Prudential revenue jumped on 73.9% in 2016
14/03/2017 • About Prudential (
$2378) • By InTwits
Prudential reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Prudential doesn't have a profitable business model yet: FY2016 ROIC is 0.6%
- Prudential has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has potentially unprofitable business model: ROIC is at 0.6%
- It operates with high leverage: Net Debt/EBITDA is 1.9x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Prudential ($2378) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 54,438 | 52,375 | 60,126 | 41,305 | 71,842 | 73.9% |
| Net Income | 2,163 | 1,346 | 2,216 | 2,579 | 1,921 | -25.5% |
Balance Sheet
|
|---|
| Cash | 6,126 | 6,785 | 6,409 | 7,782 | 10,065 | 29.3% |
| Short Term Debt | 3,213 | 3,047 | 3,356 | 3,292 | 3,666 | 11.4% |
| Long Term Debt | 3,554 | 4,636 | 4,304 | 5,011 | 6,798 | 35.7% |
Cash flow
|
|---|
| Capex | 139 | 221 | 172 | 256 | 348 | 35.9% |
Ratios
|
|---|
| Revenue growth | 49.1% | -3.8% | 14.8% | -31.3% | 73.9% | |
| Net Income Margin | 4.0% | 2.6% | 3.7% | 6.2% | 2.7% | -3.6% |
| CAPEX, % of revenue | 0.3% | 0.4% | 0.3% | 0.6% | 0.5% | -0.1% |
| ROIC | 1.1% | 0.6% | 0.8% | 0.9% | 0.6% | -0.3% |
| ROE | 22.9% | 13.5% | 20.7% | 20.8% | 13.9% | -6.9% |
Revenue and profitability
The company's Revenue surged on 73.9%.
Net Income marign decreased on 3.6 pp from 6.2% to 2.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Prudential had CAPEX/Revenue of 0.48%. The company's CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 0.46%.
Return on investment
The company operates at good ROE (13.91%) while ROIC is low (0.62%). ROIC showed almost no change in FY2016. ROE decreased on 6.9 pp from 20.8% to 13.9% in FY2016.
Leverage (Debt)
Debt surged on 26.0% while cash jumped on 29.3%.
Management team
Prudential's CEO is Michael A Wells "Mike". Michael A Wells "Mike" has 3 years tenure at the company. Prudential's CFO Nicolaos Andreas Nicandrou has spent 9 years at the company.
Appendix 1: Peers in Life Insurance
Below you can find Prudential benchmarking vs. other companies in Life Insurance 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.
