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Image Scan Hldgs revenue surged on 47.3% and EBITDA Margin surged on 21.0 pp from -16.0% to 5.0%

04 Dec 2020 • About Image Scan Hldgs ($IGE) • By InTwits

Image Scan Hldgs reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Image Scan Hldgs is a fast growth stock: FY2020 revenue growth was 47.3%, 5 year revenue CAGR was 15.3% at FY2020 ROIC 7.9%
  • Image Scan Hldgs has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
  • The company has business model with low profitability: ROIC is 7.9%
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 47.3%. During the last 5 years Revenue growth bottomed in FY2019 at -31.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.1 pp from 32.3% to 41.4% in FY2020.

Gross Margin decreased on 4.6 pp from 54.1% to 49.5% in FY2020.

Net Income margin jumped on 19.5 pp from -15.6% to 4.0% in FY2020.

Investments (CAPEX, working capital and M&A)

In FY2020 the company had CAPEX/Revenue of 0.14%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 0.41%.

Return on investment

The company operates at low ROIC (7.9%) and ROE (10.3%). ROIC jumped on 35.6 pp from -27.7% to 7.9% in FY2020. ROE jumped on 35.7 pp from -25.4% to 10.3% in FY2020.

Leverage (Debt)

Debt level is -7.7x Net Debt / EBITDA and 0.5x Debt / EBITDA. Debt surged while cash jumped on 120%.

Image Scan Hldgs has no short term refinancing risk: cash is higher than short term debt (3,382.6%).

Valuation and dividends

Image Scan Hldgs's trades at EV/EBITDA 18.5x and P/E 32.7x.

Financial and operational results

FY ended 30 Sep 2020

Image Scan Hldgs ($IGE) key annual financial indicators

mln. £201620172018201920202020/2019
Gross Profit1.4041.9301.6451.2791.72434.8%
Net Income0.1050.580-0.220-0.3680.138
Balance Sheet
Short Term Debt0.0000.0000.0000.0000.042
Long Term Debt0.0000.0000.0000.0000.047
Cash flow
Revenue growth94.1%51.9%-31.2%-31.7%47.3%
EBITDA growth344.9%-125.0%190.4%-145.6%

Gross Margin42.3%38.3%47.5%54.1%49.5%-4.6%
EBITDA Margin3.5%10.4%-3.8%-16.0%5.0%21.0%
Net Income Margin3.2%11.5%-6.3%-15.6%4.0%19.5%
CAPEX, % of revenue0.6%0.5%0.7%0.4%0.1%-0.3%

Net Debt/EBITDA-9.0x-2.4x-7.7x

Peers in Electronic & Electrical Equipment

Below we provide Image Scan Hldgs benchmarking against other companies in Electronic & Electrical 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 5 FY2016 FY2017 FY2018 FY2019 FY2020
Univision Engineering ($UVEL)-24.0%16.6%154.3%-24.6%
Dewhurst ($DWHA)2.6%12.2%3.1%3.6%-
Gooch & Housego ($GHH)-30.2%11.5%3.4%-5.5%
Thorpe(F.W.) ($TFW)-18.6%4.0%0.9%2.4%
Zytronic ($ZYT)-0.8%8.6%-2.6%-9.8%-
Median (6 companies)-1.5%8.9%4.0%2.2%-5.5%
Image Scan Hldgs ($IGE)-51.9%-31.2%-31.7%47.3%

Top companies by Gross margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Thorpe(F.W.) ($TFW)43.8%44.0%46.8%45.5%44.1%
Gooch & Housego ($GHH)37.5%41.1%40.1%34.8%32.1%
Zytronic ($ZYT)42.8%41.1%37.0%33.8%-
Univision Engineering ($UVEL)32.3%34.3%32.5%22.5%19.4%
Lpa Group ($LPA)29.3%28.2%25.4%22.3%-
Median (5 companies)31.8%32.2%37.0%33.8%32.1%
Image Scan Hldgs ($IGE)42.3%38.3%47.5%54.1%49.5%

Top companies by EBITDA margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Thorpe(F.W.) ($TFW)22.5%21.3%22.0%22.2%19.1%
Zytronic ($ZYT)25.6%28.8%23.7%20.6%-
Dewhurst ($DWHA)13.4%13.6%14.2%14.6%-
Gooch & Housego ($GHH)17.3%17.3%14.1%13.4%13.8%
Univision Engineering ($UVEL)3.7%9.8%13.5%12.9%7.1%
Median (6 companies)8.9%9.8%14.2%14.0%13.8%
Image Scan Hldgs ($IGE)3.5%10.4%-3.8%-16.0%5.0%

Top companies by CAPEX/Revenue, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Dewhurst ($DWHA)1.9%1.8%2.1%9.3%-
Thorpe(F.W.) ($TFW)2.9%5.1%5.5%6.2%6.2%
Gooch & Housego ($GHH)11.3%5.2%4.7%4.5%4.5%
Zytronic ($ZYT)1.8%2.1%1.2%2.5%-
Lpa Group ($LPA)6.0%7.3%1.8%2.0%-
Median (6 companies)1.8%2.0%1.6%3.5%4.5%
Image Scan Hldgs ($IGE)0.6%0.5%0.7%0.4%0.1%

Top companies by ROIC, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Univision Engineering ($UVEL)2.1%7.8%12.0%25.7%5.9%
Thorpe(F.W.) ($TFW)18.5%19.0%18.1%16.3%12.2%
Dewhurst ($DWHA)24.6%24.1%18.9%14.1%-
Zytronic ($ZYT)18.1%20.9%15.1%11.1%-
Gooch & Housego ($GHH)10.8%12.1%8.3%5.7%4.1%
Median (6 companies)9.4%13.4%15.1%12.6%5.9%
Image Scan Hldgs ($IGE)16.4%39.8%-8.5%-27.7%7.9%

Top companies by Net Debt / EBITDA

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Lpa Group ($LPA)1.3x1.1x0.7x4.5x-
Gooch & Housego ($GHH)-0.8x-0.8x0.6x0.8x0.9x
Univision Engineering ($UVEL)-7.6x-2.5x-1.3x-1.0x-0.0x
Thorpe(F.W.) ($TFW)-0.9x-1.1x-1.2x-1.3x-2.0x
Dewhurst ($DWHA)-2.6x-2.5x-1.2x-2.1x-
Median (6 companies)0.4x-0.5x-1.1x-1.1x-0.0x