Ibex Global Solutions EBITDA dropped on 121% while Revenue surged on 11.4%
06 Oct 2018 • About Ibex Global Solutions (
$IBEX) • By InTwits
Ibex Global Solutions reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ibex Global Solutions is a growth stock: FY2018 revenue growth was 11.4%, 5 year revenue CAGR was 15.0% at FY2018 ROIC -20.2%
- EBITDA Margin is declining: -0.6% in FY2018 vs. 2.9% in FY2017 vs. 4.5% in FY2014
- EBITDA Margin is quite volatile: -0.6% in FY2018, 2.9% in FY2017, 7.5% in FY2016, 7.6% in FY2015, 4.5% in FY2014
- Ibex Global Solutions has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 2.4%
- CAPEX is quite volatile: $5m in FY2018, $7m in FY2017, $10m in FY2016, $2m in FY2015, $3m in FY2014
- The company has unprofitable business model: ROIC is -20.2%
- It operates with high leverage: Net Debt/EBITDA is 0.9x while industry average is 0.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Ibex Global Solutions's Revenue jumped on 11.4%. During FY2014-FY2018 Revenue growth bottomed in FY2017 at -0.22%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 23.8 pp from -6.7% to 17.0% in FY2018. During FY2014-FY2018 EBITDA Margin topped in FY2015 at 7.6% and was declining since that time.
Net Income margin decreased on 2.0 pp from -2.8% to -4.8% in FY2018. During FY2014-FY2018 Net Income margin topped in FY2015 at 2.7% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 Ibex Global Solutions had CAPEX/Revenue of 1.8%. The company showed small growth in CAPEX/Revenue of 1.0 pp from 0.72% in FY2015 to 1.8% in FY2018. It's average level of CAPEX/Revenue for the last three years was 2.8%.
Return on investment
The company operates at negative ROIC (-20.2%) and ROE (-79.8%). ROIC dropped on 13.7 pp from -6.6% to -20.2% in FY2018. ROE dropped on 49.2 pp from -30.6% to -79.8% in FY2018. During FY2014-FY2018 ROIC topped in FY2015 at 21.7% and was declining since that time. During the last 5 years ROE topped in FY2015 at 26.5% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is . Net Debt / EBITDA dropped on 4.5x from 4.5x to in FY2018. Debt showed almost no change in FY2018 while cash dropped on 47.0%.
Ibex Global Solutions has short term refinancing risk: cash is only 16.3% of short term debt.
Financial and operational results
FY ended 30 Jun 2018
Ibex Global Solutions ($IBEX) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 184.0 | 238.8 | 255.5 | 254.9 | 284.1 | 11.4% |
| Gross Profit | 28.2 | 38.8 | 42.3 | | | |
| SG&A | 23.3 | 30.0 | 34.5 | | | |
| EBITDA | 8.3 | 18.1 | 19.1 | 7.5 | -1.6 | -121.0% |
| Net Income | 0.8 | 6.4 | 6.5 | -7.2 | -13.8 | |
Balance Sheet
|
|---|
| Cash | 4.0 | 3.0 | 6.2 | 10.5 | 5.6 | -47.0% |
| Short Term Debt | 19.5 | 10.2 | 26.5 | 29.5 | 34.1 | 15.6% |
| Long Term Debt | 7.0 | 11.4 | 12.2 | 14.6 | 9.8 | -32.7% |
Cash flow
|
|---|
| Capex | 2.8 | 1.7 | 9.5 | 7.4 | 5.0 | -32.5% |
Ratios
|
|---|
| Revenue growth | 30.0% | 29.8% | 7.0% | -0.2% | 11.4% | |
| EBITDA growth | 100.0% | 117.3% | 5.3% | -60.7% | -121.0% | |
|
|---|
| Gross Margin | 15.3% | 16.2% | 16.5% | | | |
| EBITDA Margin | 4.5% | 7.6% | 7.5% | 2.9% | -0.6% | -3.5% |
| SG&A, % of revenue | 12.7% | 12.6% | 13.5% | | | |
| Net Income Margin | 0.4% | 2.7% | 2.5% | -2.8% | -4.8% | -2.0% |
