Proactis Holdings reports 1,325% EBITDA growth and 106% Revenue growth
30 Oct 2018 • About Proactis Holdings (
$PHD) • By InTwits
Proactis Holdings reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Proactis Holdings is a fast growth stock: FY2018 revenue growth was 106%, 5 year revenue CAGR was 45.4% at FY2018 ROIC 5.6%
- EBITDA Margin is quite volatile: 25.4% in FY2018, 3.7% in FY2017, 23.7% in FY2016, 26.4% in FY2015, 22.8% in FY2014
- Proactis Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%. At the same time it's in pair with industry average of 3.3%
- CAPEX is quite volatile: £1m in FY2018, £0m in FY2017, £0m in FY2016, £0m in FY2015, £0m in FY2014
- The company has potentially unprofitable business model: ROIC is 5.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.5x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Proactis Holdings's Revenue surged on 106%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 21.7 pp from 3.7% to 25.4% in FY2018.
Gross Margin increased on 2.5 pp from 86.0% to 88.6% in FY2018. Gross Margin stuck to a growing trend at 3.6 pp per annum in FY2014-FY2018.
Net Income margin surged on 20.6 pp from -10.9% to 9.7% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 2.1%. CAPEX/Revenue increased slightly on 0.79 pp from 1.3% in FY2015 to 2.1% in FY2018. It's average CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at low ROIC (5.6%) and ROE (8.7%). ROIC jumped on 16.6 pp from -11.0% to 5.6% in FY2018. ROE jumped on 24.3 pp from -15.6% to 8.7% in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.5x and Debt / EBITDA is 3.2x. Net Debt / EBITDA surged on 1.5x from 1.0x to 2.5x in FY2018. Debt jumped on 720% while cash surged on 124%. Net Debt/EBITDA followed a growing trend at 0.8x per annum in the last 5 years.
Proactis Holdings has no short term refinancing risk: cash is higher than short term debt (312.2%).
Valuation and dividends
Proactis Holdings's trades at EV/EBITDA 12.0x and P/E 25.0x.
Financial and operational results
FY ended 31 Jul 2018
Proactis Holdings ($PHD) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 10.150 | 17.219 | 19.374 | 25.404 | 52.221 | 105.6% |
| Gross Profit | 7.475 | 13.841 | 15.973 | 21.859 | 46.258 | 111.6% |
| SG&A | | 12.259 | | | | |
| EBITDA | 2.316 | 4.543 | 4.601 | 0.930 | 13.256 | 1,325.4% |
| Net Income | 0.322 | 2.016 | 2.485 | -2.771 | 5.042 | |
Balance Sheet
|
|---|
| Cash | 3.124 | 3.424 | 3.595 | 4.277 | 9.561 | 123.5% |
| Short Term Debt | 0.400 | 0.650 | 1.393 | 1.414 | 3.062 | 116.5% |
| Long Term Debt | 1.100 | 1.263 | 2.656 | 3.814 | 39.806 | 943.7% |
Cash flow
|
|---|
| Capex | 0.057 | 0.229 | 0.169 | 0.082 | 1.106 | 1,248.8% |
Ratios
|
|---|
| Revenue growth | 26.2% | 69.6% | 12.5% | 31.1% | 105.6% | |
| EBITDA growth | 57.3% | 96.2% | 1.3% | -79.8% | 1,325.4% | |
|
|---|
| Gross Margin | 73.6% | 80.4% | 82.4% | 86.0% | 88.6% | 2.5% |
| EBITDA Margin | 22.8% | 26.4% | 23.7% | 3.7% | 25.4% | 21.7% |
| SG&A, % of revenue | | 71.2% | | | | |
| Net Income Margin | 3.2% | 11.7% | 12.8% | -10.9% | 9.7% | 20.6% |
| CAPEX, % of revenue | 0.6% | 1.3% | 0.9% | 0.3% | 2.1% | 1.8% |
|
|---|
| ROIC | 9.8% | 14.4% | 11.1% | -11.0% | 5.6% | 16.6% |
| ROE | 4.1% | 19.2% | 20.3% | -15.6% | 8.7% | 24.3% |
| Net Debt/EBITDA | -0.7x | -0.3x | 0.1x | 1.0x | 2.5x | 1.5x |
Peers in Software & Computer Services
Below we provide Proactis Holdings 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 ($ZOO) | | 19.9% | 1.5% | 41.7% | 73.2% |
| |
|---|
| Median (39 companies) | 0.6% | 4.7% | 10.9% | 10.9% | 8.8% |
|---|
| Proactis Holdings ($PHD) | | 69.6% | 12.5% | 31.1% | 105.6% |
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% | 90.2% |
| Wandisco ($WAND) | 80.7% | 93.2% | 88.1% | 90.0% | |
| Eleco ($ELCO) | 87.8% | 88.9% | 86.7% | 87.9% | |
| Dotdigital Group ($DOTD) | 90.5% | 89.3% | 87.4% | 86.1% | 78.9% |
| |
|---|
| Median (33 companies) | 57.5% | 55.0% | 56.6% | 55.1% | 37.8% |
|---|
| Proactis Holdings ($PHD) | 73.6% | 80.4% | 82.4% | 86.0% | 88.6% |
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% | 26.9% |
| 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) | 10.3% | 12.3% | 10.2% | 11.0% | 7.1% |
|---|
| Proactis Holdings ($PHD) | 22.8% | 26.4% | 23.7% | 3.7% | 25.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Actual Experience ($ACT) | 2.6% | 6.0% | 39.9% | 48.7% | |
| Csf Group ($CSFG) | 2.4% | 7.1% | 4.9% | 8.5% | 16.5% |
| Pennant International Group ($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 (39 companies) | 1.9% | 1.2% | 1.2% | 1.3% | 0.9% |
|---|
| Proactis Holdings ($PHD) | 0.6% | 1.3% | 0.9% | 0.3% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rm ($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 ($DOTD) | 28.5% | 31.4% | 28.9% | 29.3% | 26.6% |
| International Bus Mach Corp ($IBM) | 31.6% | 29.7% | 21.5% | 19.5% | 19.8% |
| |
|---|
| Median (41 companies) | 9.0% | 4.0% | 7.1% | 6.4% | 6.4% |
|---|
| Proactis Holdings ($PHD) | 9.8% | 14.4% | 11.1% | -11.0% | 5.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Datatec ($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 (31 companies) | -0.3x | -0.6x | -0.9x | -0.5x | -0.5x |
|---|
| Proactis Holdings ($PHD) | -0.7x | -0.3x | 0.1x | 1.0x | 2.5x |
