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Is Empresaria Group a solid growth stock? - The numbers tells it is

08 Mar 2017 • About Empresaria Group ($EMR) • By InTwits

Empresaria Group is a growth stock in Support Services industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story


Empresaria Group showed growth in the last financial year. The company's revenue surged on 44.4% in FY2016. Together with revenue growth Empresaria Group also managed to keep EBITDA growth. EBITDA grew 20.7% for the same period.

If we look for the longer period Empresaria Group showed fast revenue growth of 11.6% from FY2013 to FY2016 annually. EBITDA surged on 16.7% from FY2013 to FY2016 annually.

Empresaria Group ($EMR) financials for the last 5 years

mln. £ FY2012 FY2013 FY2014 FY2015 FY2016
Revenue194194188187270
Revenue growth, %0.1%-3.3%-0.3%44.4%
Gross margin, %22.6%21.9%23.7%26.3%21.8%
SG&A, %18.8%20.2%22.0%18.2%
EBITDA678911
EBITDA growth, %4.8%13.6%16.0%20.7%
EBITDA margin, %3.24%3.40%3.99%4.64%3.88%
Net Income12445
Net Income margin, % 0.721%1.23%1.86%2.35%1.78%
 
CAPEX11111
CAPEX/Revenue, %0.257%0.412%0.532%0.481%0.296%
Debt1421181529
Cash668818
Net Debt/EBITDA1.3x2.3x1.3x0.8x1.0x
 
ROIC, %12.4%12.6%14.4%16.1%13.2%
ROE, %6.3%11.4%15.4%16.1%13.5%

Profitability and return on investment


EBITDA margin declined slightly from 4.60% in FY2015 to 3.90% in FY2016. If we look for the longer period the company showed fast EBITDA margin growth of 0.500 pp from 3.40% in FY2013 to 3.90% in FY2016.

Empresaria Group shows attractive ROIC at 13.2% for the last 12 months which assumes stable development model. Three years ago it was a bit lower at 12.6%. It's average level of ROIC for the last three years was 14.6%.

Empresaria Group's Net Income margin dropped on 0.500 pp from 2.30% to 1.80% in FY2016. If we look for the longer period the company's Net Income margin surged on 0.600 pp from 1.20% in FY2013 to 1.80% in FY2016.

Empresaria Group operates at ROE of 13.5%. It's average ROE for the last three years was 15.0%.

Capital expenditures (CAPEX)


Empresaria Group's CAPEX/Revenue was 0.296% in FY2016. CAPEX/Revenue dropped on 0.116 pp from 0.412% in FY2013 to 0.296% in FY2016. It's average level of CAPEX/Revenue for the last three years was 0.436%.

Leverage (Debt)


Having such a fast growth profile the company keeps medium debt level at 1.0x Net Debt/EBITDA. In the last 3 years leverage dropped on 1.30x from 2.30x in FY2013 to 1.00x in FY2016.

Peers in Support Services


Below we provide Empresaria Group benchmarking against other companies in Support 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, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Camco Clean Energy ($CCE)88.0%-54.7%99.4%
Optimal Payments ($OPAY)39.9%41.5%44.0%68.1%
Inspired Energy ($INSE)83.8%44.8%42.2%40.2%
21St Century Technology ($C21)0.1%-22.8%-16.6%35.5%
Ibex Global Solutions ($IBEX)35.7%30.0%29.8%7.0%
 
Median (55 companies)-0.9%8.0%5.0%6.9%2.9%
Empresaria Group ($EMR)0.1%-3.3%-0.3%44.4%


Top companies by Gross margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Inspired Energy ($INSE)94.6%86.8%78.7%76.2%
Ienergizer Ltd ($IBPO)56.2%78.4%76.8%72.7%71.3%
Grafenia ($GRA)53.4%54.3%56.1%70.8%66.3%
Vianet Group ($VNET)53.3%51.3%58.8%69.2%70.1%
Prime People ($PRP)63.4%58.3%57.7%61.4%59.2%
 
Median (49 companies)29.5%28.8%30.4%28.7%27.0%
Empresaria Group ($EMR)22.6%21.9%23.7%26.3%21.8%


Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
21St Century Technology ($C21)13.4%-0.2%36.0%44.8%
Northgate ($67GX)41.2%40.4%40.6%39.4%38.3%
Inspired Energy ($INSE)46.2%48.5%1.5%35.4%
Vianet Group ($VNET)18.6%17.3%19.7%27.1%22.1%
Vp ($VP.)23.9%24.5%24.2%26.2%28.4%
 
Median (55 companies)6.8%6.4%6.9%7.6%7.1%
Empresaria Group ($EMR)3.2%3.4%4.0%4.6%3.9%


Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Vp ($VP.)21.4%17.7%21.6%25.7%24.1%
Sagentia Group ($SAG)1.9%1.4%1.5%25.2%
Nature Group ($NGR)14.3%7.2%5.6%22.9%
Augean ($AUG)9.8%15.9%12.3%12.3%
Falkland Islands Hldgs ($FKL)3.7%6.8%12.9%11.9%4.8%
 
Median (55 companies)1.1%1.1%1.1%1.1%1.0%
Empresaria Group ($EMR)0.3%0.4%0.5%0.5%0.3%


Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
21St Century Technology ($C21)20.3%-2.9%45.6%111.0%
Inspired Energy ($INSE)63.9%65.5%-7.5%28.0%
Petards Group ($PEG)35.5%-78.0%24.7%23.9%
Servoca ($SVCA)1.0%7.8%14.9%22.3%22.8%
Rtc Group ($RTC)14.6%17.6%19.9%22.2%15.4%
 
Median (55 companies)9.5%7.8%9.3%10.2%10.3%
Empresaria Group ($EMR)12.4%12.6%14.4%16.1%13.2%


Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Redhall Group ($RHL)22.8x5.8x6.6x16.8x16.2x
Mitsubishi Corp ($MBC)9.9x15.9x14.3x12.5x25.0x
Ienergizer Ltd ($IBPO)6.3x2.8x3.0x4.0x2.4x
Ceps ($CEPS)3.0x6.6x3.8x
Kellan Group(The ($KLN)6.5x3.6x
 
Median (51 companies)0.8x0.5x0.6x0.4x0.5x
Empresaria Group ($EMR)1.3x2.3x1.3x0.8x1.0x