|
| Csf Group ($CSFG) | -32.6% | -64.7% | -50.0% | -203.5% | -15.0% |
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 ($ZOO) | | | 38.3x | 3.2x | 0.9x |
| Statpro Group ($SOG) | -0.3x | -0.2x | | 3.0x | |
| Idox ($IDOX) | 1.0x | 1.3x | 1.2x | 2.2x | |
| |
|---|
| Median (32 companies) | -0.3x | -0.5x | -0.9x | -0.5x | -0.2x |
|---|
