Mortice Ltd demonstrates fast growth
04 Sep 2015 • About Mortice Ltd (
$MORT) • By InTwits
Have you thought about Mortice Ltd as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Mortice Ltd showed fast growth in the last financial year. The company's revenue surged on 18.9% in FY2015. The growth also happened in EBITDA of 19.9% for the same period.
In the last 3 years Mortice Ltd showed fast revenue growth of 13.0% from FY2012 to FY2015 annually. EBITDA increased slightly on 0.375% from FY2012 to FY2015 annually.
Mortice Ltd ($MORT) financials for the last 5 years
| mln. $ | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 48 | 61 | 67 | 74 | 88 |
|---|
| Revenue growth, % | | 27.2% | 9.2% | 11.0% | 18.9% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 2 | 4 | 4 | 3 | 4 |
|---|
| EBITDA growth, % | | 66.9% | 4.3% | -19.1% | 19.9% |
|---|
| EBITDA margin, % | 5.10% | 6.69% | 6.39% | 4.66% | 4.70% |
|---|
| Net Income | 1 | 2 | 2 | 1 | 1 |
|---|
| Net Income margin, % | 1.73% | 2.72% | 2.84% | 1.50% | 1.54% |
|---|
| |
| CAPEX | 0 | 0 | 0 | 1 | 1 |
|---|
| CAPEX/Revenue, % | 0.891% | 0.592% | 0.567% | 0.914% | 1.02% |
|---|
| Debt | 5 | 5 | 6 | 9 | 7 |
|---|
| Cash | 3 | 2 | 1 | 1 | 1 |
|---|
| Net Debt/EBITDA | 0.8x | 0.9x | 1.1x | 2.2x | 1.7x |
|---|
| |
| ROIC, % | 24.0% | 32.2% | 29.2% | 19.6% | 21.9% |
|---|
| ROE, % | 12.3% | 22.1% | 22.1% | 11.8% | 13.5% |
|---|
Profitability and return on investment
There was no change in EBITDA margin in FY2015, it stayed constant at 4.70%. If we look for the longer period EBITDA margin dropped on 2 pp from 6.70% in FY2012 to 4.70% in FY2015.
We call Mortice Ltd an attractive growth stock as together with the growth it delivers high ROIC at 21.9%. Three years ago it was considerably higher at 32.2%. Average ROIC for the last three years was 23.6%.
Mortice Ltd showed no change in Net Income margin of 0 pp from 1.50% to 1.50% in FY2015. In the longer period Net Income margin dropped on 1.20 pp from 2.70% in FY2012 to 1.50% in FY2015.
Mortice Ltd operates at ROE of 13.5%. Average ROE for the last three years was 15.8%.
Capital expenditures (CAPEX)
In FY2015 Mortice Ltd had CAPEX/Revenue of 1.02%. CAPEX/Revenue surged on 0.427 pp from 0.592% in FY2012 to 1.02% in FY2015. It's average level of CAPEX/Revenue for the last three years was 0.834%.
Leverage (Debt)
Mortice Ltd has medium debt level at 1.7x Net Debt/EBITDA to maintain high growth. If we look for the longer period leverage surged on 0.75x from 0.93x in FY2012 to 1.67x in FY2015.
Valuation vs. comparable companies
The company trades at 10.1x EV/EBITDA which is 27.1% lower than 13.9x Support Services industry avearge calculated based on 158 companies. At the end of trading day today Mortice Ltd traded at 25.8x P/E which is 62.4% higher than 15.9x Support Services peer group avearge calculated on the basis of 21 companies.
