Sanderson Group revenue jumped on 48.7% while EBITDA Margin decreased slightly on 1.9 pp from 19.3% to 17.4%
26 Nov 2018 • About Sanderson Group (
$SND) • By InTwits
Sanderson Group reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Sanderson Group is a fast growth stock: FY2018 revenue growth was 48.7%, 5 year revenue CAGR was 18.3% at FY2018 ROIC 10.7%
- Sanderson Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has business model with average profitability: ROIC is 10.7%
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 jumped on 48.7%. During the last 5 years Revenue growth bottomed in FY2017 at 1.1%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.9 pp from 19.3% to 17.4% in FY2018. During FY2014-FY2018 EBITDA Margin topped in FY2015 at 20.2% and was declining since that time.
Gross Margin decreased on 2.6 pp from 82.2% to 79.6% in FY2018. Gross Margin followed a declining trend at -1.3 pp per annum in the last 5 years. SG&A as a % of Revenue increased on 2.6 pp from 29.1% to 31.7% in FY2018. During the last 5 years SG&A as a % of Revenue bottomed in FY2017 at 29.1%.
Net Income margin decreased on 3.9 pp from 13.3% to 9.4% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 0.67%. The company showed small CAPEX/Revenue decline of 0.87 pp from 1.5% in FY2015 to 0.67% in FY2018. It's average level of CAPEX/Revenue for the last three years was 0.90%. During FY2014-FY2018 CAPEX as a % of Revenue topped in FY2015 at 1.5% and was declining since that time.
Return on investment
The company operates at low ROIC (10.7%) and ROE (9.7%). ROIC showed almost no change in FY2018. ROE decreased slightly on 1.1 pp from 10.8% to 9.7% in FY2018. During the last 5 years ROIC topped in FY2016 at 12.0% and was declining since that time. During FY2014-FY2018 ROE topped in FY2017 at 10.8%.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.4x and Debt / EBITDA is 0.8x. Debt surged while cash increased on 4.8%.
Sanderson Group has no short term refinancing risk: cash is higher than short term debt (329.6%).
Financial and operational results
FY ended 30 Nov -0001
Sanderson Group ($SND) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 16.411 | 19.182 | 21.320 | 21.559 | 32.054 | 48.7% |
| Gross Profit | 13.928 | 16.218 | 17.921 | 17.729 | 25.524 | 44.0% |
| SG&A | 5.558 | 5.939 | 6.467 | 6.283 | 10.169 | 61.8% |
| EBITDA | 2.510 | 3.869 | 4.251 | 4.165 | 5.582 | 34.0% |
| Net Income | 1.598 | 1.867 | 2.427 | 2.867 | 3.026 | 5.5% |
Balance Sheet
|
|---|
| Cash | 6.159 | 4.607 | 4.344 | 6.176 | 6.471 | 4.8% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 1.963 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 2.522 | |
Cash flow
|
|---|
| Capex | 0.113 | 0.296 | 0.254 | 0.180 | 0.216 | 20.0% |
Ratios
|
|---|
| Revenue growth | 18.7% | 16.9% | 11.1% | 1.1% | 48.7% | |
| EBITDA growth | 3.4% | 54.1% | 9.9% | -2.0% | 34.0% | |
|
|---|
| Gross Margin | 84.9% | 84.5% | 84.1% | 82.2% | 79.6% | -2.6% |
| EBITDA Margin | 15.3% | 20.2% | 19.9% | 19.3% | 17.4% | -1.9% |
| SG&A, % of revenue | 33.9% | 31.0% | 30.3% | 29.1% | 31.7% | 2.6% |
| Net Income Margin | 9.7% | 9.7% | 11.4% | 13.3% | 9.4% | -3.9% |
| CAPEX, % of revenue | 0.7% | 1.5% | 1.2% | 0.8% | 0.7% | -0.2% |
|
|---|
| ROIC | 7.7% | 10.6% | 12.0% | 11.2% | 10.7% | -0.5% |
| ROE | 6.8% | 7.1% | 9.4% | 10.8% | 9.7% | -1.1% |
| Net Debt/EBITDA | -2.5x | -1.2x | -1.0x | -1.5x | -0.4x | 1.1x |
Peers in Software & Computer Services
Below we provide Sanderson 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 ($ZOO) | | 19.9% | 1.5% | 41.7% | 73.2% |
| |
|---|
| Median (39 companies) | 0.3% | 4.7% | 11.4% | 12.4% | 14.6% |
|---|
| Sanderson Group ($SND) | | 16.9% | 11.1% | 1.1% | 48.7% |
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 ($DOTD) | 90.5% | 89.3% | 87.4% | 86.1% | 78.9% |
| |
|---|
| Median (33 companies) | 57.5% | 55.0% | 56.6% | 55.1% | 40.4% |
|---|
| Sanderson Group ($SND) | 84.9% | 84.5% | 84.1% | 82.2% | 79.6% |
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% | 10.7% | 7.4% |
|---|
| Sanderson Group ($SND) | 15.3% | 20.2% | 19.9% | 19.3% | 17.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Actual Experience ($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% | 1.1% | 1.2% | 1.3% | 1.0% |
|---|
| Sanderson Group ($SND) | 0.7% | 1.5% | 1.2% | 0.8% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rm ($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) | 9.8% | 4.0% | 7.1% | 6.3% | 6.0% |
|---|
| Sanderson Group ($SND) | 7.7% | 10.6% | 12.0% | 11.2% | 10.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Datatec ($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 | -0.5x | -0.8x | -0.5x | -0.2x |
|---|
| Sanderson Group ($SND) | -2.5x | -1.2x | -1.0x | -1.5x | -0.4x |
