Ideagen reports 23.5 pp EBITDA Margin decline from 23.5% to in 2020 in 2020

22 Sep 2020 • About Ideagen ($IDEA) • By InTwits

Ideagen reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:

Ideagen is a fast growth stock: FY2020 revenue growth was 21.2%, 5 year revenue CAGR was 31.5% at FY2020 ROIC
It operates with medium-size leverage: Net Debt/EBITDA is 1.0x while industry average is -1.9x

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 surged on 21.2%.

Net Income margin decreased on 3.3 pp from 3.0% to -0.34% in FY2020.

Financial and operational results

Ideagen ($IDEA) key annual financial indicators

mln. £	2016	2017	2018	2019	2020	2020/2019
P&L
Revenue	21.936	27.112	36.120	46.667	56.565	21.2%
Gross Profit	19.304	24.271	32.954	42.767
EBITDA	5.240	5.923	8.601	10.968
Net Income	1.317	0.731	1.529	1.385	-0.193	-113.9%
Balance Sheet
Cash	6.317	6.205	5.532	6.199
Short Term Debt	0.000	2.000	4.750	7.500
Long Term Debt	0.000	0.000	0.000	0.000
Cash flow
Capex	0.347	0.289	0.517	0.679
Ratios
Revenue growth	52.4%	23.6%	33.2%	29.2%	21.2%
EBITDA growth	40.0%	13.0%	45.2%	27.5%

Gross Margin	88.0%	89.5%	91.2%	91.6%
EBITDA Margin	23.9%	21.8%	23.8%	23.5%
Net Income Margin	6.0%	2.7%	4.2%	3.0%	-0.3%	-3.3%
CAPEX, % of revenue	1.6%	1.1%	1.4%	1.5%

ROIC	2.5%	1.5%	2.5%	2.0%
ROE	4.1%	1.8%	3.2%	2.2%
Net Debt/EBITDA	-1.2x	-0.7x	-0.1x	0.1x

Peers in Software & Computer Services

Below we provide Ideagen 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	FY2016	FY2017	FY2018	FY2019	FY2020
Actual Experience ($ACT)	2.3%	-49.1%	195.1%	79.7%	-
Eagle Eye Solutions Ltd ($EYE)	-	71.2%	24.6%	22.8%	20.6%
Arcontech Group ($ARC)	-	7.8%	9.2%	12.8%	4.0%
Oxford Metrics ($OMG)	14.6%	-1.1%	8.6%	11.7%	-
Rosslyn Data Technologies ($RDT)	-	-9.4%	83.5%	8.3%	2.1%
Median (15 companies)	12.4%	14.1%	17.5%	4.7%	2.1%
Ideagen ($IDEA)	-	23.6%	33.2%	29.2%	21.2%

Top companies by Gross margin, %


Top 5	FY2016	FY2017	FY2018	FY2019	FY2020
Craneware ($CRW)	94.0%	93.8%	94.9%	93.8%	93.7%
Eagle Eye Solutions Ltd ($EYE)	78.8%	88.3%	89.3%	93.1%	93.5%
Netcall ($NET)	91.2%	91.7%	90.2%	89.8%	-
Dotdigital Group ($DOTD)	87.4%	86.1%	78.9%	89.7%	-
Proactis Holdings ($PHD)	82.4%	86.0%	88.6%	87.7%	-
Median (14 companies)	61.1%	58.2%	46.4%	73.8%	66.5%
Ideagen ($IDEA)	88.0%	89.5%	91.2%	91.6%	-

Top companies by EBITDA margin, %


Top 5	FY2016	FY2017	FY2018	FY2019	FY2020
Dotdigital Group ($DOTD)	30.4%	31.7%	26.9%	34.9%	-
Arcontech Group ($ARC)	14.5%	16.7%	23.0%	32.4%	40.4%
Micro Focus International ($MCRO)	40.9%	38.9%	27.5%	30.3%	-
Craneware ($CRW)	32.3%	30.4%	31.1%	30.3%	33.4%
Oxford Metrics ($OMG)	23.1%	19.9%	23.5%	21.3%	-
Median (15 companies)	10.5%	10.9%	12.2%	15.4%	16.7%
Ideagen ($IDEA)	23.9%	21.8%	23.8%	23.5%	-

Top companies by CAPEX/Revenue, %


Top 5	FY2016	FY2017	FY2018	FY2019	FY2020
Netcall ($NET)	2.7%	0.7%	0.8%	4.7%	-
International Bus Mach Corp ($IBM)	4.5%	4.1%	4.3%	3.1%	4.1%
Unisys Corp ($USY)	3.0%	4.1%	3.8%	2.9%	2.9%
Micro Focus International ($MCRO)	0.8%	0.9%	0.8%	1.7%	-
Oxford Metrics ($OMG)	1.8%	5.8%	3.9%	1.3%	-
Median (15 companies)	1.1%	1.2%	0.8%	1.1%	0.4%
Ideagen ($IDEA)	1.6%	1.1%	1.4%	1.5%	-

Top companies by ROIC, %


Top 5	FY2016	FY2017	FY2018	FY2019	FY2020
Craneware ($CRW)	27.9%	30.0%	34.9%	33.4%	29.8%
Rm ($RM.)	254.7%	73.8%	39.0%	31.6%	-
Dotdigital Group ($DOTD)	28.9%	29.3%	26.6%	25.9%	-
Arcontech Group ($ARC)	14.5%	14.5%	17.8%	22.9%	20.4%
Oxford Metrics ($OMG)	16.3%	12.7%	16.4%	14.7%	-
Median (16 companies)	7.1%	5.6%	5.6%	5.1%	6.4%
Ideagen ($IDEA)	2.5%	1.5%	2.5%	2.0%	-

Top companies by Net Debt / EBITDA


Top 5	FY2016	FY2017	FY2018	FY2019	FY2020
Micro Focus International ($MCRO)	2.1x	6.6x	4.2x	4.3x	-
International Bus Mach Corp ($IBM)	1.7x	1.8x	1.7x	3.8x	4.1x
Rm ($RM.)	-2.2x	0.7x	0.2x	0.5x	-
Ncc Group ($NCC)	0.5x	-	0.8x	0.5x	1.0x
Unisys Corp ($USY)	-0.3x	-0.6x	0.1x	0.4x	-0.6x
Median (10 companies)	-0.9x	-0.5x	-0.4x	0.0x	-0.6x
Ideagen ($IDEA)	-1.2x	-0.7x	-0.1x	0.1x	-

Ideagen stock price chart

Ideagen financials

mln.	FY2015	FY2016	FY2017

Revenue	14.389	21.936	27.112
EBITDA	3.744	5.240	5.923
Net income	0.480	1.317	0.731
CAPEX	0.098	0.347	0.289
Debt	0.000	0.000	2.000
Cash	5.266	6.317	6.205

About Ideagen

Ideagen plc develops and supplies compliance based enterprise information management software primarily in the United Kingdom and the United States. Its governance, risk and compliance (GRC) management solutions include Ideagen Capture, which provides integrated scanning and capture solutions, such as digital mailroom, forms processing, examinations processing, document and data storage, accounts payable automation, surveys and questionnaires, PCI/DSS, and payment processing; KnowledgeWorker, an enterprise content management solution; and internal audit and risk management software to support the professional expertise of auditors, accountants, and risk managers. The company