The numbers tell that Taylor Wimpey is a solid growth stock

10 Mar 2015 • About Taylor Wimpey ($TW.) • By InTwits

Have you thought about Taylor Wimpey as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story

Taylor Wimpey showed fast growth in the last financial year. Taylor Wimpey's revenue surged on 17.0% in FY2014. Together with revenue growth Taylor Wimpey also managed to keep EBITDA growth. EBITDA grew 39.5% for the same period.

In the longer period Taylor Wimpey showed fast revenue growth of 14.1% from 2011 to 2014 annually. EBITDA surged on 48.0% from 2011 to 2014 annually.

Taylor Wimpey ($TW.) financials for the last 5 years

mln. £	2010	2011	2012	2013	2014
Revenue	1,768	1,808	2,019	2,296	2,686
Revenue growth, %		2.3%	11.7%	13.7%	17.0%
Gross margin, %	12.0%	15.9%	17.6%	21.6%	23.8%
SG&A, %	7.18%	7.54%	7.04%	6.61%	5.90%
EBITDA	49	154	226	358	500
EBITDA growth, %		212.1%	46.4%	58.7%	39.5%
EBITDA margin, %	2.79%	8.53%	11.2%	15.6%	18.6%
Net Income	259	99	229	271	374
Net Income margin, %	14.7%	5.48%	11.3%	11.8%	13.9%

CAPEX	4	2	4	3	10
CAPEX/Revenue, %	0.209%	0.0940%	0.173%	0.109%	0.361%
Debt	838	265	249	100	100
Cash	184	148	190	105	213
Net Debt/EBITDA	13.2x	0.8x	0.3x	-0.0x	-0.2x

ROIC, %	2.0%	7.5%	12.2%	17.7%	21.7%
ROE, %	15.6%	5.4%	12.0%	12.8%	15.6%

Profitability and return on investment

EBITDA growth was supported by margin expansion. The company's EBITDA margin surged on 3 pp from 15.6% to 18.6% in 2014. If we look for the longer period the company showed fast EBITDA margin growth of 10.1 pp from 8.50% in 2011 to 18.6% in 2014.

Taylor Wimpey shows attractive ROIC at 21.7% for the last 12 months which assumes stable development model. During the last three years it surged - it was 7.54% in FY2011. Average ROIC for the last three years was 17.2%.

The company's Net Income margin surged on 2.10 pp from 11.8% to 13.9% in 2014. If we look for the longer period Taylor Wimpey's Net Income margin surged on 8.40 pp from 5.50% in 2011 to 13.9% in 2014.

Taylor Wimpey operates at ROE of 15.6%. For the last three years the average ROE was 13.5%.

Capital expenditures (CAPEX)

In FY2014 the company had CAPEX/Revenue of 0.361%. Taylor Wimpey showed fast CAPEX/Revenue growth of 0.267 pp from 0.0940% in 2011 to 0.361% in 2014. Average CAPEX/Revenue for the last three years was 0.214%.

Leverage (Debt)

Having such a fast growth profile the company keeps negative net debt at -0.2x Net Debt/EBITDA. If we look for the longer period leverage dropped on 0.98x from 0.76x in 2011 to -0.23x in 2014.

Valuation vs. comparable companies

The market closed today at 0.2x P/E for Taylor Wimpey which is 92% lower than 2.4x Household Goods & Home Construction peer group avearge calculated on the basis of 5 companies.

Peers in Household Goods & Home Construction

Below you can find Taylor Wimpey benchmarking vs. other companies in Household Goods & Home Construction 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
	FY2010	FY2011	FY2012	FY2013	FY2014
Abbey ($ABBY)		-31.4%	5.6%	40.0%	15.9%
Colefax Group ($CFX)		12.3%	-9.4%	0.3%	10.5%
Reckitt Benckiser Group ($RB.)		12.2%	0.9%	-3.1%	-4.6%
Airea ($AIEA)		-6.5%	-9.1%	-4.7%	-8.4%

Median (4 companies)		2.9%	-4.1%	-1.4%	2.9%
Taylor Wimpey ($TW.)		2.3%	11.7%	13.7%	17.0%