| CAPEX, % of revenue | 1.5% | 0.7% | 3.7% | 2.9% | 1.8% | -1.2% |
|
|---|
| ROIC | 9.1% | 21.7% | 15.9% | -6.6% | -20.2% | -13.7% |
| ROE | 3.5% | 26.5% | 24.4% | -30.6% | -79.8% | -49.2% |
| Net Debt/EBITDA | 2.7x | 1.0x | 1.7x | 4.5x | |
Peers in Support Services
Below we provide Ibex Global Solutions benchmarking against other companies in Support 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 |
|---|
| Mobilityone Ltd ($MBO) | 3.7% | 23.0% | -5.3% | 37.9% | |
| Mortice Ltd ($MORT) | | 18.9% | 51.1% | 36.1% | 21.1% |
| Rws Hldgs ($RWS) | 20.9% | 1.8% | 28.1% | 34.5% | |
| Empresaria Group ($EMR) | -3.3% | -0.3% | 44.4% | 32.1% | |
| Norish ($NSH) | 3.7% | 16.4% | 16.7% | 31.4% | |
| |
|---|
| Median (49 companies) | 4.0% | 6.9% | 2.2% | 7.0% | 8.1% |
|---|
| Ibex Global Solutions ($IBEX) | | 29.8% | 7.0% | -0.2% | 11.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inspired Energy ($INSE) | 78.7% | 76.2% | 80.5% | 83.1% | |
| Ienergizer Ltd ($IBPO) | 76.8% | 72.7% | 71.3% | 71.2% | 69.7% |
| Spectra Systems Corp ($SPSY) | 51.4% | 47.6% | 68.3% | 71.1% | |
| Vianet Group ($VNET) | 58.8% | 69.2% | 70.1% | 69.7% | 69.9% |
| Grafenia ($GRA) | 56.1% | 70.8% | 66.3% | 63.0% | 57.0% |
| |
|---|
| Median (44 companies) | 29.2% | 28.4% | 27.3% | 28.0% | 31.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Northgate ($67GX) | 40.6% | 39.4% | 38.3% | 35.9% | 35.4% |
| Spectra Systems Corp ($SPSY) | 12.3% | 6.0% | 19.7% | 34.0% | |
| Inspired Energy ($INSE) | 1.5% | 35.4% | 34.4% | 32.4% | |
| Vp ($VP.) | 24.2% | 26.2% | 28.4% | 28.6% | 27.2% |
| Rws Hldgs ($RWS) | 22.8% | 23.1% | 26.4% | 25.5% | |
| |
|---|
| Median (49 companies) | 6.8% | 6.9% | 4.9% | 5.7% | 7.0% |
|---|
| Ibex Global Solutions ($IBEX) | 4.5% | 7.6% | 7.5% | 2.9% | -0.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vp ($VP.) | 21.6% | 25.7% | 24.1% | 26.0% | 23.6% |
| Augean ($AUG) | 12.3% | 12.3% | 11.0% | 10.0% | |
| Petards Group ($PEG) | 0.5% | 0.9% | 1.7% | 10.0% | |
| Capital Drilling Ltd ($CAPD) | 13.9% | 10.1% | 13.7% | 9.0% | |
| Billing Services Group ($BILL) | 2.1% | 4.1% | 3.0% | 4.5% | |
| |
|---|
| Median (49 companies) | 1.0% | 1.0% | 1.0% | 0.9% | 1.2% |
|---|
| Ibex Global Solutions ($IBEX) | 1.5% | 0.7% | 3.7% | 2.9% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Sthree ($STHR) | 38.1% | 50.2% | 46.2% | 43.4% | |
| Mortice Ltd ($MORT) | 19.6% | 21.9% | 14.5% | 23.2% | 18.4% |
| Petards Group ($PEG) | 24.7% | 23.9% | 22.7% | 20.3% | |
| Rws Hldgs ($RWS) | 24.5% | 23.3% | 23.5% | 20.2% | |
| Latham(James) ($LTHM) | 17.5% | 16.8% | 19.2% | 19.3% | 17.4% |
| |
|---|
| Median (50 companies) | 11.1% | 10.4% | 7.8% | 7.6% | 7.4% |
|---|
| Ibex Global Solutions ($IBEX) | 9.1% | 21.7% | 15.9% | -6.6% | -20.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Nakama Group ($NAK) | 5.2x | 1.4x | 3.1x | 48.5x | |
| 21St Century Technology ($C21) | -0.8x | -0.2x | | 11.2x | |
| Ceps ($CEPS) | 6.6x | 3.8x | 13.9x | 5.8x | |
| Menzies(John) ($68HN) | 2.0x | 2.4x | 1.2x | 3.0x | |
| Mitsubishi Corp ($MBC) | 14.3x | 12.5x | 53.4x | 2.9x | 6.2x |
| |
|---|
| Median (42 companies) | 0.1x | -0.1x | 0.1x | 0.2x | 0.8x |
|---|
| Ibex Global Solutions ($IBEX) | 2.7x | 1.0x | 1.7x | 4.5x | |