Peers in Support Services
Below we provide Mortice Ltd 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Petards Group ($PEG) | 6.5% | -25.7% | -30.6% | 115.1% | |
| Optimal Payments ($OPAY) | 107.9% | 39.9% | 41.5% | 44.0% | |
| 1Spatial ($SPA) | | 98.7% | 131.4% | 42.7% | 13.5% |
| Inspired Energy ($INSE) | 32.9% | 83.8% | 44.8% | 42.2% | |
| Interquest Group ($ITQ) | 7.8% | -6.8% | 2.0% | 31.2% | |
| |
|---|
| Median (54 companies) | 9.4% | 6.6% | 5.6% | 4.7% | 0.8% |
|---|
| Mortice Ltd ($MORT) | | 27.2% | 9.2% | 11.0% | 18.9% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Inspired Energy ($INSE) | | 94.6% | 86.8% | 78.7% | |
| Ienergizer Ltd ($IBPO) | 48.1% | 56.2% | 78.4% | 76.8% | 72.7% |
| Vianet Group ($VNET) | 53.1% | 53.3% | 51.3% | 58.8% | 69.2% |
| Prime People ($PRP) | 57.6% | 63.4% | 58.3% | 57.7% | 61.4% |
| Murgitroyd Group ($MUR) | 59.9% | 58.4% | 61.4% | 57.6% | |
| |
|---|
| Median (49 companies) | 28.5% | 28.2% | 28.5% | 29.2% | 37.0% |
|---|
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Northgate ($67GX) | | 41.2% | 40.4% | 40.6% | 39.4% |
| 21St Century Technology ($C21) | 11.4% | 13.4% | -0.2% | 36.0% | |
| Vp ($VP.) | 24.4% | 23.9% | 24.5% | 24.2% | 26.2% |
| Ienergizer Ltd ($IBPO) | 34.5% | 27.6% | 27.8% | 23.6% | 17.1% |
| Capital Drilling Ltd ($CAPD) | 26.3% | 24.1% | 15.7% | 21.7% | |
| |
|---|
| Median (54 companies) | 7.6% | 6.8% | 6.4% | 6.9% | 11.6% |
|---|
| Mortice Ltd ($MORT) | 5.1% | 6.7% | 6.4% | 4.7% | 4.7% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Vp ($VP.) | 15.5% | 21.4% | 17.7% | 21.6% | 25.7% |
| Norish ($NSH) | 5.0% | 10.2% | 1.4% | 15.4% | |
| Capital Drilling Ltd ($CAPD) | 20.5% | 18.9% | 4.9% | 13.9% | |
| Falkland Islands Hldgs ($FKL) | 2.6% | 3.7% | 6.8% | 12.9% | 11.9% |
| Augean ($AUG) | 11.2% | 9.8% | 15.9% | 12.3% | |
| |
|---|
| Median (54 companies) | 0.9% | 1.1% | 1.1% | 1.1% | 1.4% |
|---|
| Mortice Ltd ($MORT) | 0.9% | 0.6% | 0.6% | 0.9% | 1.0% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 21St Century Technology ($C21) | 16.2% | 20.3% | -2.9% | 45.6% | |
| Petards Group ($PEG) | 25.6% | 35.5% | -78.0% | 24.7% | |
| Driver Group ($DRV) | 6.5% | 18.7% | 27.9% | 24.0% | |
| Optimal Payments ($OPAY) | -2.9% | 7.1% | 27.7% | 23.8% | |
| Premier Farnell ($PFLA) | | 33.2% | 21.0% | 23.2% | 18.5% |
| |
|---|
| Median (54 companies) | 8.9% | 9.7% | 7.9% | 9.3% | 10.4% |
|---|
| Mortice Ltd ($MORT) | 24.0% | 32.2% | 29.2% | 19.6% | 21.9% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Inspired Energy ($INSE) | -0.8x | 0.8x | 0.6x | 19.4x | |
| Mitsubishi Corp ($MBC) | 7.2x | 9.9x | 15.9x | 14.3x | 12.5x |
| Nature Group ($NGR) | -0.6x | -0.5x | -0.4x | 6.6x | |
| Ceps ($CEPS) | 4.1x | | 3.0x | 6.6x | |
| Redhall Group ($RHL) | | 22.8x | 5.8x | 6.6x | |
| |
|---|
| Median (52 companies) | 0.6x | 0.8x | 0.5x | 0.6x | 1.0x |
|---|
| Mortice Ltd ($MORT) | 0.8x | 0.9x | 1.1x | 2.2x | 1.7x |
