Proactis Holdings revenue decreased on 8.4% while EBITDA Margin surged on 13.0 pp from -25.2% to -12.2%
29 Oct 2020 • About Proactis Holdings (
$PHD) • By InTwits
Proactis Holdings 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: -12.2%
- EBITDA Margin is quite volatile: -12.2% in FY2020, -25.2% in FY2019, 25.4% in FY2018, 3.7% in FY2017, 23.7% in FY2016
- Proactis Holdings motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.0% while average EBITDA Margin was -0.5% for the sames years
- Proactis Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 2.1%.
- CAPEX is quite volatile: £1m in FY2020, £1m in FY2019, £1m in FY2018, £0m in FY2017, £0m in FY2016
- The company has unprofitable business model: ROIC is -15.1%
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 8.4%. During the last 5 years Revenue growth topped in FY2018 at 106% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 13.0 pp from -25.2% to -12.2% in FY2020.
Gross Margin increased slightly on 1.5 pp from 87.7% to 89.2% in FY2020. Gross Margin followed a growing trend at 1.5 pp per annum in FY2016-FY2020.
Net Income margin jumped on 10.5 pp from -48.9% to -38.4% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Proactis Holdings had CAPEX/Revenue of 1.1%. Proactis Holdings showed small growth in CAPEX/Revenue of 0.75 pp from 0.32% in FY2017 to 1.1% in FY2020. For the last three years the average CAPEX/Revenue was 1.4%.
Return on investment
The company operates at negative ROIC (-15.1%) and ROE (-31.9%). ROIC increased on 2.6 pp from -17.7% to -15.1% in FY2020. ROE increased slightly on 0.67 pp from -32.6% to -31.9% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -7.7x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2020. Debt increased on 7.8% while cash dropped on 42.8%.
Proactis Holdings has no short term refinancing risk: cash is higher than short term debt (187.1%).
Financial and operational results
Proactis Holdings ($PHD) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 19.374 | 25.404 | 52.221 | 54.140 | 49.571 | -8.4% |
| Gross Profit | 15.973 | 21.859 | 46.258 | 47.481 | 44.232 | -6.8% |
| EBITDA | 4.601 | 0.930 | 13.256 | -13.641 | -6.060 | |
| Net Income | 2.485 | -2.771 | 5.042 | -26.462 | -19.017 | |
Balance Sheet
|
|---|
| Cash | 3.595 | 4.277 | 9.561 | 7.732 | 4.424 | -42.8% |
| Short Term Debt | 1.393 | 1.414 | 3.062 | 3.211 | 2.364 | -26.4% |
| Long Term Debt | 2.656 | 3.814 | 39.806 | 46.604 | 51.317 | 10.1% |
Cash flow
|
|---|
| Capex | 0.169 | 0.082 | 1.106 | 0.586 | 0.530 | -9.6% |
Ratios
|
|---|
| Revenue growth | 12.5% | 31.1% | 105.6% | 3.7% | -8.4% | |
| EBITDA growth | 1.3% | -79.8% | 1,325.4% | -202.9% | -55.6% | |
|
|---|
| Gross Margin | 82.4% | 86.0% | 88.6% | 87.7% | 89.2% | 1.5% |
| EBITDA Margin | 23.7% | 3.7% | 25.4% | -25.2% | -12.2% | 13.0% |
| Net Income Margin | 12.8% | -10.9% | 9.7% | -48.9% | -38.4% | 10.5% |
| CAPEX, % of revenue | 0.9% | 0.3% | 2.1% | 1.1% | 1.1% | -0.0% |
|
|---|
| ROIC | 11.1% | -11.0% | 5.6% | -17.7% | -15.1% | 2.6% |
| ROE | 20.3% | -15.6% | 8.7% | -32.6% | -31.9% | 0.7% |
| Net Debt/EBITDA | 0.1x | 1.0x | 2.5x | | |
Peers in Software & Computer Services
Below you can find Proactis Holdings benchmarking vs. other companies in Software & Computer 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.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Actual Experience ($ACT) | 2.3% | -49.1% | 195.1% | 79.7% | - |
| Ideagen ($IDEA) | - | 23.6% | 33.2% | 29.2% | 21.2% |
| 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 ($OMG) | 14.6% | -1.1% | 8.6% | 11.7% | - |
| |
|---|
| Median (15 companies) | 13.4% | 14.1% | 17.5% | 6.5% | 4.0% |
|---|
| Proactis Holdings ($PHD) | - | 31.1% | 105.6% | 3.7% | -8.4% |
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% |
| Ideagen ($IDEA) | 88.0% | 89.5% | 91.2% | 91.6% | - |
| Netcall ($NET) | 91.2% | 91.7% | 90.2% | 89.8% | 88.3% |
| Dotdigital Group ($DOTD) | 87.4% | 86.1% | 78.9% | 89.7% | - |
| |
|---|
| Median (14 companies) | 61.1% | 58.2% | 46.4% | 73.8% | 84.7% |
|---|
| Proactis Holdings ($PHD) | 82.4% | 86.0% | 88.6% | 87.7% | 89.2% |
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% |
| Ideagen ($IDEA) | 23.9% | 21.8% | 23.8% | 23.5% | - |
| |
|---|
| Median (15 companies) | 10.5% | 11.3% | 12.2% | 15.4% | 15.8% |
|---|
| Proactis Holdings ($PHD) | 23.7% | 3.7% | 25.4% | -25.2% | -12.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Netcall ($NET) | 2.7% | 0.7% | 0.8% | 4.7% | 0.6% |
| International Bus Mach Corp ($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% | - |
| Ideagen ($IDEA) | 1.6% | 1.1% | 1.4% | 1.5% | - |
| |
|---|
| Median (15 companies) | 1.2% | 1.2% | 0.8% | 1.2% | 0.5% |
|---|
| Proactis Holdings ($PHD) | 0.9% | 0.3% | 2.1% | 1.1% | 1.1% |
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 ($OMG) | 16.3% | 12.7% | 16.4% | 14.7% | - |
| |
|---|
| Median (16 companies) | 7.0% | 5.6% | 5.0% | 5.1% | 6.1% |
|---|
| Proactis Holdings ($PHD) | 11.1% | -11.0% | 5.6% | -17.7% | -15.1% |
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 (11 companies) | -1.0x | -0.6x | -0.4x | 0.1x | -0.6x |
|---|
