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Looking for growth stocks? Pay attention to Abbey

19 Jul 2016 • About Abbey ($ABBY) • By InTwits

Pay attention to Abbey as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


Abbey showed fast growth in the last financial year. Abbey's revenue surged on 27.9% in FY2016. In addition to revenue Abbey also keeps delivering EBITDA growth. It was 29.8% in FY2016

In the longer period Abbey showed fast revenue growth of 30.8% from FY2013 to FY2016 annually. EBITDA surged on 74.9% from FY2013 to FY2016 annually.

Abbey ($ABBY) financials for the last 5 years

mln. € FY2012 FY2013 FY2014 FY2015 FY2016
Revenue7099114172221
Revenue growth, %40.0%15.9%51.0%27.9%
Gross margin, %23.6%17.3%25.8%30.6%33.1%
SG&A, %10.8%8.95%7.93%3.76%5.68%
EBITDA1413265470
EBITDA growth, %-4.4%97.3%108.7%29.8%
EBITDA margin, %19.4%13.3%22.6%31.2%31.7%
Net Income98194049
Net Income margin, % 12.6%7.82%16.4%23.0%22.4%
 
CAPEX9691412
CAPEX/Revenue, %12.2%6.52%8.04%8.05%5.34%
Debt00000
Cash2033306790
Net Debt/EBITDA-1.5x-2.6x-1.2x-1.3x-1.3x
 
ROIC, %5.4%4.7%11.2%21.1%22.9%
ROE, %5.3%4.4%10.3%18.1%18.7%

Profitability and return on investment


EBITDA growth was partly attributed to margin expansion. Abbey showed small growth in EBITDA margin of 0.500 pp from 31.2% to 31.7% in FY2016. In the longer period the company's EBITDA margin surged on 18.4 pp from 13.3% in FY2013 to 31.7% in FY2016.

Abbey shows attractive ROIC at 22.9% for the last 12 months which assumes stable development model. During the last three years it surged - it was 4.72% in FY2013. Average ROIC for the last three years was 18.4%.

Abbey showed small Net Income margin decline of 0.600 pp from 23% to 22.4% in FY2016. If we look for the longer period Net Income margin surged on 14.6 pp from 7.80% in FY2013 to 22.4% in FY2016.

Abbey operates at ROE of 18.7%. It's average level of ROE for the last three years was 15.7%.

Capital expenditures (CAPEX)


To fuel this fast growth the company had to invest in CAPEX.Abbey's CAPEX/Revenue was 5.34% in FY2016. The company's CAPEX/Revenue dropped on 1.19 pp from 6.52% in FY2013 to 5.34% in FY2016. For the last three years the average CAPEX/Revenue was 7.14%.

Leverage (Debt)


The company has negative net debt at -1.3x Net Debt/EBITDA - at the same time with high growth. In the longer period leverage surged on 1.27x from -2.56x in FY2013 to -1.30x in FY2016.

Peers in Household Goods & Home Construction


Below we provide Abbey benchmarking against other companies in Household Goods & Home Construction 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, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Taylor Wimpey ($TW.)11.7%13.7%17.0%16.9%
Airea ($AIEA)-9.1%-4.7%-8.4%11.3%
Reckitt Benckiser Group ($RB.)0.9%-3.1%-4.6%0.4%
Colefax Group ($CFX)-9.4%0.3%10.5%-1.6%
Teco Electric & Machinery Co Ltd ($TECD)4.1%16.2%-5.1%-9.6%
 
Median (7 companies)1.3%0.3%-5.1%-1.6%
Abbey ($ABBY)40.0%15.9%51.0%27.9%


Top companies by Gross margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Reckitt Benckiser Group ($RB.)57.9%56.7%57.7%59.1%
Colefax Group ($CFX)55.1%55.4%53.3%54.7%
Teco Electric & Machinery Co Ltd ($TECD)23.5%23.8%24.9%25.5%
Taylor Wimpey ($TW.)17.6%21.6%23.8%25.1%
Havelock Europa ($HVE)13.2%12.5%13.3%11.0%
 
Median (6 companies)20.6%22.7%24.4%25.3%
Abbey ($ABBY)23.6%17.3%25.8%30.6%33.1%


Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Reckitt Benckiser Group ($RB.)27.1%22.0%26.3%27.2%
Taylor Wimpey ($TW.)11.2%15.6%18.6%20.2%
Teco Electric & Machinery Co Ltd ($TECD)10.8%10.7%10.7%10.5%
Colefax Group ($CFX)6.6%7.6%9.1%8.7%
Airea ($AIEA)5.9%7.4%7.0%8.0%
 
Median (7 companies)6.6%7.6%9.1%8.7%
Abbey ($ABBY)19.4%13.3%22.6%31.2%31.7%


Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Teco Electric & Machinery Co Ltd ($TECD)1.4%1.4%3.6%3.5%
Colefax Group ($CFX)4.9%3.1%2.0%2.9%
Airea ($AIEA)2.7%1.0%0.7%1.8%
Reckitt Benckiser Group ($RB.)1.7%2.1%1.8%1.7%
Havelock Europa ($HVE)0.1%1.3%0.2%1.0%
 
Median (7 companies)1.7%1.3%1.1%1.7%
Abbey ($ABBY)12.2%6.5%8.0%8.0%5.3%


Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Taylor Wimpey ($TW.)12.2%17.7%21.7%24.1%
Colefax Group ($CFX)10.7%13.5%22.0%20.6%
Reckitt Benckiser Group ($RB.)23.3%17.3%19.7%20.3%
Airea ($AIEA)3.3%7.2%6.4%11.7%
Teco Electric & Machinery Co Ltd ($TECD)7.1%8.3%7.3%5.8%
 
Median (7 companies)7.1%8.3%7.3%11.7%
Abbey ($ABBY)5.4%4.7%11.2%21.1%22.9%


Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Reckitt Benckiser Group ($RB.)0.9x1.0x0.7x0.7x
Teco Electric & Machinery Co Ltd ($TECD)0.1x-0.9x-1.3x-0.3x
Taylor Wimpey ($TW.)0.3x-0.0x-0.2x-0.4x
Airea ($AIEA)-0.9x-1.5x-1.2x-0.9x
Colefax Group ($CFX)-1.8x-1.4x-0.6x-1.0x
 
Median (6 companies)0.2x-0.5x-0.6x-0.6x
Abbey ($ABBY)-1.5x-2.6x-1.2x-1.3x-1.3x