Top companies by Gross margin, %

Top
	FY2010	FY2011	FY2012	FY2013	FY2014
Reckitt Benckiser Group ($RB.)	60.6%	57.4%	57.9%	56.7%	57.7%
Colefax Group ($CFX)	54.8%	55.1%	55.1%	55.4%	53.3%
Abbey ($ABBY)	18.6%	24.5%	23.6%	17.3%	25.8%

Median (3 companies)	54.8%	55.1%	55.1%	55.4%	53.3%
Taylor Wimpey ($TW.)	12.0%	15.9%	17.6%	21.6%	23.8%

Top companies by EBITDA margin, %

Top
	FY2010	FY2011	FY2012	FY2013	FY2014
Reckitt Benckiser Group ($RB.)	26.9%	26.9%	27.1%	22.0%	26.3%
Abbey ($ABBY)	17.7%	20.7%	19.4%	13.3%	22.6%
Colefax Group ($CFX)	9.3%	10.9%	6.6%	7.6%	9.1%
Airea ($AIEA)	6.4%	6.9%	5.9%	7.4%	7.0%

Median (4 companies)	13.5%	15.8%	13.0%	10.4%	15.8%
Taylor Wimpey ($TW.)	2.8%	8.5%	11.2%	15.6%	18.6%

Top companies by CAPEX/Revenue, %

Top
	FY2010	FY2011	FY2012	FY2013	FY2014
Abbey ($ABBY)	1.8%	9.4%	12.2%	6.5%	8.0%
Colefax Group ($CFX)	2.5%	3.7%	4.9%	3.1%	2.0%
Reckitt Benckiser Group ($RB.)	2.0%	1.7%	1.7%	2.1%	1.8%
Airea ($AIEA)	3.9%	2.1%	2.7%	1.0%	0.7%

Median (4 companies)	2.2%	2.9%	3.8%	2.6%	1.9%
Taylor Wimpey ($TW.)	0.2%	0.1%	0.2%	0.1%	0.4%

Top companies by ROIC, %

Top
	FY2010	FY2011	FY2012	FY2013	FY2014
Colefax Group ($CFX)	22.0%	27.6%	10.7%	13.5%	22.0%
Reckitt Benckiser Group ($RB.)	29.2%	24.8%	23.3%	17.3%	19.7%
Abbey ($ABBY)	8.2%	5.8%	5.4%	4.7%	11.2%
Airea ($AIEA)	7.8%	6.0%	3.3%	7.2%	6.4%

Median (4 companies)	15.1%	15.4%	8.1%	10.4%	15.5%
Taylor Wimpey ($TW.)	2.0%	7.5%	12.2%	17.7%	21.7%

Top companies by Net Debt / EBITDA

Top
	FY2010	FY2011	FY2012	FY2013	FY2014
Reckitt Benckiser Group ($RB.)	0.9x	0.7x	0.9x	1.0x	0.7x
Colefax Group ($CFX)	-0.8x	-0.7x	-1.8x	-1.4x	-0.6x
Abbey ($ABBY)	-3.0x	-1.8x	-1.5x	-2.6x	-1.2x
Airea ($AIEA)	-1.9x	-1.5x	-0.9x	-1.5x	-1.2x

Median (4 companies)	-1.4x	-1.1x	-1.2x	-1.5x	-0.9x
Taylor Wimpey ($TW.)	13.2x	0.8x	0.3x	-0.0x	-0.2x

Taylor Wimpey stock price chart

Taylor Wimpey financials

mln.	FY2010	FY2011	FY2012

Revenue	1,768	1,808	2,019
EBITDA	49.400	154.2	225.7
Net income	259.3	99.000	228.6
CAPEX	3.700	1.700	3.500
Debt	838.4	264.6	249.4
Cash	183.9	147.7	190.4

About Taylor Wimpey

Taylor Wimpey plc operates as a homebuilding company primarily in the United Kingdom and Spain. It builds a range of properties from one- and two-bedroom apartments to five bedroom detached houses with a price range, including private and affordable homes. The company was founded in 1880 and is headquartered in High Wycombe, the United Kingdom.