Software Radio Technology reports 278% Net Income decline in 2020 and 49.0 pp EBITDA Margin decline from 22.3% to -26.8%
07 Sep 2020 • About Software Radio Technology (
$SRT) • By InTwits
Software Radio Technology reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -26.8%
- Software Radio Technology has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 2.3%
- CAPEX is quite volatile: £1m in FY2020, £0m in FY2019, £0m in FY2018, £0m in FY2017, £0m in FY2016
- The company has unprofitable business model: ROIC is -32.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 8.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.4 pp from 4.7% to 7.1% in FY2020.
Gross Margin dropped on 22.3 pp from 45.4% to 23.1% in FY2020. SG&A as a % of Revenue increased on 7.8 pp from 28.6% to 36.4% in FY2020.
Net Income margin dropped on 48.7 pp from 16.6% to -32.2% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 2.8%. Software Radio Technology's CAPEX/Revenue increased slightly on 1.7 pp from 1.1% in FY2017 to 2.8% in FY2020. Average CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at negative ROIC (-32.7%) and ROE (-36.2%). ROIC dropped on 49.4 pp from 16.7% to -32.7% in FY2020. ROE dropped on 59.2 pp from 23.0% to -36.2% in FY2020.
Leverage (Debt)
Debt level is 1.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 0.2x to in FY2020. Debt surged on 25.0% while cash dropped on 76.7%.
Software Radio Technology has short term refinancing risk: cash is only 17.7% of short term debt.
Financial and operational results
FY ended 31 Mar 2020
Software Radio Technology ($SRT) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 10.684 | 11.026 | 5.332 | 20.560 | 18.908 | -8.0% |
| Gross Profit | 5.168 | 7.240 | 2.305 | 9.330 | 4.371 | -53.2% |
| SG&A | 4.848 | 5.961 | 6.469 | 5.877 | 6.883 | 17.1% |
| EBITDA | 1.714 | 2.666 | -3.613 | 4.576 | -5.060 | -210.6% |
| Net Income | 0.434 | 1.451 | -5.228 | 3.408 | -6.079 | -278.4% |
Balance Sheet
|
|---|
| Cash | 1.862 | 1.761 | 1.364 | 3.942 | 0.919 | -76.7% |
| Short Term Debt | 0.000 | 0.500 | 1.650 | 0.018 | 5.192 | 28,659.0% |
| Long Term Debt | 1.000 | 0.500 | 2.000 | 4.990 | 1.068 | -78.6% |
Cash flow
|
|---|
| Capex | 0.107 | 0.123 | 0.084 | 0.240 | 0.524 | 117.9% |
Ratios
|
|---|
| Revenue growth | 25.4% | 3.2% | -51.6% | 285.6% | -8.0% | |
| EBITDA growth | 42.7% | 55.5% | -235.5% | -226.7% | -210.6% | |
|
|---|
| Gross Margin | 48.4% | 65.7% | 43.2% | 45.4% | 23.1% | -22.3% |
| EBITDA Margin | 16.0% | 24.2% | -67.8% | 22.3% | -26.8% | -49.0% |
| SG&A, % of revenue | 45.4% | 54.1% | 121.3% | 28.6% | 36.4% | 7.8% |
| Net Income Margin | 4.1% | 13.2% | -98.0% | 16.6% | -32.2% | -48.7% |
| CAPEX, % of revenue | 1.0% | 1.1% | 1.6% | 1.2% | 2.8% | 1.6% |
|
|---|
| ROIC | 1.5% | 6.2% | -35.6% | 16.7% | -32.7% | -49.4% |
| ROE | 3.4% | 10.5% | -42.9% | 23.0% | -36.2% | -59.2% |
| Net Debt/EBITDA | -0.5x | -0.3x | | 0.2x | |
Peers in Technology Hardware & Equipment
Below we provide Software Radio Technology 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Seeing Machines ($SEE) | 76.8% | -57.8% | 116.6% | 3.8% | - |
| Samsung Electronics Co ($SMSN) | 0.6% | 18.7% | 1.8% | -5.8% | - |
| Northamber ($NAR) | -5.5% | -7.4% | 1.5% | -13.4% | - |
| |
|---|
| Median (3 companies) | -3.8% | 2.0% | 7.1% | -5.8% | - |
|---|
| Software Radio Technology ($SRT) | - | 3.2% | -51.6% | 285.6% | -8.0% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Seeing Machines ($SEE) | 81.3% | 4.9% | 24.8% | 58.1% | - |
| Northamber ($NAR) | 7.8% | 7.7% | 7.8% | 8.6% | - |
| |
|---|
| Median (2 companies) | 34.0% | 26.3% | 45.7% | 33.3% | - |
|---|
| Software Radio Technology ($SRT) | 48.4% | 65.7% | 43.2% | 45.4% | 23.1% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Northamber ($NAR) | -1.8% | -1.7% | -0.7% | -1.4% | - |
| Seeing Machines ($SEE) | -5.6% | -187.7% | -116.1% | -124.7% | - |
| |
|---|
| Median (2 companies) | 6.8% | 5.8% | 10.2% | -63.1% | - |
|---|
| Software Radio Technology ($SRT) | 16.0% | 24.2% | -67.8% | 22.3% | -26.8% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Seeing Machines ($SEE) | 1.6% | 5.6% | 12.6% | 1.2% | - |
| Northamber ($NAR) | 0.1% | 0.3% | 0.1% | 0.1% | - |
| |
|---|
| Median (2 companies) | 1.6% | 1.7% | 2.0% | 0.7% | - |
|---|
| Software Radio Technology ($SRT) | 1.0% | 1.1% | 1.6% | 1.2% | 2.8% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Northamber ($NAR) | -6.5% | -5.6% | -3.2% | -5.0% | - |
| Seeing Machines ($SEE) | -7.9% | -71.4% | -76.1% | -52.1% | - |
| Samsung Electronics Co ($SMSN) | 14.3% | 23.2% | 22.2% | - | - |
| |
|---|
| Median (3 companies) | 1.8% | 4.9% | 7.5% | -28.5% | - |
|---|
| Software Radio Technology ($SRT) | 1.5% | 6.2% | -35.6% | 16.7% | -32.7% |
