GRC International Group Plc reports 10.7% revenue decline in FY2020 and 15.5 pp EBITDA Margin growth from -28.8% to -13.3%
21 Sep 2020 • About GRC International Group Plc (
$GRC) • By InTwits
GRC International Group Plc reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -13.3%
- GRC International Group Plc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.0% while average EBITDA Margin was -6.9% for the sames years
- GRC International Group Plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has unprofitable business model: ROIC is -32.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.7x while industry average is
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 10.7%. During the last 5 years Revenue growth topped in FY2018 at 130% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 15.5 pp from -28.8% to -13.3% in FY2020.
Gross Margin increased on 3.0 pp from 54.0% to 57.0% in FY2020. SG&A as a % of Revenue decreased on 7.2 pp from 86.5% to 79.4% in FY2020.
Net Income margin surged on 11.4 pp from -34.0% to -22.7% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 GRC International Group Plc had CAPEX/Revenue of 0.078%. The company showed small CAPEX/Revenue decline of 0.58 pp from 0.66% in FY2017 to 0.078% in FY2020. Average CAPEX/Revenue for the last three years was 1.4%. During FY2016-FY2020 CAPEX as a % of Revenue topped in FY2018 at 2.5% and was declining since that time.
Return on investment
The company operates at negative ROIC (-32.0%) and ROE (-38.2%). ROIC jumped on 35.0 pp from -67.1% to -32.0% in FY2020. ROE jumped on 43.2 pp from -81.4% to -38.2% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.7x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2020. Debt surged on 344% while cash dropped on 61.7%.
GRC International Group Plc has short term refinancing risk: cash is only 14.9% of short term debt.
Financial and operational results
FY ended 31 Mar 2020
GRC International Group Plc ($GRC) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 4.849 | 6.833 | 15.688 | 15.849 | 14.146 | -10.7% |
| Gross Profit | 2.880 | 4.097 | 9.525 | 8.554 | 8.064 | -5.7% |
| SG&A | 2.694 | 3.380 | 8.385 | 13.716 | 11.230 | -18.1% |
| EBITDA | 0.508 | 1.075 | 0.907 | -4.568 | -1.881 | |
| Net Income | 0.102 | 0.636 | 0.202 | -5.395 | -3.206 | |
Balance Sheet
|
|---|
| Cash | 0.011 | 0.414 | 5.558 | 0.639 | 0.245 | -61.7% |
| Short Term Debt | 0.176 | 0.090 | 0.061 | 0.526 | 1.647 | 213.0% |
| Long Term Debt | 0.168 | 0.098 | 0.034 | 0.000 | 0.687 | |
Cash flow
|
|---|
| Capex | 0.006 | 0.045 | 0.398 | 0.234 | 0.011 | -95.3% |
Ratios
|
|---|
| Revenue growth | 8.6% | 40.9% | 129.6% | 1.0% | -10.7% | |
| EBITDA growth | 1,353.7% | 111.8% | -15.7% | -603.6% | -58.8% | |
|
|---|
| Gross Margin | 59.4% | 59.9% | 60.7% | 54.0% | 57.0% | 3.0% |
| EBITDA Margin | 10.5% | 15.7% | 5.8% | -28.8% | -13.3% | 15.5% |
| SG&A, % of revenue | 55.6% | 49.5% | 53.4% | 86.5% | 79.4% | -7.2% |
| Net Income Margin | 2.1% | 9.3% | 1.3% | -34.0% | -22.7% | 11.4% |
| CAPEX, % of revenue | 0.1% | 0.7% | 2.5% | 1.5% | 0.1% | -1.4% |
|
|---|
| ROIC | 33.4% | 55.3% | 9.5% | -67.1% | -32.0% | 35.0% |
| ROE | 18.6% | 69.6% | 5.7% | -81.4% | -38.2% | 43.2% |
| Net Debt/EBITDA | 0.7x | -0.2x | -6.0x | | |
Peers in IT Consulting & Other Services
Below you can find GRC International Group Plc benchmarking vs. other companies in IT Consulting & Other Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
